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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
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Barratts hovering over the private rental market

Tuesday, February 15th, 2011

In a sign of the times, one of Britain’s biggest home builders may be turning their attention to the residential letting market, and at the same time giving a boost to landlord insurance providers.

It is no secret that the housing sector is in a bit of a mess at the moment. The situation across the UK is one of contrasts. On one hand more and more people are looking for quality housing, so much so that many town and city councils are being overwhelmed by the numbers joining the waiting list for accommodation. On the other hand house prices are dipping again and the construction industry is now building fewer houses then at any time since the Second World War.

Good time to be a landlord

The situation in general has been a bit of a boost for the private landlord. He has suddenly found that providing he takes care of his properties, gets decent rented property insurance and advertises in the right places, then void periods are a thing of the past. Combined with this, rental yields are slowly climbing upwards as the market forces prevail.

The situation has obviously not gone unnoticed by the national house builder, Barratts. For many years they have been one Britain’s biggest house builders and have always been successful and forceful in helping interested parties to complete a deal. They are now looking at a different sort of deal altogether, they seem set to become private landlords in some guise.

Two ways to approach the change

At the moment according to the chairman of the builders they are looking at two new ideas based around the London property market. The first idea will involve Barratts developing a site in the normal manner and then selling a percentage of the development to a private landlord in a joint venture. The second idea mooted is to build and sell from the outset to a private concern.

If Barratts do go through with the plan then they reckon they could easily provide over 1,000 houses per year to the private sector in this way. They would be the first big builder to get involved in the rental private sector without encouragement from the public purse and will certainly go up in the eyes of property insurance agents across the UK.

Tags: private rental market
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No improvement in housing market anticipated yet

Thursday, February 3rd, 2011

As the latest forecasts for the housing market in 2011 from banks and building societies filter through, and the announcement of lending figures for December 2010 hit the headlines, it would appear there are still opportunities for landlords prepared to buy properties and back up their purchases with landlord insurance.

House prices dropping

Once more a building society, this time Nationwide, has announced that real estate prices dropped in December. According to their figures, it is the fifth drop recorded in the last seven months and if things continue the same into 2011 then the average house price in the UK will drop to below £160,000 for the first time in years.

Nationwide anticipate that house prices are most unlikely to rise in 2011 simply because there is no good news on the horizon. The current situation is not going to prompt any but the brave and needy to go out and risk buying property even though cheap property insurance can still be found. Plenty of hidden signals in that announcement for those who actually are brave enough then!

At the same time as Nationwide announced their gloomy forecast for the coming year the Bank of England (BoE) and the Council of Mortgage Lenders (CML) came up with some pretty eye opening figures themselves.

Mortgage uptake at its lowest

Figures released by the BoE show that borrowing, specifically for mortgages, in 2010 was just £8.15 billion. This was the lowest yearly total recorded since records began and was down massively on 2009 totals which themselves were poor. To compound the miserable set of figures, in December 2010 people paid back more than they borrowed and this is only the third time this as happened while records have been collated. At least George Osborne’s message about tightening our belts seems to be getting through.

The CML chipped into the misery basket by announcing that mortgage approvals dropped by 10% in December 2010 to just over 42,000 the worse figures since the depths of the recession in early 2009.

Can landlords profit from the situation?

In every situation there are winners and losers. Many landlords are seeing the value of their properties go down, but that is being countered by the strong demand for rental accommodation and the consequent high rental rates being achieved. As for those looking to expand, well the aforementioned state of the market means there are bargains to be had almost anywhere in the UK. The secret for landlords is to back up their business with good landlord insurance and make the most of excellent opportunities.

Tags: housing market, No improvement in housing market
Posted in Housing Market, Landlords Insurance, Real Estate | No Comments »

Landlords told to expect a bumper year

Tuesday, February 1st, 2011

With 2011 less than a month old, industry insiders are giving prospective landlords two morsels of advice that they see as essential to getting the most out of the buy-to-let sector. Firstly, get strong, comprehensive landlord insurance and secondly, present your properties to the best standard you can achieve.

Already the financial markets are giving conflicting signals about what to expect in the coming year, but those in the property sector insist that 2011 will be a fantastic year for those landlords willing to put in the extra work that any thriving business needs to push it onwards to greater success. They qualify the remarks by saying that any good businessman should also have a safety net just in case things go wrong.

Which areas will benefit?

Letting agents across the country are already reporting high levels of interest in their properties with some saying the number of people registering for rental properties is 15% above the same time last year. Areas that have been in the doldrums regarding landlord profitability in the past such as South Yorkshire and Wales are reporting brisk business daily. One agent at Lancaster’s letting agency in Barnsley reported the letting scene as “manic” as up to half a dozen would-be tenants are looking at each and every property on their books.

Interested parties agree

Independent letting company, Leaders, say the prospects for landlords have rarely been better. Paul Weller, the Chief Executive, said recently that anyone looking to enter the sector or even extending their portfolios should look upon January 2011 as the perfect time. Other industry insiders say a similar thing; over the last fortnight two other companies; Landlord Zone and Landlord Assist have said signs look exceptionally good for the landlord with cash in his pocket and property insurance in his safe.

With several economists saying the UK is heading for a sea change in the way we view property and the ownership of it, landlords could be forgiven for rubbing their hands and waiting for the money to roll in. However, most of the experts who are forecasting a bumper year for the letting industry say it is the landlord who presents his properties in the best possible light that will succeed. According to Leaders this type of landlord will not only attract better rates of rent but he will secure tenants looking for a longer rental agreement, therefore giving him more security.

Tags: Advice for Landlords, landlord advice, Landlord Insurance, Landlords Insurance
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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
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Buyers wise up to the housing market

Thursday, January 20th, 2011

As the housing sector stumbles into 2011, some experts believe that the time homes stay on the market will at long last start to come down.

The news that house prices had once again started to fall at the back end of 2010 caused dismay in millions of homes across the UK. Homeowners who had been relieved to see house prices start to edge upwards in the spring of 2010 were once more looking at the possibility of being in negative equity. For many in the industry it came as no shock at all.

There are many reasons why house prices should not go up just yet. The austerity measures imposed by the Government mean we shall all be worse off in the near future. The threat of unemployment because of the aforementioned policy will almost certainly cause many couples to postpone plans to move house and the sheer weight of numbers of homes on the market means that the law of supply and demand favours the buyer. Lastly but not leastly we have the high deposit and crippling interest rates demanded by the banks and building societies to new customers.

So why should some experts believe the amount of time a house stays on the market will start to come down in 2011? The simple answer is that people at long last have grasped that changing lenders, in most cases, will lead to an increase in their mortgage rates.

In the past 18 months thousands of homeowners have accepted offers from interested parties only to find that seven days later the offer had been withdrawn. In nearly all cases the prospective buyers had discovered that the rather nice interest rates that they were on with their old mortgage would not be available when they took out a new mortgage on a new property. Instead of paying something in the region of 4% they were being asked to pay around 6.5%. Not surprisingly the overwhelming majority said no thank you to the banks and no thank you to the frustrated homeowners looking to move on.

The market was left to those with big deposits and deep pockets and for some landlords the chance to increase their portfolios and get cheap landlord insurance on bargain properties was very inviting.

Estate agents believe that the public in general are now wise to the fact that changing mortgage is not feasible unless your economic situation is good. They are now beginning to see offers on properties going full course and expect the situation to improve as the current year progresses.

Tags: Advice for Landlords, housing market, Landlord Insurance
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Residents of Queensland united in facing disaster

Tuesday, January 18th, 2011

As the aftermath of the Queensland floods begins to impact, the need for tenants and landlords to work together to alleviate the situation becomes more pressing. The good news is that, in general, the signs are encouraging.

It is often said that good can come from bad and while no-one underestimates the size of the calamity and desolation felt by those who have lost loved ones in the waters; it does appear that the community is rallying round and displaying a determination to look out for each other over the coming weeks.

The need for landlords and tenants to work with each other in situations such as those in Queensland at the moment, is of course, extremely important. The Property Owners association (POA) and the Residential Tenants Association (RTA) are working closely together to protect the interests of their members, and Housing Minister Karen Struthers, has brought together a team of advisers and enforcers to get Brisbane in particular, back on its feet.

The immediate problem for landlords is their loss of income and the massive repair bills they face to get their properties back into shape. Never before in Queensland has landlord insurance been so welcome.

The problem for tenants is even more pressing, many of them are homeless. Minister Struthers has asked all landlords on the outer ring of the tragedy not to benefit from the misery of others by hiking their rental charges and has reminded all concerned that under the present situation either landlord or tenant can end a contract immediately if a property is uninhabitable because of a natural disaster.

The Government are also alleviating the situation by handing out bond loans to tenants so they can move into properties immediately without the landlord losing out. All in all the citizens of Queensland look to be bearing up to the challenges they now face very well. There have been few if any reports of looting, the people living in the recovery centres appear to be settling in with their fellow refugees and the State Government appears to be doing all it can to ease the suffering of those affected. They may prove to be a reference point for towns and cities in the UK if the worst should ever happen over here.

Tags: flooding, Landlord Insurance, residential landlords
Posted in Landlords Insurance | 1 Comment »

London and Dubai, a tale of two cities

Thursday, January 13th, 2011

The fickle nature of investing in the buy-to-let market is amply demonstrated by the different situation landlords in the UK and Dubai are experiencing at the present moment.

Landlords in the UK express their confidence in the market with each passing survey. Rental yields on average are going up and void periods are going down. In and around London it seems as though many residential landlords are falling over themselves in the rush to purchase landlord insurance cover on the new properties they have bought at knock down prices. Even the new limits soon to be imposed on Housing Benefit can’t dampen their enthusiasm.

What a different story in Dubai! Owners are desperately trying anything they can to attract buyers or tenants to take an interest in their property. Some industry experts reckon by the end of 2011 there may well be up to 100,000 properties waiting for tenants. That is one heck of a void problem in one city, and apparently the situation in neighbouring Abu Dhabi is not much better.

Landlords desperate to acquire a tenancy for their property are offering better deals day by day as the competition gets fiercer and the letting price lower. Many landlords are now offering free TV and internet deals included in their rent and others are even going so far as to offer re-location fees to anyone willing to move into one of their properties.

Letting agencies and estate agents are also losing out as landlords are cutting them out and resorting to advertise directly on the internet. The situation is bleak and looks set to get worse before it gets better. With prices tumbling some landlords are thinking of withdrawing their properties from the market in the hope that a cut in supply will generate higher rental yields but in the short term this policy seems doomed to failure. Experts expect the current situation to last at least 12 months and many anticipate the market won’t find the “bottom” for even 2 years.

All in all a salutary reminder to UK landlords to make hay while the sun shines!

Tags: Buy-to-Let Insurance, buy-to-let market, Landlord Insurance
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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
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Getting a Landlord Accreditation

Thursday, December 30th, 2010

Being a landlord is not easy; there is a lot that you need to know, from buying landlord insurance, acquainting yourself with legislation, plus the responsibilities that go with being a landlord, and all the day to day running costs.

Throughout the United Kingdom this has been recognised by local authorities who are encouraging landlords in the private sector to become part of local landlord accreditation schemes. This is not just designed to benefit the landlords; it is there to help the tenants as well. Local councils and private landlords have been working closely together, sharing information that helps the landlord manage their rental properties. Arranging meetings where landlords get together to discuss any issues which affect them, and setting up voluntary accreditation schemes which will recognise and reward all the landlords who manage their rental properties well appears to be working successfully.

Accreditation is a set of standards which are laid down by an individual authority and apply to the way a property is managed and its condition. Any landlord who decides to join one of the schemes will become an ‘accredited’ landlord, and will then be listed on the local council’s accredited list. This is of benefit to the landlord and prospective tenants. The scheme is voluntary, and there is no obligation for a landlord to join, but when it comes to renting a property they are identified locally as a good landlord, which puts them ahead in the list. Tenants will know that renting a property from an accredited landlord, will mean the property will be in a good condition and the tenancy is going to be managed well.

Some council’s even have grants and loans on offer to an accredited landlord if they need to renovate their property to the standards set out by the scheme. Some schemes even offer accreditation for tenants who agree to stick to certain standards of behaviour such as respecting the accommodation, respecting the neighbours and sticking to the terms of the rental contract.

Obviously having both the landlord and tenant accredited is good for everyone concerned. There are basically two types of scheme, one will accredit the person, and the other will accredit the property and most schemes will combine both elements, for example the scheme will include criteria that relate specifically to the condition of the property, but will also look at the way the landlord has been managing the property.

Tags: landlord advice, Landlord Insurance
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