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Landlords: claim 75% off an electric vehicle charging point

Another week and another Government initiative to help us meet its goal of being carbon net zero by 2050.The new scheme is aimed specifically at landlords who want to improve the eco-credentials of their buy-to-lets.

Called the ChargePoint grant, the initiative is not brand new – instead it replaces the Electric Vehicle Homecharge Scheme. The new grant invites landlords to apply for a 75% discount on the cost of purchasing and installing a home electric vehicle charging point, up to the value of £350. There are, however, a few caveats to note. The landlord must own the parking area and be VAT registered or registered at Companies House to be eligible. 

Landlords who don’t engage in this Government initiative may find their buy-to-let gains an electric vehicle charging point anyway, as a related scheme gives tenants in rented flats and single-use accommodation access to a similar grant. In this case, the charge point installer applies for the grant on behalf of the tenant, with the discount coming off the tenant’s final installation bill. Again, there are conditions. The tenant must own, lease or have ordered a qualifying electric vehicle and prove there is dedicated off-street parking at their property.

The tenant-driven scheme is also a way for landlords who don’t meet the VAT or Companies House standard to benefit from the discount, by encouraging tenants to apply for the grant instead. 

Under 41s are prioritising eco aspects

New research conducted by E.ON among Gen Z (aged between 16-27) and Millennials (aged between 28-41) has revealed electric vehicle charging points to be high up on the home moving agenda.

Over three quarters (77%) of Gen Z said eco aspects, such as an electric vehicle charging point installed or a heat pump, were a priority when searching for a new home to buy or rent. In addition, four in five people (81%) aged between 16-41 would pay a higher price for a property if it had an electric vehicle charger, a heat pump or solar panels.

When it came to electric vehicle charging points specifically, 62% of Gen Z renters and buyers placed great significance on this aspect, while 80% of Gen Z and 78% of Millennials said they’d disregard properties that didn’t meet minimum energy efficiency ratings.

More electric cars are being sold

Landlords need to accommodate rising ownership of electric cars – 1 in 5 UK cars sold to date in 2022 is an electric vehicle, according to data from the Society of Motor Manufacturers and Traders. 

Sales are expected to accelerate in the coming months as the choice of electric vehicles in the UK market expands. Currently there are more than 140 different electric models to choose from, with another 50 planned by the end of 2022. This compares to just nine electric models in 2011.

Full details about the ChargePoint grant for landlords can be found on the Government’s website, or contact us if you are thinking of making any eco modifications to your buy-to-let.

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Should your next property investment be new?

Are you one of the 34% of landlords looking to expand their property portfolio in 2022? The statistic from Nationwide suggests confidence is building in the buy-to-let sector, with a third of investors looking to acquire additional properties this year.

When it comes to the type of properties that deliver the best rental returns, additional research has revealed the newer the property, the better the yield can be. In fact, rental market data analysed by Unlatch in March 2022 revealed new build homes can achieve rental premiums as high as 41% in the current market. 

As well as tenants who are willing to pay a premium to rent a newer property, more modern buy-to-lets give landlords multiple advantages. The homes don’t even have to be fresh from the housebuilder either – resale houses and flats that have been built in the last few years also bring with them benefits, as we explain.

Something that has moved to the top of both a tenant’s and landlord’s agenda is energy efficiency and this is where newer properties excel. While renters will look for homes that are cheaper to heat and power, as a result of rising fuel bills, landlords should have increasingly strict Minimum Energy Efficiency Standards (MEES) in mind. 

The Government would like all new and renewing tenancies from 2025 (and all existing tenancies from 2028) to have an EPC of at least a C, rising to a minimum of B from 2030.

While many period and 20th century properties would struggle to meet these tougher standards without costly and disruptive eco improvements, newer homes are built to stringent energy efficiency standards which result in excellent EPC ratings from the start.

As well as offering tenants cheaper energy bills, an eco-efficient new home can present landlords with savings at the very start of their property investment journey. Some banks and building societies are offering so-called ‘green’ mortgages’ to those whose property purchase meets pre-set minimum energy efficiency levels.

If the promise of lower interest rates, cashback and larger loans isn’t enough, homes built recently can also reduce a landlord’s maintenance bill. Aspects such as the electrics, central heating, plumbing and drainage should need little to no repair or replacement for many years, while the structure of homes built in the last 10 years may still be covered by a building warranty. Add in all-new kitchens, bathrooms and appliances, and the foundations are laid for a low-maintenance let.

Other perks of newer homes pertain to speed of let. Unlike older properties that may need work before they’re fit for habitation, a new home can present the ‘turn key ready’ proposition that reduces void periods and can command a premium rent among tenants. And if a housebuilder is offering a furniture pack as part of the deal, landlords can extend the appeal of their rental to professional relocators, students and overseas tenants.

Whether you’re attracted to buying off plan in the hope of some capital appreciation during the construction phase, tempted by a housebuilder offering to pay your 3% additional property stamp duty bill, or you’re tracking the rents achieved at a recently built development, maybe your next investment should be more modern. Ask us for a list of newer homes for sale that may make good property investments.

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Does gazumping happen in lettings?

Gazumping is a property term that resurfaces when the right conditions prevail. It’s most commonly associated with the sales market, when a mass of purchasers chase a small pool of available properties. Competition can get fierce, people can get desperate and gazumping can become a winning tactic – when a new buyer comes in with a higher offer at the last minute, in hope of seeing off rival purchasers. 

What is rarely discussed, however, is gazumping in the rental sector but it does happen. Demand for rental properties is rising, as evidenced by Zoopla. The property portal’s data analysis revealed the number of tenants searching for rental properties at the start of 2022 was 76% higher this year when compared to the same period between 2018 and 2021. At the same time, there were 39% fewer homes available to rent in January 2022 when compared to the same month in other years. 

The equation is a simple one – there are more tenants requiring a rental property than there are houses and flats to let. As a result, the gazumping phenomenon has moved from sales into the lettings sector. Rival renters have so few properties to choose from that they are willing to increase their offers, engage in a bidding war and gazump the competition in order to secure a tenancy.

Rental gazumping isn’t going away, especially in light of a report by the consultancy Capital Economics, which highlighted how the UK needs almost 230,000 new rental homes every year if the current rate of demand continues.  

Is the highest offer always best?

The nature of renting forces landlords to weigh up far more than just the highest offer. Unlike a property sale, where all ties between the buyer and seller are cut on successful completion, a relationship between a landlord and tenant can last years – and be fraught with difficulties that are completely unrelated to how much rent is being paid. 

A far more holistic approach is needed when matching tenants with properties. In a ‘hot’ rental market, landlords can be picky when it comes to who they choose. Even in a case of gazumping – when a dazzling last-minute offer comes in – due diligence will be undertaken to ensure a landlord isn’t blindsided by pound signs.

Those responsible for gazumping will still be subject to pre-tenancy checks and thorough referencing, which can include:-

  1. Rent payment track record: have they always paid their rent in full and on time in the past?
  2. Job security: are they employed, freelance, newly hired or on a zero-hours contract?
  3. Tenancy length: is the tenant willing to sign up for a long let?
  4. Financial health: has the tenant passed all financial health checks, including proving a good credit score?
  5. Upfront rent: is the tenant able to pay any upfront rent or do they need a guarantor?
  6. References: are the tenant’s past landlord and employment references acceptable?
  7. Speed of signature: how quickly can the tenant sign the agreement and move in?

Landlords will often favour a respectful, reliable tenant who is in secure employment and has impeccable references over a renter with a less favourable background who comes in late with a higher offer.

How to avoid being gazumped

  • Offer as soon as you have viewed the property
  • If your offer is accepted, ask if the rental can be withdrawn from the market
  • Be prepared to sign a tenancy agreement as quickly as you can
  • Offer to move in as soon as possible to reduce any void
  • Supply as many positive references as possible, especially from previous landlords
  • Offer to pay an amount of rent upfront
  • Agree to the landlord’s preferred tenancy length

If you have any questions about gazumping, rental offers or competition in your local lettings market, get in touch with the team today.

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Your options when inheriting a property

Inheriting a property is not an everyday conversation topic, so it comes as no surprise that people have been turning to Google to find out what’s involved. Knowledge gaps were revealed in 2021 when Google Search Trends were analysed. The top eight most searched for property phrases included ‘power of attorney’ and ‘probate’, which had seen a 450% and 100% increase in enquiries, respectively.

Whether your Great Aunt Rose has left you a house in her will or your family home is no longer needed, you may inherit a property at some point in your lifetime. Knowing what to do with it will depend on your own circumstances and if anyone else is involved. Here’s our guide if you find yourself with an unexpected property.

Prepare for probate

It’s a common misconception that if a will was made, the distribution of a deceased person’s assets can go ahead without intervention. In many cases – especially if the property owners were ‘tenants in common’ – a process called probate is needed before the wishes of the will are respected. 

Probate is applied for by the next of kin or the will’s executor and once ‘grant of probate’ is granted, any property owned by the deceased can be dealt with. Generally, only those who were a joint property owner with the deceased – known as joint tenants – can bypass probate.

Are you the sole owner?

Before you make any grand property plans, you need to establish if you are the sole heir to the property or whether you now share ownership with other people, such as siblings. If it’s the latter, the property’s future needs to be a joint decision. If you’re the only beneficiary, you can start moving forwards.

Move in yourself

Inheriting a property may give you an instant accommodation upgrade, especially if you are currently living with family or are in rented accommodation. If the property is empty and it suits your circumstances, there is nothing stopping you moving in as the new owner.

Sell up

Sometimes selling an inherited property is the only option, especially if there are debts in the deceased’s estate, a large inheritance tax bill or if there are multiple new owners who can’t agree on the property’s future. 

Selling an inherited property is one way to benefit from any equity. Remember, if the property is still mortgaged and this sum isn’t settled by a life insurance policy, proceeds from the property’s sale may go towards paying off the home loan. There may also be income tax to pay upon completion.

Become a landlord

One way of retaining an inherited property is to rent it out to tenants. As well as keeping ownership of an asset, there are opportunities to earn an income from the monthly rent and the possibility of long-term price appreciation. You’ll also have the option of moving back into the property in the future, as long as tenants are given the correct amount of notice.

It’s worth noting the tax implications of becoming a landlord. As well as paying income tax on any rental income, you’ll have to pay capital gains tax on any profit you make if you sell the property at a later date. 

Inheriting a buy-to-let

If you’re left a property that has been used as a buy-to-let, the tenant status will dictate what happens next. If tenants are still in place, they have the legal right to stay in the property in line with their legal notice period. 

If the buy-to-let is empty, there is nothing stopping you from selling the property. If it’s inhabited, you’ll have to wait for the renters’ tenancy agreement to end or start the eviction process (if there are qualifying circumstances) before selling up. Alternatively, you could take over as the landlord.

Inherited properties & first-time buyers

The picture is slightly more complicated when a first-time buyer inherits a property. For instance, someone saving for a deposit using a LISA (a lifetime ISA) would automatically become a homeowner if they inherited a property. As a result, they would lose their first-time buyer status by default and have to pay a 25% withdrawal charge before accessing the money in their LISA. 

It’s worth noting that other first-time buyer assistance packages may not apply if a purchaser has inherited a property, such as the Government’s Help to Buy scheme and mortgages specifically created for first-time buyers.

The second property trap & stamp duty

Existing property owners who keep hold of an inherited property will be classed as someone with ‘additional properties’. The same rule even applies to first-time buyers who inherit a property but who have yet to purchase their own home and this has stamp duty ramifications.

First-time buyers who retain an inherited property will no longer qualify for the zero stamp duty on the first £300,000 of their initial property purchase. In addition, all additional home purchases incur an extra 3% on top of basic stamp duty rates, and this applies to everyone who owns more than one property. 

If it looks like you may inherit a property in the future and you’d like to take advice now, please get in touch.

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Tax & VAT watchpoints for landlords in 2022

When Benjamin Franklin said there were only two things certain in life – death and taxes – it probably didn’t occur to him that we’d still be feeling the same way more than 230 years later, especially in the case of landlords.

Paying tax on income is part and parcel of operating in the private rental sector and 2022 is a good year to revisit the tax and VAT watchpoints that landlords – especially those interested in developing property to rent out – need to be mindful of. 

Recent but established changes

The tapering of mortgage interest tax relief is now in full effect and landlords can only offset 20% of their mortgage interest payments against their tax bill. While this has been a detrimental shift, there is good news when it comes to CGT (Capital Gains Tax). The deadline for reporting and paying CGT on the profits of additional properties changed in 2022. Landlords now have 60 days, rather than the previous 30, to report and pay a CGT bill when selling a buy-to-let asset. 

Ones to watch: in consultation

The Government is formally consulting on plans to reform Income Tax Self-Assessment for individuals with income from property or self-employment. It wants to reduce the time that individuals (including landlords) have to notify HMRC of a tax liability, from six months to something much lower – possibly just one month. The Government’s idea has been widely panned in the accountancy sector, so we expect a revision of thinking or clarification later in 2022.

Property investors hoping to capitalise on vacant units on High Streets should bear in mind another Government consultation that has just closed, this time on the matter of SDLT (Stamp Duty Land Tax). Currently, landlords who buy a ground floor shop with a residential flat above pay lower commercial rates of SDLT on the entire purchase. The Government wants the residential portion of such a transaction to be billed at the higher residential rate in the future. The consultation will also rule on how the Government can reduce an increasing number of incorrect MDR (Multiple Dwelling Relief) claims.  

VAT for developer landlords

Property investors looking to pay as little VAT as possible can explore a number of reduced rate options. Although a cautionary approach and professional tax planning advice is recommended, those looking to convert a former commercial building into a residential buy-to-let may be eligible to pay 5% VAT on works to the building, rather than the full 20%. When it comes to developing student rentals, VAT relief can be as low as zero rate if the development meets the right criteria.

A note on holiday lets

Short holidays lets are a simple premise to grasp and with the ‘staycation’ trend set to stick around, it’s no surprise more people than ever are tempted to rent out their home to holiday makers. Any earnings gained from holiday let platforms such as Airbnb are taxable, and the rental income should be declared to HMRC by the landlord via a self-assessment tax return. 

When it comes to VAT, the temporary reduced rate for suppliers of holiday accommodation – including short Airbnb lets – ends on 31st March 2022. The rate will rise from 12.5% to the pre-Covid standard rate of 20% from 1st April 2022.

Want to know more?

If you find the tax or VAT elements of property development and buy-to-let confusing, please get in touch with our team for advice and specialist recommendations.

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Your council tax & property band questions answered

With so much focus on energy bills at the moment, it’s easy to forget the other costs attached to running a property. One unavoidable bill, whether you’re an owner occupier or living in a rented property, is council tax.

Many of our clients ask us property band and council tax questions, so we have answered the most common below:-

Q. What is council tax?
A. People living in properties have been paying money to local authorities or those in charge since the Norman Feudal System in 1066. Today, people living at a domestic address in England have to pay their local council authority a set amount every year – usually paid over the course of 10 months – and this is known as council tax.

Q. What does council tax pay for?
A. Your council tax helps to pay for the services that a local authority supplies, such as refuse collection, street lighting, environmental health, trading standards and libraries, among other day-to-day essentials. Some of the money may also be shared with the emergency services.

Q. Does everyone pay the same amount of council tax?
A. How much a household pays depends on the value of their property. Even now in 2022, the value is based on the price the property would have sold for on the open market on 1st April 1991 in England, and 1st April 2003 in Wales.

Q. What are property bands?
A. Each property is given a letter that puts it into a set property value ‘band’. The bands range from A to H. In England, properties in the A band are worth £40,000 or less, with properties in the H band valued as the most expensive. The full set of bands and more detailed information about them can be found on the Government’s dedicated webpage – How domestic properties are assessed for Council Tax bands

Q. Can I challenge my property band?
A. If you’re not happy with your property’s band, you can ask the Valuation Office Agency to perform a reassessment. You may ask this to be done if you have made your home significantly smaller, for instance. Be aware, however, a reassessment may see your property put into a higher band.

Q. Do I still have to pay council tax if my property is empty?
A. That depends on your circumstances and the local authority’s stance on vacant properties. In some cases, council tax will be suspended after a death or if the property is derelict awaiting refurbishment.

Q. Can I get a discount on my council tax?
A. Some individuals can apply for a council tax discount but each council will have its own criteria. Qualifying characteristics can include: being in receipt of benefits, student status, receiving a low income, having a disability and sole occupancy. Discounts are sometimes granted where a property is empty due a lack of tenants but this is at the discretion of the local authority.

Q. Does a landlord or a tenant pay the council tax bill?
A. This depends whether the property was offered to rent with ‘bills included’. The tenancy agreement will stipulate if the annual council tax is included. If the property is a House in Multiple Occupation, each self-contained unit may receive its own band and, therefore, its own council tax bill. It’s advisable to check with the landlord if there’s an individual or shared bill when budgeting.

If you would like to know more about the band of a property you are interested in moving to and what the annual council tax bill may be, contact us for advice.

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What ‘levelling up’ means for landlords

The Government got February off to an interesting start, with Michael Gove publishing its Levelling Up the United Kingdom white paper. The document sets out how those in charge will give everyone the opportunity to lead more fulfilling lives and flourish, no matter where they live.

So what does the Levelling Up white paper mean for landlords? As well as covering aspects pertaining to health, education, transport, crime and skills, the white paper tackles housing and living standards head on. The document does, however, tread on the toes of the much-delayed Renters’ Reform Bill, whose associated white paper is due for launch in spring 2022.

Detailed in the Levelling Up white paper are 5 key areas that relate directly and indirectly to landlords. We reveal what the Government has set out and what it may actually mean for landlords.

Government: to consult on introducing a legally binding Decent Homes Standard in the private rented sector for the first time 

Landlord impact: as yet, there are very few details on what form the Decent Homes Standard in the private rented sector will take but there is existing guidance in the social landlord sector that we can look to. For instance, in the Government’s A Decent Home document, modern facilities are mentioned – a kitchen of 20 years old or less, a reasonably modern bathroom no more than 30 years old, a reasonable degree of ‘thermal comfort’ and key building components in a good condition. How standards will be measured is not known at this stage.

Government: explore the idea of a National Landlord Register

Landlord impact: changes may see the existing landlord database – a document currently only available to local authority enforcement professionals – made public. As an open database, tenants would be able to search for landlords and see those with a poor track record. Currently, landlords who have received banning orders or multiple civil penalties against them are added to the database. 

Government: bring forward measures to end Section 21 ‘no fault’ evictions

Landlord impact: ‘no fault’ evictions – when a landlord can ask tenants to leave without a reason – are set to be banned. This will affect landlords who want to regain their property to perhaps sell or move back into. At this point, we lack detail on what might replace the Section 21 notice or how the incumbent Section 8 notice could be reformed.

Government: a pledge to regenerate 20 towns and cities by “assembling and remediating brownfield land and working with the private sector to bring about transformational developments combining housing, retail and business in sustainable, walkable, beautiful new neighbourhoods”. 

Landlord impact: regeneration schemes that improve public transport, community facilities and public realm are generally a good thing for landlords. These upgrades can add to an area’s desirability, therefore attracting tenants and allowing for sustainable rents. We wait to see if the housing aspect of the regeneration pledge swings in favour of Build to Rent developments, which may impact the private rental sector.

Government: Making improvements to the home buying and selling process, “working with the industry to ensure the critical information buyers need to know is available digitally wherever possible from trusted and authenticated sources”. 

Landlord impact: this is not the first time that the Government has alluded to digital information during the buying and selling process, and it has hints of the short-lived Home Information Pack (HIP). Anything that simplifies the transactional process should be welcomed by landlords looking to purchase new buy-to-lets, as well as those disposing of assets.

If you would like to read Levelling Up the United Kingdom’s executive summary or the full report, digital copies are available on the Government’s website. For all other matters regarding lettings and property management – and for our opinion on the white paper, get in touch.

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Your guide to damp and mould in rented properties

Winter presents the ‘perfect storm’ of conditions that can trigger episodes of damp, mould and condensation. While it can be concerning to see black patches develop or water running down the walls, many issues are easily fixed. Knowing who is responsible for prevention and treatment in rented properties is the essential place to start, as our guide explains. 

Know what damp you’re dealing with

There are three main types of damp and knowing the difference will establish the course of treatment and by whom. Rising damp is when moisture below a building is drawn up through bricks and mortar, and it’s this moisture that encourages mould growth. A lack of a damp course – or a damp course that’s failing – are the most common reasons for rising damp, and this issue needs resolving by the landlord.

The landlord is also responsible for rectifying penetrating damp, which is a result of failing structures, such as broken guttering or a  leaky downpipe. It’s important to note that while a landlord is responsible for repairs involving rising and penetrating damp, tenants should alert their landlord or managing agent if they notice blocked gutters, peeling wallpaper or bubbling paintwork – especially if it’s occurring on the interior surface of an outside wall.

The third type of damp – ambient damp – is the most common and reducing it is a shared responsibility between the tenant and the landlord. Damp and mould are most frequently caused by condensation – warm, moist air that turns into water droplets when it meets colder surfaces. Many everyday actions produce condensation – from taking a shower and drying wet washing inside, to boiling a kettle and even having a conversation. 

Prevention and cure

If there is a suspicion of rising or penetrating damp, a specialist company may need to be deployed by the landlord to find the root cause and undertake repairs. Cosmetic redecorating will also be the responsibility of the landlord, unless agreed otherwise.

Condensation is a trickier issue as improving insulation standards in let properties can actually contribute to increased condensation, unless well mitigated, as homes are now more airtight with fewer cracks and gaps where air can naturally escape or enter. 

We know asking tenants not to breathe or bathe simply isn’t possible so ventilation is crucial, especially when cooking, showering and drying clothes inside. Windows should be open or kept ajar whenever safely possible to let moist air escape and extractor fans should be installed in rooms susceptible to high humidity – bathrooms, kitchens and utility rooms as a minimum. 

On the note of wet washing, this can be a hard aspect to tackle in flats, especially those without balconies or outside drying options. In these cases, a condensing tumble dryer or a dehumidifier is something to consider.

As well as ventilation, a steady, even temperature throughout a property is a useful tool in the fight against condensation. Avoid letting a property get too cold inside by keeping the central heating on low – warm air of around 18° and warm surfaces are what you ideally need to stop condensation forming. 

Everyday actions to prevent condensation, damp & mould

Small lifestyle tweaks can make a big difference around the home, so here are eight to encourage:

  1.     Keep lids on saucepans when cooking
  2.     Keep the bathroom door shut when bathing
  3.     Open a window in any room where washing is drying
  4.     Wipe condensation off window sills promptly
  5.     Move furniture away from outside walls to improve air circulation
  6.     Boil only enough water required to cut a kettle’s boiling duration
  7.     Air a property on a regular basis by opening as many windows as safely possible
  8.     Use anti-mould and condensation paint when decorating

If you would like more information about mould and damp in lieu of Section 11 of the Landlord and Tenant Act 1985 and the Homes (Fitness for Human Habitation) Act 2018 in England, please contact us today.

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Tenants: in it for the long haul

Despite the common rhetoric that renting is great for flexible living and flighty lifestyles, the latest English Housing Survey (EHS) – which represents the biggest and most representative dataset for the private rented sector – showed that average tenancy lengths are rising.

The average stay in a rented property is now 4.3 years. This is up from 4.1 years detailed in the 2017/18 EHS, and up from 3.9 years in the 2016/17 version of the report. The findings also reveal that tenancy length increases with age. Renters aged 75 and over were found to have an average tenancy length of 17.5 years, which puts their tenure on a par with owner occupiers. Those aged 45 to 64 were found to live in one property for an average of 5.7 years, while those in the 16 to 24 age group stayed the shortest time – an average of 1.3 years.

The figures come at a time when the Government looks set to publish its Renters Reform Bill white paper – a document that seeks to shake up England’s private rental sector in favour of creating secure long-term tenancies. While the white paper mentions lifetime deposits and a ban on Section 21 ‘no fault’ evictions, it stops short of introducing mandatory 3-year tenancies – a move it consulted on in 2017.

That doesn’t mean to say that the notion of long-term tenancies is abandoned or is a bad idea. On the contrary. For many landlords, the thought of a regular tenant is an appealing one, especially if they pay the rent on time and look after the property. There is always the option to set longer tenancies at the start, rather than keep renewing the same tenancy after 6 or 12 months.

Agreeing a tenancy length of 2 or 3 years will reduce the ‘churn’ of renters and eliminate void periods. Longer tenancy lengths can also save landlords money, as there are fewer tenant-find, inventory and check-out costs to pay. In addition, well-managed, long-term tenants are a great way to earn passive income – especially when a property manager takes on the day-to-day running of the tenancy.

Creating a tenancy agreement of more than 12 months does, however, need a well-planned approach. Choosing to have the agreement professionally drawn up and the tenancy managed by an agent is the safest way to ensure everyone enjoys maximum protection. This is especially pertinent for landlords in light of forecast changes to the evictions process, of which we can explain more when you get in touch.

Three essential considerations for long-term tenancies:

  1. Evaluate risks at the referencing stage: when agreeing to a longer tenancy, it is imperative that the very best tenants are placed in the property. Referencing will identify those who have good credit histories and are in secure employment. Crucially, references will reveal if applicants have been model tenants when renting before.
  2. Ask for a break clause to be added to the agreement: if the security of a long term tenant appeals and makes you nervous in equal measure, ensure there is a ‘break clause’ inserted into the tenancy agreement. A break clause gives the landlord, or the tenant, the right to end the tenancy before the fixed-term period ends.
  3. Ensure inspections are carried out regularly: it’s easy to cultivate a false sense of security when you have long-term tenants who pay the rent promptly. Knowing how your buy-to-let is being treated over the years is imperative to protect the property’s value and to catch small niggles before they turn into major problems.

We can help landlords plan for their buy-to-let’s future, advising on the best tenancy duration based on individual aims and circumstances. Get in touch with us today.

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Regulation change regarding carbon monoxide alarms

Tenant wellbeing should be at the top of every landlord’s compliance list and there’s a new gas safety regulation to understand and implement this winter. The change has prompted a number of questions from landlords, which our lettings team have answered:-

Q. How have carbon monoxide alarm rules changed?
A. The Government’s change to gas safety regulations in late 2021 states that all properties in the private rental sector with a fixed gas appliance, such as a gas boiler or fire, now need a carbon monoxide alarm fitted.

Q. Wasn’t that always the case?
A. Previously, the Smoke and Carbon Monoxide Alarm (England) Regulations 2015 made it mandatory for rentals to have a carbon monoxide alarm only where there was a solid fuel appliance, such as a coal fire or wood burning stove.

Q. My buy-to-let doesn’t have a gas appliance – am I affected?
A. If your rental property is all-electric but you’re planning to install a gas appliance, the new regulations have made it compulsory to supply a carbon monoxide alarm at the same time as you fit a new gas appliance. If you rely on solid fuel to heat or power the property, you will still need a carbon monoxide alarm.

Q. If I supply a carbon monoxide alarm, have I fulfilled all of my alarm obligations?
A. Landlords, or their property manager, need to go a little further than merely providing a carbon monoxide alarm. They need to ensure it works at the start of every new tenancy by testing the alarm, and they need to replace a faulty carbon monoxide alarm as soon as a fault is flagged up.

Q. Have the rules changed in regards to smoke alarms?
A. Smoke alarm rules – as set out in the Smoke and Carbon Monoxide Alarm (England) Regulations 2015 and the statutory guidance (Approved Document J) supporting Part J of the Building Regulations – stay the same. Landlords are required to install at least one smoke alarm on every storey of their rental property that is used as living accommodation. Like carbon monoxide alarms, a landlord, or their property manager, needs to test the smoke alarm at the start of every new tenancy and replace a defective alarm as soon as they are alerted to a problem.

Q. Whose job is it to test any alarms?
A. The Government makes it quite clear that a tenant is responsible for testing any carbon monoxide and smoke alarms during the tenancy period, as outlined in the Government’s Smoke & Carbon Monoxide Alarm Q&A Booklet. Tenants are responsible for changing an alarm’s batteries but it should be the landlord that replaces an alarm unit that’s broken.

Q. Where’s the best place to install smoke and carbon monoxide alarms?
A. The best locations for smoke alarms are where air circulates more freely, such as landings, hallways and stairwells. Installing carbon monoxide alarms at head height is best, as long as the alarm is between 1 and 3 metres away from any gas or solid fuel appliance.

Please check with us if you think your buy-to-let property is exempt from any gas safety regulations. We would be happy to advise on the best course of action to keep your let compliant and your tenants safe.

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The over 55 tenant takeover is here

It’s no secret that demand for rental property is rising. The letting industry’s main professional body, ARLA Propertymark, has reported year-on-year growth in the number of new prospective tenants registering per lettings branch during 2021. In its most recent report, it revealed that every month, agents were processing an average of 83 renters hoping to secure a tenancy.

There will be assumptions as to who joins the queue of hopeful tenants: students looking to secure a let for the next academic year; couples and friends renting for the first time; professionals relocating to a new city and young families moving for more space or an extra bedroom.

Many landlords will not think of the queue as being populated by over 55s keen to live the rental lifestyle but analysis conducted over the past two years reveals there is a growing number of affluent, able and active mature tenants.

Not catering for the over 55s is a huge oversight that may be capping the success of a buy-to-let venture. For starters, the number of people turning to tenant status later in life is rising. In 2020, a report showed the upper-middle age and retirement brackets were the fastest growing tenant groups.  

The rise, charted between 2010 and 2020, should prompt landlords to sit up and take notice. The number of privately renting tenants aged between 55 and 64 years old had risen by 118% in the decade, while tenants aged 65 or older had grown by 93% over the same period. The growth isn’t a fad either, with research by the Centre for Ageing Better forecasting that by 2040, a third of people aged over 60 could be living in private rented accommodation.

So why are older tenants taking over the private rental sector? The website Property Reporter highlighted how peaking house prices have started a movement among over 55s to sell up and cash in. Swapping a large personally-owned family home for a landlord-owned rented property not only frees up capital for the ‘golden years’ but if the move is to somewhere smaller or with cheaper running costs, it also makes day-to-day living more affordable. 

As well as having more money to fund a retirement lifestyle, renting is appealing as many of the major maintenance aspects are a burden borne by the landlord and not the tenant – freeing time as well as money.

Time and funds are more important than ever among the over 55s – many of whom are working part-time or are fully retired and in excellent health. Mature renters appreciate the same flexible aspects of renting as Generation Z and Millennials do, such as the ability to try new locations, less responsibility and lower set up costs – no stamp duty or large deposits to pay, for example. 

For others, trading an ‘owned’ property for something rented becomes part of a sensible estate planning exercise, with an inclination to remain in rented accommodation for as long as is feasible. With this in mind, landlords looking for long-term, asset-rich tenants should consider the over 55s a valuable target market. 

Appealing to over 55s may mean tweaking your usual approach to lettings, and you may wish to consider the following:-

Offer long-term tenures

Many over 55s will be embarking on ‘one last move’ or a downsizing exercise, therefore they want long-term security without the hassle of having to uproot every 6 or 12 months. Landlords can trade a tenancy agreement of two, three or even more years with a tenant who should be reliable and respectful.

Don’t assume over 55s are IT illiterate

Mature tenants will look for home tech as much as Millennials, so it pays to offer quality broadband, smart energy meters and connections for cable TV. ‘Kerb-to-couch’ technology is another aspect mentioned by Property Reporter, with keyless entry, app-controlled central heating and lighting operated by voice assistants, such as Alexa, all making life easier in later years.

Be receptive to modifications

Under the 2010 Equality Act, landlords are required by law to make any reasonable adjustments to their properties to allow tenants with disabilities to live safely and comfortably – including older tenants whose mobility has been affected by age. Landlords will need to consider future modifications, such as grab rails, ramps, wider door openings and applying for a priority parking bay.

Consider investing in ‘lock up and leave’ properties

Active retirees may be keen to travel, so renting an apartment in a block – ideally with a concierge and secure parking – will appeal to a wide audience. Security in general tends to be important to older renters, so secure front doors, window locks, porches – and video entry when it comes to flats – will find favour.

Highlight the low-maintenance aspect

One of the redeeming features of rental accommodation is the low maintenance aspect, which particularly interests retirees keen to put major DIY behind them. Properties in maintained blocks also have the advantage of a management company looking after communal gardens, common areas and structure elements, such as the roof.

Please ask us about marketing your property to the widest tenant audience. We’ll advise you on how best to improve your property before it is advertised as ‘to let’ possible, and we’ll manage the tenancy agreement negotiations for the best outcome

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Eco follow-up: Information for Landlords

Unless you’ve been living under a stone for the last month, you’ll know green issues are the number one topic of conversation. While world leaders have debated coal mining and deforestation, there are a number of take-aways from recent weeks for landlords and tenants.

Boilers: in the biggest shake up of how we heat domestic homes in living memory, the Government’s Heat & Building Strategy sets out the end of gas boiler installation. Property investors who develop their own portfolio will be the first to be affected, as the fitting of conventional gas boilers in new properties is to be prohibited from 2025.  

All landlords need to take note of the second deadline. From 2035, the sale of conventional gas boilers will be banned, meaning that if a gas boiler breaks or is condemned in a buy-to-let property from 2035, it cannot be replaced with another gas boiler. Existing gas boilers that work, however, won’t have to be removed.

There is financial assistance available to landlords who would like to make a move away from gas fired central heating sooner than the 2035 deadline. The Clean Heat Grant is launching in April 2022 and landlords can apply for up to £5,000 of financial help to install a heat pump system – the Government’s preferred method of heating rental properties moving forwards. 

The £450 million fund will cover around 90,000 heat pump installations (which currently cost an average of £10,000) but it will be offered on a ‘first come, first served’ basis. We advise those hoping to take advantage of the grant to apply as soon as the initiative is open for applications.  

Funding: a fund worth £4.3 million is going to be shared by local councils in a bid to raise energy standards in the private rental sector.  Some 100,000 extra engagements with landlords will encourage them to comply with current eco regulations and make energy saving improvements – not only to save the environment but also to lower the fuel bills of tenants amid growing fears of fuel poverty. Part of the initiative is to offer landlords free property surveys that will identify where alterations can be made.

Green mortgages: eco-based lending is gaining traction and landlords with the highest EPC ratings now have access to the most favourable interest rate repayments and priority products. It is already reported that the number of ‘green’ buy-to-let mortgages has quadrupled in the past six months, with landlords encouraged to trade energy-saving improvements for advantageous lending conditions.

MEES may get stricter: MEES (Minimum Energy Efficiency Standards) for private rented properties may get tougher in the near future. Landlords need to watch the deadline of 2028, when the Government has proposed that all new, renewing and extending tenancies will need to have an EPC rating of C as a minimum. There’s also an ambitious plan for the eco bar to be raised even further, with the Government’s energy white paper aiming to outlaw new, renewing and extending tenancies that fall below a B from 2030.

If you would like to discuss energy efficiency in a rental property, please don’t hesitate to get in touch.

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Revealed: revised attitudes to the private rental market

The private rental market is an integral rung on the property ladder. For many, it is the first step when leaving the family home or going off to study. For others, it’s a safety net when life’s plan changes direction. Whether it’s a stop gap, a stepping stone or a lifestyle choice, one thing is constant – the need for quality rental accommodation.

A recent buy-to-let report suggested that mood in the buy-to-let market was nothing short of positive, with more than a third of landlords planning to buy a property in the next year, and two thirds feeling confident. Rents are rising, demand is rising and the value of the private rental sector is rising too. With many aspects in the ascendency – and a very different landscape in terms of lifestyles and working arrangements – now is a good time to re-evaluate attitudes to renting.

HMOs & student accommodation

Yields will remain the crucial factor when purchasing a first buy-to-let or expanding a portfolio. Once overlooked for their perceived level of hassle, HMOs (houses in multiple occupation) and student accommodation could be a valid alternative to the default choice of a two-bedroom apartment. Research shows that since 2016, student properties have enjoyed mean gross yields in England of between 6.15% and 6.6%, compared to the overall rental market yield of between 5.43% and 5.6%. Landlords who opt for a professional management service will enjoy a market-leading return with none of the day-to-day administration.

Targeting older tenants

At the other end of the spectrum, landlords could exploit the growing band of tenants that fall outside of the ‘home leaver’ and postgraduate age bracket. The latest English Housing Survey showed there was a generous rise in the number of 35-44 year olds living in privately rented accommodation, as noted between 2009/10 to 2019/20. The results also showed the number of 55-64 year olds with private tenant status has risen from 7% to 10% during the same ten-year period.

Longer terms & fixed rent

Post-pandemic attitudes to living are well documented and may bring about some ‘against the grain’ thinking for both tenants and landlords. While the ability to rent for short periods has always favoured the tenants – and the ability to raise the rent favoured the landlord – both parties may find mutually beneficial ground in the shape of longer tenancy agreements and fixed rents. Indications show the turbulent times of the last 18 months have left more people involved in the private rental sector seeking long-term stability and reassurance.

The ‘doubling-up’ property

Although Propertymark’s latest figures show a 30% decrease in void periods since the start of 2021, having a contingency plan is best practice. New research suggests 17% of landlords said they would look for a future property investment that could double up as a holiday let so they could counteract a void period. As well as a let that attracts holiday makers, some properties can easily double up as serviced accommodation or as an ultra-short-term rental aimed at professionals.

If you are a portfolio investor looking to expand the number of properties you own, or are a first-time landlord requiring advice, we’re here to chat all things yield, return and property management. Get in touch today.

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Student lets leapfrog other property investment prospects

September can only mean one thing – back to school. While the concerns of younger students include pencil cases and packed lunch boxes, undergraduates will be thinking about more serious matters, such as where to live.

Student lets are big business for landlords, even for institutional investors. The Financial Times recently reported on Blackstones – the world’s biggest commercial landlord – offloading offices and retail units so it could bid to buy student housing operator, GCP Student Living.

Even for the humble one-property landlord or investment novice, there are gains to be made in the student let market. A shortage in traditional ‘hall’ accommodation, coupled with the desire to live with like-minded undergraduates in a freer environment, has buoyed the private student rental market.

A recently published student living index found that growing demand was behind student rents increases of almost 20% over the last 12 months. Students in Leicester were most affected, with a £188 rise in their average monthly rental costs.

The ability to increase rents is important when it comes to yields and there is good news for those aiming for the university market. Analysis of 5,000 student lets between January and July 2021 found that yields were climbing steadily, with marked gains in the North East, the North West and the South East. 

Investing in a town where there is a single university has also been proven to be a good strategy, with research revealing 7 out of the top 10 cities for the best student rental yields only had one main university. Swansea came out as the top location, with landlords enjoying student yields of +9.56%, followed by Hull (+8.68%) and Sheffield (+7.58%).  

If your head has been turned by the attractive student let market, here’s some advice about appealing to undergraduates:- 

 

  • Operate compliantly

 

If you’re hoping to run a house share, also known as an HMO (House in Multiple Occupation), you’ll need to check with the local authority about a license to operate and also familiarise yourself with the extra compliance required when renting to multiple households.

 

  • Consider fully furnished

 

Students like fully furnished properties so they can move in with just the basics. Budget for buying furniture and ensure anything you purchase second hand, or are given meets fire safety regulations. When offering a fully furnished student let, an inventory will be especially important. 

  •  Minimise financial risks

Don’t hesitate to ask for a parental guarantor or a whole year’s rent upfront. This is quite normal in the student let market, giving landlords a greater degree of financial security and less chance of arrears.

 

  • Offer brilliant broadband

 

With many lectures remaining online, reliable and fast broadband is on the top of every students’ housing wish list. Installing the very best WiFi could be part of a ‘bills included’ package, should you choose to follow this path.

 

  • Students are driven by location 

 

Think about the property’s location when looking to purchase a student buy-to-let. The holy trinity of places to be close to include the university campus, shopping facilities and any social centre – walking distance is preferred as students will not necessarily drive or own a car.

 

  • Don’t hesitate in marketing

 

It’s never too early to market your student let. Competition for the best properties can be fierce and as a result, many students will look for a place to live in the autumn, ready for the following academic year.

We are well versed in helping landlords get ready for the student market. If you would like advice on compliance and HMOs, setting the rent, how to operate a ‘bills included’ let, working out yields, how to find tenants and managing a student let with the minimum of fuss, talk to us today.

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How to rent your home and everything in it!

Carrie Symonds, now Carrie Johnson after her wedding to the Prime Minister, often makes news headlines but one of her latest front page stories was an altogether more sustainable – and less salacious – affair. 

Many were surprised to learn that her wedding dress cost a mere £45! The catch? It was rented for a couple of days, representing an estimated saving of £2,825. While renting a property would not gain similar headlines, the act of an affluent couple hiring a wedding dress does.

Let’s look at the notion of renting in a little more detail. It represents a cheaper way to enjoy something that may be too expensive to buy outright. Wedding dresses fall into the same category as cars – pay a more affordable price to enjoy the pleasure for a limited amount of time. Hand the item back and move on, or rent again for a different experience.

It’s the same when it comes to property. Renting gives tenants freedom and flexibility, with tenancy agreements of 6 or 12 months allowing people to move on with ease and very few ties. In addition, setting up a rental agreement is also far cheaper than buying a property – there is no stamp duty to pay and the deposit is capped at a fraction of the price needed to secure a mortgage.

So if you’re renting your property, why stop there? We take a look at what other items you can rent as a tenant. Whether it’s haute couture clothes, the latest tech or the must-have interior design trends, renting instead of buying has an added ethical bonus too – it stops items heading for landfill when they fall out of fashion. Here are four to try:-

  1.     Gadget & appliances: if you lived in the 1980s, you may have popped into Radio Rentals to pay your monthly fee for a new fandangle VHS player. While the brand has disappeared from the High Street along with video tapes, it is still possible to hire the latest home tech and appliances – a wise option if you’re always looking to upgrade. Hughes Rental, among others, rents out Sonos sound systems, 65” TVs, white goods and laptops.
  2.     Art: if your money doesn’t stretch to buying a masterpiece, why not rent a painting, rare print or an iconic photo instead? The rentals at Rise Art start from £25 a month, and represent a risk free way of adorning your walls. 
  3.     Furniture: Roomservice by Court is just one company that offers furniture packs specifically for hire by tenants. Ideal for unfurnished properties or short lets, an entire property can be kitted out without the need to buy – even down to the bed linen. Renting also removes removal costs, as the furniture is delivered and collected by the rental company.
  4.     Clothes: Carrie Johnson’s wedding dress was rented from My Wardrobe HQ, which operates a clothes, shoes and accessories rental service online and from within Harrods. You can fill your rented wardrobes with rented designer fashions from as little as £4 a day, ensuring you’re always sporting the latest styles.

If you’re looking for help with your next rental property, feel free to ask us for advice and a list of available properties.

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Can I sell my buy-to-let with tenants in place?

One of the biggest perks about renting a property is the flexibility, with standard tenancy agreements of 6 or 12 months giving both the tenant and landlord the ability to alter their plans in the short term, should there be a change in circumstances.

Not every renter, however, is in the habit of chopping and changing where they live. There is a growing demand for longer tenancy lengths, with some landlords already offering tenures of two and three years. In fact, the Government would like three-year tenancy models to become the standard so renters can feel secure enough to put down roots. 

While signing tenants up for more than 12 months sounds like a good way to guarantee rental income, what happens if the landlord needs to sell their property? And what’s the approach for those with tenants signed up for a year? We look at how landlords can regain possession of a property, sell a buy-to-let property with tenants in place and, crucially, the timings and circumstances landlords need to be mindful of.

Selling with an assured short-term tenancy (AST)

Landlords can’t decide to just sell up overnight, unless their property is in vacant possession (ie, empty). Fixed-term tenants on an AST have the right to stay in their property until their tenancy ends and even then, they will need to be issued a Section 21 notice as an official way of being asked to leave. Therefore, agreeing to a term beyond 12 months needs careful consideration.

Landlords wanting to regain possession of their property also have to follow a set procedure and timeline set out by the Government. If the tenants are on a fixed-term agreement, a Section 21 notice cannot be issued during the first four months of the tenancy or before the fixed term has ended. A Section 21 notice can, however, be served at any time if the tenancy is on a rolling periodic basis with no fixed end date. If tenants want to stay on after their fixed period is over, a rolling tenancy is a good option for landlords wanting to keep their selling options open. In both cases, tenants usually receive two months’ notice of an intention to regain possession but check with us first as Covid has altered some tenants’ rights.

It is sometimes possible to regain a rental property with a view to selling before the fixed period ends but there has to be special circumstances – usually instances where the tenant has broken the terms of their tenancy agreement or the law, enabling a Section 8 notice to be served. In these extreme cases, possession can be as quick as two to four weeks.

Using break clauses

Inserting a break clause into a tenancy agreement may allow landlords to end a contract early. For instance, if the fixed period is for 12 or 24 months with a 6 month break clause, the landlord can start the process to regain their property after 6 months. If you’re starting a buy-to-let journey, ask us about adding a break clause to your tenancy agreement for maximum flexibility.

If introduced, it is hoped the Government’s three-year tenancy agreements will contain a mandatory 6 month break clause, with extra options for landlords to regain their property if they have ‘reasonable grounds’ and provided a minimum of two months’ notice.

Selling a property with tenants in place

If the tenants are happy where they are living and the landlord doesn’t want to go through the eviction notice process – or needs to sell before a fixed term ends – it is possible to sell the buy-to-let with tenants in place. It is highly likely that the buyer will be a fellow landlord looking for ready-made rental income.

Sitting tenants

It’s worth noting that sitting tenants (sometimes referred to as tenants in situ) are renters who entered into a tenancy before 1989 and have stayed in the same property throughout. This tenant group has extra rights on top of AST renters who have only been in a property for 10 months, for instance. Sitting tenants retain the right to reside in a property that’s being sold under the Rent Act 1977, so landlords in these cases will need expert lettings guidance.

If you are a buy-to-let landlord and are considering your position in the market, talk to us about your options.

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Your first shop when you move out

For many, deciding to make it on your own in the big wide world involves flying the family nest to move into a rented property. While your mind may be preoccupied with houseplants, accessories and the friends you’ll invite over, there are more mundane matters that could catch you out.

If your first night involves a take-away and a bottle of wine that your new neighbours gifted you, you may wake up the next morning to bare cupboards and an awareness of what you took for granted when living in the family home. There was always loo roll, a fridge full of food and a packet of paracetamol when you needed them most. 

Moving out to a rented property for the first time? Here’s our guide to your first shop.

Make a list

Lists aren’t just for forgetful people. There will be so much to think about during your first few days of being on your own that an inaugural shop could turn into a disaster if you are not prepared. If you’re feeling stressed at the thought of a supermarket visit, why not register for online shopping and check out a basket of essentials to be delivered directly to your new home?

The obvious

Of course, food will be at the top of your list. Make sure you think about fresh food, frozen food and non-perishables like tins, jars and pasta. Having store cupboard basics will allow you to rustle up something edible even if everything in your fridge goes off.

It’s also wise to shop for the not so obvious items. Here are our recommendations:-

Health & safety

Think about buying a first aid kit – which are available ready-assembled from chemists and stores such as Boots – as well as painkillers, antibacterial hand gel and a pack of plasters. Heat/ice packs are also handy for sprains and injuries. 

Unless you are renting a room in a house share, your landlord may not provide a fire extinguisher, so it’s sensible to buy your own. A fire blanket to keep in the kitchen and a fireproof safe for valuables and essential documents are two other considerations. A torch (a wind-up one is most useful), matches and candles may sound like you’re buying for an expedition but they will prove vital during a power cut.

Essential DIY/maintenance items

Minor household tasks are the responsibility of the tenant and you can’t call your landlord out to unblock your sink. You’ll probably find it handy to have a multi-function screwdriver with both flat and Phillips heads, a tape measure, a stock of light bulbs (preferably low energy), a variety of batteries (AA and AAA are most commonly used), a set of steps, fuses for plugs and some sink unblocker.

Spares

A good mantra is always ‘one in use, one in the cupboard’ – this avoids someone running out of washing up liquid as they’re about to tackle a mountain of dishes, or an unplanned dash to the petrol station in your PJs. Make use of ‘buy one, get one free’ offers and stock up on essentials like toothpaste, shower gel, washing powder, loo roll and hand soap to avoid tricky situations.

Odds & ends

It’s always handy to have a small sewing kit with safety pins, spare USB cables and chargers, a dustpan and brush, postal stamps, envelopes, a notepad, pens, sellotape, black bin bags and scissors in your household kit. These may not feel like glamorous purchases but you’ll feel smug the day you come to use them.

If you are planning your first fledgling flight from the family nest and would like to see what rental properties are available in your area, get in touch today.

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Landlords: how to expand your buy-to-let portfolio in 2021

The intention to invest in property looks as strong as ever and while there are signs that new landlords are hoping to enter the market, there is also mounting evidence to suggest existing investors are looking to grow their buy-to-let portfolios in 2021.

When 900 landlords were questioned about their future plans by one specialist mortgage lender, the results showed 19% of respondents intended to purchase additional buy-to-lets in the coming 12 months.  

Those already managing larger portfolios were found to be the keenest to buy extra investment properties, with 31% of those with eleven to nineteen properties harbouring expansion plans. Additionally, 28% of those who manage twenty or more buy-to-lets intend to increase the number of investment properties they have.

Ways to expand your buy-to-let portfolio:

If you are an existing landlord with plans to purchase more buy-to-let properties, you may like to consider the following options:

  • Buy a property with sitting tenants already in place: also known as ‘tenants in situ’, sitting tenants are long–term residents and it’s quite common for a landlord to sell a property with renters as part of the package. Homes with sitting tenants tend to appeal to experienced landlords so if you’ve already got a portfolio, you may like to add a ‘ready made’ let to your collection. As a note of caution, some mortgage lenders will not loan on properties with sitting tenants, so seek financial advice.
  • Remortgage to release equity: if you want to add to your buy-to-let portfolio and have equity in your existing properties, remortgaging can free up cash to use as a deposit on a new investment property. There are specialist lenders who look after portfolio landlords who own 10 properties or more, and they can advise on matters of first and second-charge lending.
  • Take out a loan: if an unmissable opportunity presents itself and you want to add it to your portfolio, a loan may be the quickest way to finance a purchase. Both personal and bridging loans are available but investors will need to scrutinise the interest rates and repayment terms to ensure the numbers stack up.
  • Draw down on your pension: did you know that over 55s can withdraw some or all of their pension pot? You’ll have to weigh up the tax implications and how this may affect your future income but drawing down is one way to access a lump sum of money that can be used as a buy-to-let deposit. 
  • Find a property investment partner: if you have some but not all of the money required to make an additional buy-to-let purchase, you might consider finding a friend or family member to join you in your next venture. We can advise you on the purchasing side of any arrangement, such as joint tenancy versus tenancy in common, and a mortgage broker will talk you through joint financing strategies.

If you would like any lettings, property management or buy-to-let purchasing advice, please contact our team today.

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Can I move my partner into a rental property?

You’ve moved out of the family home, bagged yourself a lovely flat to rent and have also found yourself a partner. We know it’s only natural to start thinking about living together if your relationship is blossoming but it’s not a case of simply adding another toothbrush to your bathroom when you rent privately. Here’s our advice to tenants who are thinking of moving a partner in with them.

Check your tenancy agreement

If you signed your tenancy agreement on a ‘single occupancy’ basis, the legal document will only allow you to live there as the named tenant. If you move someone else in who is not specified in the agreement, it is classed as subletting. This is usually prohibited and a reason for a landlord to take legal action against a tenant. 

So, I can’t move a partner in?

Even if your tenancy agreement is single occupancy, it doesn’t mean living with your partner in the property is off the cards. Your first step will be to contact your letting agent or landlord, telling them that you would like to move someone in. 

Ask them for permission first and if agreed, your agent can draw up a new tenancy agreement with both of you as named tenants in what is known as ‘double occupancy’. Be aware, however, that changes to an incumbent tenancy agreement are one of the few things an agent or landlord can still charge a tenant for.

Is that it?

It is highly likely that your partner will have to undergo the same referencing process as you, as the original tenant. If they fail to meet the necessary standards, residency for your partner may be refused. It could also be the case that your landlord will want to make a small rent increase, as an extra person in the property will lead to more wear and tear, and raise the prospect of damage. 

If you’re already living with other people and want to move your partner in, an unrelated, extra person living under the same roof may tip the property into the HMO category (a house in multiple occupation). In this case, the landlord may need to apply for a specific HMO licence to operate legally and be required to make changes to the property to meet compliance standards. If this is the case, the landlord may refuse the request.

What happens if I split up with my partner?

If you are each named on the tenancy agreement, both want to move out and are close to the end of the tenancy agreement, you can give ‘notice to quit’ and vacate the property at the end of the rental term. If your tenancy agreement has some time to run, you can ‘surrender your tenancy’ by asking your landlord to terminate the agreement early – but they do not have to agree to this. 

You’ll share responsibility for paying the rent and the property’s condition while you’re both named on the tenancy agreement, even if your partner moves out. It’s therefore important to request a change back to a single occupancy agreement if only one person wishes to stay in the property. If whoever stays is not on the tenancy agreement, they may not benefit from full tenant protection. 

Need further information?

If you’re in any doubt about the type of tenancy agreement you have signed, or are thinking about moving a partner in, please contact us for advice.

 

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Should your buy-to-let be ‘bills included’?

When Zoopla set out to establish the 10 most desired features renters are looking for, all the expected answers were given – gardens, parking and pets allowed – but there was one request, however, that may prove more surprising to landlords.

When the property portal analysed the most common search terms used by home hunters between July and September 2020, it found ‘bills included’ was high up on the moving wish list – taking seventh spot ahead of the search terms en-suite bathroom, rural setting and studio.

The majority of available buy-to-lets don’t include the cost of utilities within the monthly rent, although there are exceptions. Student house shares, professional HMOs and dedicated build-to-rent properties that form part of a larger development are more likely to be offered with at least broadband costs included.

Zoopla’s results present a question: should more rental properties be offered with ‘bills included’? Here we offer our thoughts on the proposition.

 

  • It’s not a profit-making exercise

 

Landlords should use ‘bills included’ as a way of attracting tenant interest and not making money. In fact, landlords can only recharge for the units of energy used, a standing charge and any VAT. This is called the ‘maximum resale price’ and a landlord can’t charge any more than this.

 

  • Appealing to budget conscious tenants

 

Many renters like the convenience of one monthly fee covering not only their accommodation but also their gas, electricity, water, landline rental, TV service and broadband too. The flip side is some tenants prefer to shop around and switch suppliers on a regular basis for the cheapest deal. That’s an aspect out of a renter’s control when bills are included.

 

  • Leave time to look for the best deals…..  

 

On a ‘bills included’ basis, the job of finding the most economical deals – and swapping to different products when fixed rates end – falls to the landlord. It takes time to keep comparing the energy market but it’s vital to ensure you’re not paying too much, as high costs can result in above-average (and off putting) rents.

 

  • ….and monitor usage regularly

 

Landlords need to keep on top of their tenant’s gas, electricity and water (if metered) usage to ensure they’re not out of pocket and that means lots of meter reading. It is possible to tailor a tenancy agreement to include set usage restrictions, with a stipulation that anything used over the limit will be charged as an extra. In reverse, landlords can also incentivise tenants to use less with a cash-back offer.

 

  • Cap it to control costs

 

Offering ‘bills included’ needs to be cost-effective and controlled, so landlords should look at capping expenditure to ensure tenants don’t take advantage. There is an element of trust involved, although smart meters are a good way of reminding renters how much gas and electricity they’re using. 

Prepayment sub-meters, where the credit is loaded by the landlord, are a more serious way of keeping usage under control, although smart heating controls are an easier alternative. These allow a landlord to set maximum heating temperatures and time limits in a remote capacity. 

In terms of broadband, ‘phone costs and line rental, landlords can discuss spend caps and unlimited deals with suppliers, which will help them budget and set an appropriate level of rent.

 

  • Go green for extra savings

 

All rental properties need to be energy efficient by law but going above and beyond the minimum EPC rating of E will help reduce utility costs and save a landlord offering ‘bills included’ money in the long run. The caveat is a possible short-term investment in eco improvements – an outlay that needs balancing with how ‘bills included’ will impact ease of letting. 

If you are a first-time landlord or are looking to expand your buy-to-let portfolio, ask us for advice and a local lettings market report.