Property

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Top tips for new student landlords

Top tips for new student landlords

Student property remains one of the most lucrative investments available to landlords, with sky-high double-digit yields currently on offer in many parts of the country.

With students heading back to university over the next few weeks, demand for student housing is currently high thanks to the growth of international students coming to study in the UK, and rise in UK nationals signing up for higher and further education. It is therefore unsurprising that investing in student property is on the rise – up 17% according to Savills.

But being a landlord is not easy and there are many issues faced, therefore bill-splitting service Glide had created a guide on how to deal with various tenant issues in the best way possible.

Repairs

Although student tenants have a reputation for house parties and late night drinking, that stereotype is perhaps a little outdated.

With the rising cost of student loans and students themselves becoming more money conscious than other generations, ensuring that their deposit is returned to them at the end of term likely a key priority for the majority.

However, as with renting to anyone, wear and tear is to be expected, especially for larger multi-occupancy properties, while any issue with the structure or exterior of the property you are renting out is your responsibility to maintain. Issues relating to  flooring, walls and any sanitaryware, such as toilets, sinks or baths, must also be resolved by you if they break.

But items brought into the property by the tenant are their responsibility to maintain. It’s not the landlord’s responsibility to pay for the repairs on items like TVs which were provided by the occupant.

It is important to remember to take an inventory of the property before tenants begin their occupancy, in order to enable you to tell the difference between repairs which naturally develop and issues that are caused by tenant neglect. Photos of the premises are useful to have in case of dispute.

Utilities 

As a landlord, you are responsible for ensuring that all gas and electric appliances are safe in the property, and a gas safety check is required every year. It is also your duty to install smoke alarms on every floor of the building – and carbon monoxide alarms in every room where a fuel burning appliance is situated.

But while it is down to the landlord to ensure the safety of these features, if appliances provided by the tenant break, or light bulbs need replacing, that’s down to the tenant to replace themselves. It is important to clarify these terms in the lease agreement to avoid any disagreements.

Making sure the boiler works and is regularly serviced to maintain the constant and safe supply of hot water for an occupant is also a non-negotiable. Should a boiler break, or if any leaks in the water supply occur, it is the landlord’s responsibility to get these fixed as soon as possible. It is also worth checking with your tenants how long the property will be empty during the Christmas break – if the boiler is switched off for extended periods during a particularly cold spell, there is a risk that the pipes will freeze, which could lead to central heating issues when tenants return in January.

A landlord must keep the general state of the property to a level which is deemed to be fit for habitation. This essentially means they must be kept clean, tidy and without any health and safety hazards for when the tenant moves in.

From there, it is the occupant who is responsible for the upkeep of the home, including features such as the gardens. However, issues like mould, damp and pests – such as rats – must be resolved by the landlord if they  result from general wear and tear.

As the owner, you are entitled to inspect the property as many times as you like, but tenants must be given at least 24 hours written notice advising of your intentions to enter the premises.

Bills and payments

The collection of rent payment is a concern, especially for student tenants, who may not be used to the responsibility of regular payments and arranging bills. However, the stigma around students being irresponsible with money is outdated and not reflective of the current generation.

CPS Homes of Cardiff said that “Students make for reliable, almost guaranteed tenants each year due to the academic cycle. You know that if the current tenants are planning to leave at the end of their tenancy a new group is just around the corner, ready and waiting to move in at the start of the next academic year.

“And contrary to the beliefs of many, they are usually very prompt payers of rent because they’re in receipt of a student loan that they receive termly.

“Having confirmation of this student loan is far stronger than an employment reference because people are far more likely to quit or lose their job than drop out of University.

“If they ever do get into trouble with their rent payments, a parent or guardian will have usually agreed to act as a financial guarantor at the start of the tenancy. This means a landlord can approach said person and demand full payment of the balance owed.”

If you are the landlord of a shared property, it is not up to you to organise the payment of rent and utility bills.

This is the responsibility of the occupants, as the money is ultimately to be paid to you, while any disputes should be settled between tenants.

However, encouraging your tenants to sign up to a bill splitting service takes the headache out of arranging bill payments – each tenant receives a bill for their share of the utilities, meaning no-one is stuck chasing for payments and all potential arguments are negated.

The Guild supports clampdown on rogue landlords

The Guild supports clampdown on rogue landlords

The government’s decision to invest an additional £4m in funding for local councils to tackle criminal landlords and letting agents has been warmly welcomed by The Guild of Property Professionals.

The housing secretary, Robert Jenrick, announced on Friday that he has pledged new funding to be used to clamp down on rogue landlords, with the money set to be shared between more than 100 councils across England

He commented: “Councils already have strong powers to force landlords to make necessary improvements to a property through the use of a range of measures, including civil penalties and banning orders for the worst offenders.

“The grants will support a range of projects to enable councils to make the best use of these powers. This will include trialling innovative ideas, sharing best practice and targeted enforcement where we know landlords shirk their responsibilities.”

There are more than 4.5 million households in the private rented sector in England, with recent statistics showing that 82% of private renters are satisfied with their accommodation, which although impressive, does suggest that there is room for improvement

The Guild’s inhouse Compliance Officer, Paul Offley, said: “We fully support this initiative as it will ensure that rogue landlords and letting agents are punished for breaking the law and it will also ensure that more tenants are treated fairly.

“With the funding providing councils with a means to crack down on illegal activity in the lettings market, tenants will have more protection and the standards of the rental sector will be raised.”

“An environment where exploitative landlords are stamped out will enable good landlords and letting agents to thrive,” he added.

But the government funding to root out criminal landlords has been described by the Residential Landlords Association (RLA) as inadequate to tackle the scale of the problem.

David Smith, policy director for the RLA, said: “We welcome the government’s focus on rooting out criminal landlords. For too long the debate has been driven by ideological calls for more regulation of the sector. What is needed is better enforcement of the powers already available to tackle the minority who bring the sector into disrepute.

“The funding though is nowhere near enough. Instead of offering inadequate and sporadic pots of money, it is critical that the government provides proper, multi-year funding to enable councils to plan and prepare workable strategies to find the criminal landlords. This should be supported by councils having the political will to prioritise enforcement against the crooks rather than tying good landlords up in licensing schemes which do nothing to protect tenants.”

Rogue landlord fined £27k for unsafe HMO

Rogue landlord fined £27k for unsafe HMO An unscrupulous landlord has been fined £27,000 over an unlicensed HMO in Luton with multiple fire and safety breaches. ​

Luton Magistrates Court heard that the unlicensed property at 14 Kenneth Road, Luton, LU2, had poor fire alarm systems and blocked fire exits, missing and broken tiles on the roof, and evidence of rat infestation.

Marco Caruso of Verulam Court, Hendon, pleaded guilty to illegally managing a HMO and seven breaches of HMO regulation.

He was fined £27,000, which included a £170 victim surcharge and costs of £848.70.

Cllr Tom Shaw, portfolio holder for housing, commented: “This is a great result for the rogue landlord project [being operated by the council] and an excellent example of how we are working together to ensure that private housing in Luton is of a good standard.

“If an HMO is poorly managed, the tenant’s safety could be at risk.

“We are committed to identifying rogue landlords and making sure the properties they manage are in a good condition and adhere to safety regulations, or face prosecution.”

Help and support available for landlords paying tax and keeping records

Help and support available for landlords paying tax and keeping records The tax return deadline when filing your online Self Assessment for the tax year ending 5 April 2019 is less than a month away.

Filing an annual tax return is a necessary task for every self-employed person, including buy-to-let landlords, with the 31 January deadline for the 2018/19 Self Assessment tax return at midnight on 31 January 2020.

Whether you have just started out as a buy-to-let landlord or you are an established property investor, there is much to consider from a financial point of view.

Around 10 million people must complete a self-assessment tax form every year, typically because they are self-employed, run their own business or have untaxed income or capital gains, such as from a buy-to-let property, a trust or investment portfolio.

There is no need to fret over filing your tax returns, as it does not even require an accountant.

However, if you are concerned about going it alone and doing your own tax return, you may wish to check out HMRC’s ‘help and support for landlords’.

For more information, click here.

HMRC also offers online tax return help for landlords to their online series of help and support webinars.

View all HMRC webinars.

New trade body launches for BTL landlords

New trade body launches for BTL landlords A new landlord organisation, which is the largest ever trade body in the letting sector, has been officially launched.

The National Residential Landlords Association, which came into force yesterday, has a membership of more than 80,000 landlords.

The new organisation has come about after the National Landlords Association (NLA) and the Residential Landlords Association (RLA) agreed to merge in autumn, with a view to delivering a stronger voice for landlords in the private rented sector.

Ben Beadle is the NRLA’s new chief executive, having joined from Touchstone, part of the Places for People housing group. He was previously managing director of TDS Northern Ireland and director of customer service with the TDS.

The two previous chairs, Alan Ward of the RLA and Adrian Jeakings of the NLA, said in a joint statement: “After more than 20 years of friendly competition the time is right to create a single organisation to represent and campaign for landlords.

“With so much of our work done in parallel there are major benefits to be gained for our landlord members.

“We will be stronger together when presenting a unified voice to government both nationally and locally about the importance of supporting the majority of landlords who do a good job providing the homes to rent the country needs.”

Boris Johnson’s housing plans are a ‘crisis waiting to happen’

Boris Johnson’s housing plans are a ‘crisis waiting to happen’ The housing plans being put forward by Boris Johnson have been described by the National Landlords Association (NLA) as “ruinous” and likely “to lead to an exodus of responsible landlords from the private rented sector”.

The NLA fears that the government’s flagship policy to introduce legislation to end Section 21 repossessions, as announced in yesterday’s Queen’s Speech, could potentially pave the way for the mass exodus of landlords from the private rented sector in the coming years.

The association, which represents 42,000 members, cited research from Capital Economics, an independent consultancy, showing that if Section 21 is abolished without any accompanying reform of the law courts, the supply of private rented houses in England could fall by as much as 20%, with up to 960,000 fewer homes available to renters if landlords pull out of the market.

It also pointed to data showing that there would be a 59% reduction in the number of private rented dwellings available to households in receipt of local housing allowance or universal credit – 770,000 fewer residential units – because landlords would instead opt to rent to people more able to demonstrate a track-record of making regular payments and a steady income.

Richard Lambert, CEO of the NLA, commented: “Landlords need certainty of their ability to end failing tenancies. If this cannot be provided by Section 21 then the Government must reform the courts. Strengthening landlords’ rights will make no difference if the court process is seen as simply delaying or obstructing possession.

“The NLA is deeply concerned that the Government will precipitate a housing emergency, deepening the crisis of supply and affordability faced by many households. Landlords will stop letting to tenants who are perceived as higher risk and ultimately sell properties which would otherwise provide much needed homes for those who cannot afford to buy.

“If ministers do not address the problems of capacity within the Courts Service before removing landlords’ ability to use the no-fault procedure, the dramatic increase in cases that will be brought before it will bring the system to its knees.”

Scrapping Section 21 is ‘another attack’ against BTL landlords

Scrapping Section 21 is ‘another attack’ against BTL landlords The Queen has announced the new government’s priorities for its coming term, and it includes a proposal to abolish Section 21 of the Housing Act and reforming the grounds for possession, as part of a new Renters’ Reform Bill, designed to “introduce a package of reforms to deliver a fairer and more effective rental market”.

But in the absence of any meaningful plan to boost the level of social housing in this country, the announcement confirming the abolition of Section 21 in yesterday’s Queens speech has been described by ARLA Propertymark as “another attack against the landlords who actually house the nation”.

The trade body’s chief executive, David Cox, said: “If Section 21 is scrapped, Section 8 must be reformed and a new specialist housing tribunal created. Without this, supply will almost certainly fall which will have the consequential effect of raising rents and will further discourage new landlords from investing in the sector.

“ARLA Propertymark will be engaging with the government to ensure they fully understand the consequences of any changes, and we will be scrutinising the legislation, to ensure landlords have the ability to regain their properties if needed.”

The government also plans to introduce a new scheme to permit tenants to transfer their tenancy deposits when they move properties.

The new Lifetime Deposit scheme will permit renters to transfer their deposit from one property to another instead of being left out of pocket for weeks while they wait to be reimbursed from their old landlord but have to spend money securing their new property.

However, landlords will also be given strengthened powers to regain possession of their property under the new proposed Bill, while the expansion of the database of rogue landlords is also included in the legislation to be introduced in Parliament.

But the Residential Landlords Association (RLA) has also warned of a rental crisis that could lead to a mass sell-off of properties following the announcement Section 21 will be scrapped.

The organisation is calling on the government to develop a dedicated housing court to ensure that there is easily accessible and swift justice available where there are conflicts between landlords and tenants.

David Smith, RLA policy director, commented: “We accept the need to protect tenants from abuse, but it is crucial that plans to reform the way repossessions can take place are got right if the government is to avoid a rental housing crisis.

“Unless the new system is fair to good landlords as well as tenants, those same landlords who we need to support simply will not have the confidence to provide the rented homes that are needed to meet the demand.”

One in three landlords plan to sell in the next year

One in three landlords plan to sell in the next year The UK could be heading for a rental crisis, with experts dreading the prospect of a chronic property shortage in the PRS as more than a third of private landlords look to sell up in the next year in the face of lower profits, new research shows.

A wide-ranging study of 2,000 landlords by the Residential Landlords Association’s (RLA) research exchange, PEARL, has found that almost 34% of private landlords are looking to sell at least one property over the next 12 months.

The study also found that just 12% of landlords are looking to expand the number of homes they rent out, down from 14% a year ago.

Almost half of landlords – 45% – told the RLA that the 3% stamp duty surcharge on additional properties had been a deterrent to further investment in property.

The drop in housing supply comes at a time when the Royal Institution for Chartered Surveyors (RICS) is warning that the demand for private rented homes is on the up.

The RLA is now calling on the government to scrap the stamp duty levy where landlords provide homes adding to the net supply of housing.

This should include developing new build properties, bringing empty homes back into use and converting larger properties into smaller, more affordable units of accommodation.

David Smith, policy director for the RLA, commented: “This is yet more clear evidence of the sell-off of private rented housing largely due to the government’s extra tax on new rental homes.

“It is ridiculous that when the country needs all the extra housing it can get, it penalises good landlords who invest in new homes.

“With a new government and a Budget due, we need a shift in policy to one that supports investment because otherwise there will be a growing supply crisis in the private rented sector as demand continues to rise.”

Top UK regeneration hotspots unveiled

Top UK regeneration hotspots unveiledWhen it comes to investing in property, it pays to know about the latest property hotspots and up-and-coming areas whether you are buying-to-let or simply looking for capital growth.

Buying at the early stages of a long-term plan offers good potential for an increase in property values and solid rental returns. So where potentially are the best spots to invest for the long-term?

Research by Glide, broadband and utilities provider , has identified 10 areas where properties offer the potential for a regeneration price growth premium in addition to average values in the local area.

The company made a series of FOI requests to local councils in order to find the number of empty dwellings and commercial properties across the UK.

Collectively, across both categories of building, in the month of September 2019 there were 617,527 empty buildings across the UK.

Of those councils which held the information, Birmingham was revealed as the leading council area for the most potential space, with 8,086 residential properties and 7,622 commercial buildings in the city and its suburbs being empty.

Second is Liverpool, where 15,339 buildings are currently not occupied, while regions across the North dominate the top five, with Manchester, Leeds and Bradford also ranking highly.

Empty residential properties Empty commercial properties  Total
1 Birmingham City Council 8086 7622 15,708
2 Liverpool City Council 11073 4266 15,339
3 Manchester City Council 10531 4003 14,534
4 Leeds City Council 8331 4528 12,859
5 Bradford Metropolitan Council 2610 7908 10,518
6 Durham County Council 7330 1573 8,903
7 Bristol City Council 6403 1742 8,145
8 Cheshire West and Chester 5860 1897 7,757
9 Sheffield City Council 5063 2610 7,673
10 Cornwall Council 5795 1662 7,457

Jason Lloyd, head of residential at Glide, said: “The research has revealed the high number of empty properties and businesses across the UK, particularly across some of the major northern Council areas.

“But whilst it is troubling to see so much wasted residential and commercial space, it does represent a clear opportunity for developers, and hopefully this study will help prospective investors pinpoint where there is the most potential for growth.”

Improving communication with your tenants

Improving communication with your tenants When investing in the buy-to-let sector it is important to have a good relationship with your tenants, and that often requires good communication.

If you communicate well, both parties will understand their responsibilities, know that the other is keeping to theirs, and the tenancy will typically run more smoothly, which is what is required if you are looking to keep a tenant in your property on a long-term basis.

Neil Cobbold, chief operating officer of PayProp UK, commented: “If tenants are clear on what to expect, they are more likely to be satisfied and stay in the property for longer – at least as long as those expectations are then met. This can help reduce arrears and void periods for letting agents and landlords.”

According to PayProp, providing better information to renters about what they should expect from landlords and letting agents can ensure greater customer satisfaction.

The lettings payment automation provider says that educating tenants on the roles and expectations of each party can reduce confusion – and also reduce the chance of disputes.

But with research by the National Landlords Association (NLA) revealing four out five – 79% – tenants require better information on the roles and responsibilities of landlords and letting agents, clearly more needs to be done in this area.

Cobbold commented: “Proactively educating tenants on the rental process from the outset can save agents time from having to mediate unnecessary disputes between landlords and tenants.

“Some key areas where tenants may lack understanding relate to financial obligations and property upkeep. It’s very important to make sure tenants are kept informed throughout the tenancy. Often tenants are set wondering: ‘Has my rent been received?’, ‘How much do I owe?’, ‘Is my deposit safe?’, ‘Is it my responsibility?’ and ‘Who pays for repair work?’”

The How to Rent guide is a valuable resource, and yet a study by the NLA found that 67% of almost 900 tenants surveyed said that they were not aware of the government’s How to Rent guide which is a legal obligation for them to receive one at the start of a tenancy designed to help them understand their rights and responsibilities.

Cobbold continued: “Agents could do more to promote the How to Rent guide to consumers. It’s a free government resource that is updated regularly and includes a lot the information renters may need,” he explains.

“By making sure tenants not only read but understand this guide, letting agencies can manage expectations from the outset of a tenancy and save time and money on creating their own educational materials.”

Aside from promoting the How to Rent guide, letting agents and indeed landlords could take additional steps to help educate tenants and improve renter satisfaction.

Cobbold adds that key lease terms such as payment dates, tenancy lengths and notice periods should all be set out in a clear and accessible manner so tenants know what is expected of them and when.

He added: “A concerted effort from agencies and landlords to provide renters with more clarity could make for a more harmonious and efficient private rented sector.”

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