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Changing face of UK landlords

Tuesday, November 22nd, 2011

The current propensity for properties going to buyers with an interest in landlord insurance seems set to continue as lenders continue to recognise buy-to-let investors as the safest bet in terms of mortgage risk.

New breed enters the market

As young couples continue to struggle to raise a deposit that will enable them to purchase a property, residential landlords are finding more and better deals available to them all the time, including property insurance. The current financial flux of low interest rates, lack of lending from the banks and a seemingly insatiable demand for tenanted accommodation is attracting a new kind of landlord.

Buy-to-let is an interesting option

The luckier members of society who find themselves in jobs that are not threatened by the current austerity measures imposed by the Government find themselves in a position where they are accruing money but have few options to invest the cash in a market that will give them a good return on their investment. Twelve months ago investing in the property market would have been almost impossible, the financial situation and lack of buy-to-let mortgages would have seen to that, but now, all of a sudden the property market is awash with buy-to-let deals that get better day by day. Twelve months ago investors would have been facing a 50% deposit; today 25% deposits with the right financial background are becoming common place.

Education fees replacing pension plans

The identity of the modern landlord is changing quickly too. Today the landlord with just 1 or 2 properties in his/her portfolio is likely to be a middle aged professional couple confident of their own future but not that of their children. The tenants paying rent into the bank accounts of this type of landlord will not be building up a retirement pension for their landlords but more likely contributing to school and university fees for the landlord’s offspring.

Sector changing quickly

The dynamics of the housing sector in the UK are changing faster than ever before. Those with a finger on the pulse of the market and the wherewithal to back their judgement could find the fragility of the present financial situation gives them a rock solid investment for the future of their own family.

Tags: Buy-to-Let Insurance, Landlord Insurance, UK Landlords
Posted in Advice, Insurance Guides, Landlord Insurance, Property Insurance | 2 Comments »

Course fees may have negative impact on landlords in University Cities

Thursday, April 14th, 2011

As landlords across the UK with student property insurance, prepare to make necessary repairs to their properties as the students go back to their family homes, many will be wondering what impact the hike in student fees will have on their business.

High levels of students, high profits for landlords

The soaring student population over the last few years has been of great benefit to private landlords in many university cities. Most universities now have many more students than their own accommodation can cope with, opening up opportunities for private landlords prepared to offer quality accommodation and sign up to university accreditation schemes. Many have found their businesses overwhelmed with demand from student tenants looking for a home in new surroundings. Landlords have gone out and purchased landlord insurance on several other properties as they have expanded their portfolios to cope with the lucrative business coming their way.

Higher course fees creating uncertainty

Now, however, the massive rise in student’s fees may well have a negative effect on business for residential landlords. For example students who now will be asked to pay £9,000 in course fees may well decide to look for a University near their home, and in a bid to avoid further financial burdens stop at home with their parents while they complete their studies. For many others the fees may persuade them not to go to university at all. Others may still go to the university of their choice but decide to cut back on the amount of cash they are prepared to pay in rent. This in turn could cause competition at the cheaper end of the market but leave landlords with better quality property having to cut their rents to attract tenants.

Wide repercussions

Of course if the higher course fees result in a large drop in the student population then whole towns will feel the consequences. As well as landlords possibly experiencing void periods, shopkeepers, pubs and restaurants will all suffer. There is little landlords in university towns and cities can do about the risk and they will have little idea if the course fees will impact on their business until the late days of August when A level results come in. Only then will they know if their investments will continue to prosper or if they will have to cut their rental demands in order to avoid void periods.

Tags: Landlord Insurance, University fees
Posted in Insurance Guides, Landlord Insurance, Landlords Insurance | No Comments »

Live in landlords experiencing boom

Thursday, March 24th, 2011

It appears that 2011 may well be the year of the “live-in landlord”. Figures supplied by a leading online letting agent suggest that the current austerity measures and the effect of them on job cuts is leading more and more people to look for a room rather than a house.

2010 a vintage year

Spareroom.co.uk a website designed for those looking for flats or house shares say that 2010 proved to be a bumper year for live-in landlords with over 200,000 putting a room up for rent. They say that advertisements for the letting of rooms went up by 44% on the previous year and the amount of people renting out a room increased by over 150%. They expect this to be surpassed in 2011.

Several factors combining

Not surprisingly perhaps the South East and London saw the biggest growth in people willing to rent out a room. The influx of people looking for cheap accommodation as they start out a career in the Capital, as always, fuelled the lower end of the letting sector and many experts believe the London Olympics in 2012 is already adding to the promised boom of 2011. Of course the present situation with the housing market not moving at all is forcing many to look for cheap renting solutions as they wait for their home to sell.

Look before you leap

A Director at Spareroom.co.uk said that over the last year and half the number of cash strapped homeowners looking for a way to pay their household bills by renting out a room had soared. He went on to say that homeowners thinking of this option should make sure they have completely researched what they are undertaking before they actually take in a lodger.

Informing ones Mortgage Company is absolutely essential, as is getting the correct insurance. A live–in landlord is not looking for a conventional landlord insurance policy, he needs to talk to his property insurance company to ensure he is buying a policy that gives him the cover he requires.

He should also take stock of the practicalities of having a stranger in his own home. Does the home need restructuring to accommodate himself and his lodger, does it comply with the legislation surrounding the taking in of paying guests. Last but certainly not least he must have a legal tenancy agreement drawn up and signed before he undertakes his new role.

Tags: homeowners, Landlord Insurance, live-in landlord
Posted in Insurance Guides | No Comments »

Part time landlords offered advice on how to pay their taxes!

Tuesday, March 8th, 2011

Although there may still be 508 days to the start of the London Olympics, there are many people already looking on the Games as a potential money earner.

The tickets for the London games actually go on sale at the end of this week and there is a massive difference in the price of seeing different events. The opening ceremony and blue riband track and field events final days come in at hundreds of pounds while other tickets are as cheap as £20. All the more reason then, for some part time landlords, to look for a good deal on landlord insurance when they put their residences up for rent during the period of the Games.

Inland Revenue keen to hit the ground running

There are many families in areas around the stadium already planning to make money out of the Games by becoming landlords for just a few weeks. In fact Her Majesty’s Revenue and Customs (HMRC) office is setting up a special workshop to educate these part time landlords on just how to plan their nice little earner.

The workshop is entitled “Income from property” and is aimed at homeowners looking to turn their home into a let for the duration of the London Olympics, and the letting agents the homeowners may turn to for advice. Of course any home let out to tenants has to comply with certain health and safety laws plus other legal requirements. On top of that the prospective landlord will need to get insurance protection for his home and the tenants. He must determine for instance if he needs holiday home insurance or some other form of property home insurance.

Admission to church free, not the same for the Games

It goes without saying that the HMRC are going out of their way to remind homeowners of their legal rights and tax obligations when earning money from a new source. Those wishing to find out exactly what cut of the extra income should be handed over to HMRC can find out on Friday March 11th at 13.30 at St John’s Church at Broadway, Stratford, London and there will be no charge. You never know, by the time the HMRC have taken their cut you may well be able to afford a ticket for the Games.

Tags: Part time landlords, taxes
Posted in Best Practice Guides for Landlords, Insurance Guides | No Comments »

Growth figures cause clash of opinion in the city

Thursday, January 27th, 2011

“Should I stay or should I go” say the famous lyrics of a song by punk rockers; The Clash. It is a choice very rarely offered up to politicians or football managers, but is currently very much a question both landlords and tenants are asking themselves each day.

Many tenants are wondering whether to leave their tenancy now before their housing allowance is cut or whether to wait and see if their landlord offers them a cut in rent. Landlords are asking the same question about their portfolios, should they go out and buy landlord insurance on even more properties as rental yields still grow, or should they stay put and see what happens to the interest rates over the next few months. It is for sure the growth figures for the last quarter of 2010 announced yesterday will not have helped much in their calculations.

Will it affect Government policy?

The surprise return to minus growth figures has rocked the Government and shocked many financial experts. Although it is only -0.5% the figures have come as a great disappointment to Chancellor George Osborne. His assertion that the appalling weather in December definitely contributed to the bad result was somewhat belittled by financial commentators. The general feeling in the city was that in all probability even without the bad weather, economic growth would still have been at a standstill. The Government policy of cutting public spending quickly, suddenly looks more dangerous than ever.

The figures certainly threw a spanner in the works of those forecasting an early rise in interest rates. With the revelation that two members of the Bank of England Finance Committee had voted to raise interest rates this month the probability of a rate hike suddenly appeared on the horizon, the UK Pound gained ground against the Euro and the Dollar. That disappeared very quickly yesterday!

So what should a landlord do?

For those landlords looking to increase their portfolios then the likelihood of interest rates staying put, could convince them that now is indeed the time to expand their business. Cheap property insurance is still available for those who look round and nothing in the growth figures suggests there will suddenly be a dearth of tenants, indeed the opposite may well be the case.

In the end perhaps they should take heed of another song title from The Clash and maximise their “Career Opportunities”.

Tags: Advice for Landlords, Growth figures, Landlord Insurance
Posted in Insurance Guides, Interest rates | No Comments »

Sun continues to shine for landlords in the South West

Tuesday, January 25th, 2011

As property owners in the South West prepare to sort out their landlord insurance for the coming year, they will take great heart from the latest surveys by both letting and estate agents.

Although online letting agents LSL Property Services recently reported that December 2010 proved to be a disappointing end to what proved to be a fairly good decade for most landlords, as rental prices eased slightly, those in Devon, Cornwall and Somerset still saw their profit margins maintained.

Is the South West a good investment for landlords?

With an average rent of £637 the South West does not compare with the rates achievable in the capital, but many landlords will be delighted by the 1.7% increase in December. Industry experts, shocked by the general fall in rental prices across the UK last month will also be mildly surprised by the growth in a part of the country where increases in the winter months are far from the norm.

Property owners in the area will also be delighted by the promising figures released by the Land Registry recently. They suggest that the South West is the only region in the country outside of the capital that is still experiencing house price increases. Although less than 1%, the increase means homeowners in the area are seeing their investment grow which can only be good news in the current climate. The combination of the two factors means landlords in the South West will be looking at increased rental yields on their books and can go forward and buy property insurance on new projects with more than a modicum of confidence.

Does landlord insurance cover void periods?

Of course the region sees a fair amount of seasonal readjustment to its figures because of the lucrative tourist industry. This can mean a bonanza for some landlords in the summer and is further reason to rejoice at the December figures. As a rule the winter months, with the exception of Christmas week, often generate little income for some landlords, many of whom actually take out empty property insurance over this period.

Winter is usually a period for consolidation and gives some landlords the chance to update their properties in time for the onset of the summer and spring season where they hardly have time to draw breath. The advent of updating and upgrading properties means that landlord insurance policies must also be constantly evaluated, but this is no problem for the organised landlord especially one who is seeing his business booming.

Tags: landlord advice, Landlord Insurance
Posted in Best Practice Guides for Landlords, Insurance Guides, Landlords Insurance | No Comments »

Kiwi’s one step ahead of UK counterparts

Tuesday, January 11th, 2011

As landlords in the UK look forward to the announcement by Housing Minister Grant Shapps on landlord/tenant relations today, it seems that their fellow property investors in New Zealand are one step ahead.

It is anticipated that the announcement by Grant Shapps today will enable landlords in the UK to get rid of bad tenants a lot quicker than the 12 months or more it can take at the moment. And although the new plan should see improvement in moving on rogue elements, charities such as Shelter are already making noises that they will closely monitor the changes as they are worried it will increase the number of homeless people.

In New Zealand legislation went through in October which seems to have cleared the air somewhat for both landlords and tenants. The Residential Tenancies Amendment Act (RTAA) covers several contentious areas of tenant/landlord agreements.

The main area of concern was the 90 day period after a fixed term tenancy came to an end. In the past a landlord could ask a tenant to leave immediately in this period or indeed a tenant could walk out of the property without notice leaving a landlord with a void property. From now on the 90 day period no longer occurs. A fixed term tenancy automatically becomes a periodic tenancy when the contract expires, giving both landlord and tenant breathing space to sort out their future plans.

The act also covers areas such as health and safety issues, fire regulations and the behaviour of tenants and landlords. In similar vein to the plans Grant Shapps is expected to announce today in the UK, tenants in New Zealand now have new responsibilities. It will become unlawful to harass neighbours or exceed the agreed number of residents in a property. A fine of up to $2000 can be imposed on miscreants and a fine of $1000 can be levied on tenants who refuse to leave their property.

Landlords are also asked to fulfil their part of the bargain and now must maintain their properties to a certain standard and if they don’t can be fined up to $3000. On the bright side, landlords can now dispose of belongings left behind by former tenants if they do not collect it within a certain time frame.

All in all the act has been well received because it lets both tenant and landlord know how they stand with the law, and with this in mind landlords can go out and buy landlord insurance for their properties knowing exactly what they need to get cover for.

Tags: Advice for Landlords, landlord advice, Landlord Insurance
Posted in Best Practice Guides for Landlords, Insurance Guides | 1 Comment »

How to Be a ‘Green’ Landlord

Thursday, January 6th, 2011

There is no denying the fact that being green is the in thing to be. Consumers across the UK are attempting to save both money and the climate by trying to reduce their carbon footprint. It makes sense that anyone looking at renting a home from a landlord is now more aware of green issues and considers the energy efficiency of a property when it comes to looking for a place to live.

For over two years, landlords have had a legal duty to show all prospective tenants the current Energy Performance Certificate score of the property they are interested in renting, on request. No longer can a landlord buy landlord insurance and just sit back. As more and more landlords try to make their property as attractive as possible to tenants by installing energy efficient products, competition in the sector escalates.

Renting from a landlord appeals to students and people who are looking to save money before jumping onto the property ladder. So it is obvious that the more money a landlord can save them with good energy efficiency, the more attractive the property will be. Possessing a good energy efficiency rating is something that is worth showing off to everyone who comes to view the property.

There are a few schemes which can help a landlord get a property improved as far as green credentials are concerned. One of the best is the boiler scrappage scheme which gives a £400 voucher to help with the cost of installing a boiler that will be G-Rated. Other ways of becoming greener include installing double glazing and getting both efficient and up to date insulation fitted. This should include the loft and the hot water tank. Replace worn out appliances with the most energy efficient products possible, this is easy to do as they all have their ratings displayed on them and maybe install a smart meter so that the tenants can monitor their energy usage.

Some local councils will offer grants for different home improvements but it depends on which area the property is in, so it’s worth giving the local housing team a call to see if any assistance is available. Making the home energy efficient does not just make the tenant happy, it can also help to get a better return on what is a big investment for any landlord.

Tags: Advice for Landlords, eco friendly, landlord advice, Landlord Insurance, landlords
Posted in Best Practice Guides for Landlords, Insurance Guides | No Comments »

Making a Tenancy Agreement

Tuesday, January 4th, 2011

Along with having landlord insurance, one of the first things that a landlord needs to do is create a tenancy agreement. One way of doing this is using a standard form and these are very easy to find in stationers or they can even be downloaded from appropriate online sites.

It is vital to make sure that the correct type of tenancy agreement is made out, especially if the landlord is going to be living in separate accommodation in the same property or if more than one room is being let out to students in what is a shared property. Every landlord should ensure that all forms being used for the tenancy agreement are up to date. The wording on all forms that were printed before 2007 are now highly unlikely to comply with the tenancy deposit scheme.

It is never a good idea to set the initial tenancy for more than six months although this does not apply if the tenant is known and trusted already by the landlord. Six months is ample time for landlord and tenant to assess if the agreement is working for them both and also gives them both a get out clause if it is not ideal. In a normal assured short hold tenancy the tenancy will continue after the first six months or whatever period was written on the agreement. It will normally continue on a monthly basis as long as the rent is paid each month on time.

A landlord should never amend a tenancy agreement without first speaking to a professional. If a landlord does not do this it may make the entire agreement invalid.

For the tenancy agreement to comply with the Landlord and Tenant Act 1987 it must contain the address of the landlord. However, if a landlord is living abroad the address of the letting agent can be used instead. All payments the tenant is responsible for and which are to be covered as part of the monthly rent should be stated clearly in the agreement. Some landlords agree for them to pay some of the bills such as council tax and utility bills and they will normally have a clause inserted in the agreement which allows them to increase the rent if the cost of the bills increases.

It is also best to include an inventory of everything in the property, this includes contents and also the condition they are in at the start of the tenancy. Agree this with the new tenant before they move in so that there will be no disputes at a later date. Finally, it sounds obvious but a landlord needs to ensure that the tenancy agreement is properly signed by all the tenants, and that they have a copy of it with their signatures on before handing over the keys to the property.

Tags: landlord advice, Landlord Insurance, Property insurance
Posted in Advice, Best Practice Guides for Landlords, Insurance Guides, Landlords Insurance | No Comments »

Landlords with empty properties between tenants

Wednesday, December 22nd, 2010

Typically, when a tenant moves out, there is likely to be a period when the property is empty before a new tenant moves in. Every landlord wants this empty period to be as short as possible because each day will be costing money. This empty period means there are some jobs which a landlord needs to do.

As soon as a tenant leaves, it becomes the responsibility of the landlord to pay council tax on his property. However, any property that remains empty and unfurnished will be entitled to exemption from council tax for up to six months. Just contact the local council tax office and notify them that the property is empty. All the utility bills should be transferred back to the landlord’s name because as with council tax, the landlord also becomes responsible for each utility bill during any empty period. It is very important for a landlord to take readings of the gas, electric and water (if there is one) meter on the day the tenant leaves the property, and then contact the utility providers with up to date meter readings. They will then change the accounts over to your name. Then take the meter readings again when a new tenant moves in, that way you incur charges only when the property is empty.

Take the opportunity to fix anything which is broken during a void period, this is a much better idea then waiting until the new tenant reports that it needs fixing. It is much easier to maintain a property while it is vacant because it saves having to give the tenant notice and then arranging a convenient time which suits the landlord, the tenant and the tradesman involved in the repairs. To reduce costs and also for safety reasons, ensure all of the gas and electrical appliances are turned off. Some plug sockets will have fuse lights and these can be flicked off, even with no electrical appliance plugged in the LED in the socket will still be using power, even if it is just pennies. If the property has white goods, then it might be a good idea to turn those appliances off and leave open the fridge, freezer and washing machine doors to avoid any nasty odours.

Ensure the timer settings for the hot water and heating are disabled. Failing to turn off the timer may result in utility bills for services that were never needed or realised were actually being used. However, if the property is going to remain empty for longer than a week during cold winter periods, it’s a good idea to occasionally allow the pipes to warm up by turning the heating on. This will help to prevent the pipes from freezing over, and making them vulnerable to bursting.

When a new tenant does move in, make sure your landlord insurance policy is up to date and gives comprehensive cover should the worst happen.

Tags: Advice for Landlords, Landlord Insurance, Landlords Insurance
Posted in Insurance Guides, Landlords Insurance | No Comments »