Categories
Sales Group 2

5 value-adding ideas to help achieve your asking price

While it’s universally accepted that, in many circumstances, the price we pay is the price we see – in supermarkets and restaurants for example – there are a couple of instances where a little haggling is to be expected.

Buying a property is one of them. After all, estate agencies are staffed with skilled negotiators and the clue is in the name. Even in the strongest selling market, buyers may offer a figure below the asking price, hoping the seller will say yes in order to secure a sale.

As a guide, we traditionally see buyers offering up to around 5% less than the asking price on their first bid. The longer a property is on the market, the more likely an offer will be 10% under what the property is marketed for. There’s even such a thing as a ‘lowball’ offer – a figure that’s 25% or more below the asking price, but this is highly unusual.

As experienced agents, we understand your need to achieve as close to the asking price as possible but what happens if you come across a buyer who drives a hard bargain? A keen purchaser who repeatedly submits low offers shouldn’t always be dismissed.

They may be an excellent prospect in terms of their circumstances – perhaps a cash buyer, someone with no chain behind them or a purchaser who can offer a quick exchange – and we’re here to help you weigh up a person’s situation versus their offer.

If low offers persist but you are worried you may lose the interest of potential purchasers, there are ways to keep buyers engaged without budging on your asking price. It all comes down to adding extra value.

Here are 5 value-adding ideas to explore:

  1. Sell with planning permission already granted: the cost of submitting a full planning permission application for alterations/extensions to a single dwelling house or a flat is £206 but it could add as much as 10% to your home’s value.
  2. Leave behind high-value items, such as white goods: fridge freezers, ovens and even furniture can all be used as bartering tools. If this approach appeals to your buyer, ensure negotiations are conducted through the solicitors using the TA10 contents and fixtures form.
  3. Be flexible with the completion date: value can’t always be measured in monetary terms, so being in a position to exchange and complete at speed will be an advantageous trade-off tool among buyers who are in a hurry.
  4. Offering to rectify flaws found in the survey: one of the most common reasons for a low offer is unfavourable survey results. Offering to pay for issues such as damp is a cost but it could allow you to stick to your asking price – a critical point when funding an onward purchase.
  5. Throw in extras: there’s definitely something in the concept of buying a lifestyle so if your purchaser has fallen in love with your home, they may be persuaded to up their asking price if you include accessories such as lamp shades, curtains and rugs.

If you are hoping to come to market this spring, why not start with one of our free valuations? We will suggest an achievable asking price and advise on ways that you can add value to your home. Contact us to get started.

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Sales Group 1

Keep buyers engaged and stick to your asking price

As experienced estate agents, we pride ourselves on providing realistic and achievable valuations that take into account local demand, the wider property market and the circumstances of our clients.

Despite our accuracy, what we can’t control are the offers potential purchasers will make. Please don’t be offended at the price some people suggest as it’s almost an unwritten rule that a buyer’s opening gambit can be well below the advertised price. 

We are actually obliged by law to pass on, in writing, all offers that are made on your property within 24 hours. If you’d rather not see a raft of ‘cheeky’ offers from speculative chancers, we can write it into your terms and conditions that we should only pass on offers that are above a pre-agreed value.

Sometimes there is a niggling discrepancy between the asking price and the submitted figures but don’t fret. We are adept at weeding out the time wasters from the buyers who have the potential to make the best offers. We also have the following advice:

Hold your nerve

You may be excited to receive an offer on your property – and perhaps even feel pressured to accept it – but in a good market such as we’re experiencing now, there should be multiple offers. With the support of our skilled negotiators, you can agree the very best offer for your personal circumstances.

Our team will balance all the buyers who are interested in your property with the feedback from viewings and the likelihood of a bidding war. Low offers can quickly be upgraded if there’s competition and we’ll minimise the risk of losing a sale.

Extras extras….read all about it

While intrinsic value lies with bricks and mortar, what’s inside your home can also help achieve your asking price. As the seller, you’re entitled to take as many fittings, fixtures and items inside your home with you as you like, leaving the new owner to replace whatever you remove. 

While we don’t suggest stripping your property bare, the cost of white goods, curtains, accessories and freestanding furniture soon adds up. It may be that you can strike a deal with a buyer, asking them to offer as close to the asking price as possible in return for leaving high-value or convenient items behind. Don’t forget to confirm any such arrangement using the legally-binding TA10 contents and fixtures form.

Plan ahead for project-hunters

Many buyers are looking for a project but they’ll place more value on a home they know they can definitely alter, rather than make an offer on a property where the potential to remodel, extend or convert is unclear. 

Listing your home with ‘planning permission granted’ is a winner. It can cost as little as £206 to submit a full planning permission application for alterations/extensions to a single dwelling house or a flat but it could add as much as 10% to your home’s value. Commission an artist’s impression or computer generated image of what’s possible for extra appeal. 

Offer valuable assets that aren’t tangible

If your asking price is non-negotiable but you need some stimulus that will keep buyers engaged and interested, you may have to think more laterally. Buyers can be encouraged to make their best offer when sellers present a set of favourable moving conditions. 

If sellers can make themselves the top of the chain – perhaps by moving into rented accommodation – value can be added by simplifying the transaction. If you can be flexible on the completion date, you’ll also find favour. Even committing to a really quick exchange will give you leverage when negotiating on the asking price. 

Sort survey setbacks

It’s a common situation: the survey is back and it reveals a few issues that will cost money to rectify. The buyer has obtained quotes for the works and wants to knock the equivalent amount off of their offer. 

Sounds fair but we understand many sellers need to achieve a predetermined sales price in order to fund their next step. When the asking price, personal circumstances and finances are intertwined, it can be advantageous for the seller to get the work done themselves so the offer price remains unchanged.

Contact us to start your sale

When the asking price really matters, we will create an achievable valuation, prequalify buyers so only the most genuine proceed and help you through the negotiations process. Get in touch for more advice.

Categories
Lettings Group 2

Taxing matters for landlords in 2022

‘Tax doesn’t have to be taxing’ is a favourite slogan of HM Revenue & Customs and it’s true! For many people, paying tax and working out VAT is an aspect of our daily lives that someone else works out on our behalf.

If you’re a landlord or property developer, however, you are classified as a business owner who is responsible for their own tax bill and possibly VAT too. While a good accountant is vital when it comes to filing returns and reducing bills, understanding the relationship between tax, VAT and property before you invest and during a tenancy is key to healthy yields and profits.

This year will see landlords settle into a new tax and VAT pattern, and while we can’t predict what the Chancellor may introduce later in 2022, here are 6 things we do know:

Mortgage interest tax relief changes are in full effect
The tapering of mortgage interest tax relief is complete and from now on, landlords filling in their self-assessment tax return will only be able to offset 20% of their mortgage interest payments against their tax bill.

There’s more time to report & pay CGT
When a landlord sells a buy-to-let property, there is usually CGT (Capital Gains Tax) to pay. This year has already heralded a positive change to how landlords report profits gained from selling additional properties and how long they have to pay the CGT bill. The timeframe has been extended to 60 days, up from the previous 30.

The tax liability notification period may shorten
The Government is keen to boost its coffers and it is consulting on an Income Tax Self-Assessment reform, which would prompt landlords to pay taxes due more quickly. At present, landlords have six months to notify HMRC of a tax liability if they’re making money from additional properties but this timeframe may be reduced to something much shorter, possibly one month.

Stamp duty may rise for mixed-tenure purchases
Property investors with one eye on the High Street should plan for a possible SDLT (Stamp Duty Land Tax) hike. The Government wants to change how mixed-tenure purchases – such as a ground floor retail unit with a residential flat above, sold as one transaction – are taxed. Currently, purchasers pay lower commercial rates of SDLT on the entire purchase but the proposed change would see the residential part taxed at the higher residential rate.

5% VAT for developer landlords is available
Landlords who engage in development and conversion work before they let out a property still have access to more flattering rates of VAT. Building work to change a commercial premises into a residential buy-to-let home may attract 5% VAT, while developing student accommodation could see VAT reduced to zero in some cases.

Reduced VAT rates for providers of holiday accommodation ends soon
One of the Government’s pandemic rescue packages saw suppliers of holiday accommodation – including short Airbnb lets – pay a reduced rate of VAT but this benefit ends on 31st March 2022. As of 1st April 2022, the VAT rate will rise from 12.5% to the pre-pandemic standard rate of 20%.

Still find tax taxing?
As buy-to-let and property specialists, we can advise on all matters of lettings, including tax and VAT. Get in touch and we can help you find financial efficiencies and run profitable property investment portfolios.

Categories
Lettings Group 1

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.

Categories
Sales Group 1

Don’t forget your toothbrush holder: the TA10 form explained

There are a multitude of acronyms and abbreviations to get your head around when buying or selling a property. Something you may see in your pile of paperwork are forms with the letters TA at the start.

The TA stands for transaction and these letters come in the form of templates drafted by The Law Society. They are sent out by conveyancing solicitors and estate agents to those involved in the moving process, and one form that every seller will be asked to complete is a TA10.

More commonly known as a ‘fittings and fixtures’ or ‘fittings and contents’ form, a TA10 is completed by the seller so they can clearly identify what’s included in the sale and what is going to be removed. 

A TA10 form is largely a tick-box exercise. Once you have filled in details about yourself, your solicitor and your property’s location, the most common fittings are presented as a list with boxes by their side. The seller simply ticks ‘included’ if it’s being left at the property, ‘excluded’ if it’s being taken with them and ‘none’ if the item listed is not relevant to their property. 

It’s completely natural to think of fittings and contents as items such as integrated storage, kitchen appliances and built-in furniture. When it comes to a TA10 form, however, even the smallest and sometimes most unconventional of details needs consideration. Be prepared to weigh up whether you’re going to leave your toothbrush holder, loft insulation, dustbins and even your doorbell. Yes, these are all listed on The Law Society’s TA10 template form.

The latter item – the humble doorbell – is actually part of a wider conversation within conveyancing. The Law Society is currently holding a consultation with solicitors on the matter of smart products and connected appliances – items that are increasingly being fitted to homes. These can include smart doorbells, wifi-enabled CCTV and app-controlled central heating systems.

The current TA10 template doesn’t have a smart device section and this may not appear until after The Law Society’s consultation ends on 28th February 2022. Until changes are made, sellers should use the ‘other items’ section at the end of the TA10 form to list any smart devices, being clear on what’s being taken and what is being left. If it’s the latter, the seller should detail how the new occupant can access the service and take over any subscriptions. 

There are also boxes for ‘price’ and ‘comments’ against each item on the TA10 form. It is here where a seller can let the buyer know what items are for sale, for how much and if there are any related notes. 

Negotiations to purchase items are usually conducted between the buyer and seller directly, or we can mediate, if that’s preferred. It is sometimes possible for the solicitors to negotiate the sale of any items but there may be an additional charge for this service. If a price is agreed and an item is to be bought, both solicitors need informing.

As with all paperwork relating to a property sale or purchase, speed is of the essence if you want to complete without delays. If you are a seller, fill out and return your TA10 form to your solicitor promptly. If you are the buyer, ensure you read through the form upon receipt, flagging up any questions and requests to purchase as soon as you can. We’re here to offer guidance, so get in touch with any TA10 form questions. 

Categories
Sales Group 2

7 things sellers should know about a TA10 form

Almost every estate agent can tell a story about buyers moving into a property that isn’t handed over how they assumed. From gardens being stripped of plants to every light bulb being unscrewed, tales like this reinforce how important a TA10 form is in the buying and selling process.

If you are moving and don’t want any unexpected surprises, here are 7 things you should know about the TA10 form.

1. The TA10 has a more friendly name
TA10 is the name given to a form issued by The Law Society. It’s part of a wider set of templates used by solicitors during the conveyancing process. A TA10 is more commonly known as a ‘fittings and contents’ or ‘fittings and fixtures’ form. It’s filled out by the seller and sent to the buyer via the solicitors.

2. The form is legally binding
Honesty is definitely the best policy for sellers filling in their TA10 form. It is a legally binding document and may become part of your sales contract. If a seller removes items that were described as included on the TA10 form, the buyer is within their rights to make a legal claim against the seller in the future.

3. You can take…or leave…almost whatever you want
It is up to the seller to decide what is left behind and what is removed – after all, they usually own everything within the property and its grounds. Fixtures and fittings that could be removed include the obvious – white goods, bathroom cabinets and curtains – but the TA10 form will ask sellers if they’re planning on removing boilers, radiators, door fittings and electric sockets, for example – all classed as ‘basic fittings’. It is uncommon and unwise, however, for a seller to rip out a property’s fundamentals.

4. Rubbish must go
One thing a seller must not leave behind is rubbish. All refuse and recycling should be removed from the property before move out day, including anything that has accumulated in lofts, gardens, outbuildings, garages and sheds. The property should also be left in a ‘reasonably’ clean and tidy condition.

5. Leave a light bulb
Arriving at your new home to discover all the light bulbs have been removed may sound petty but it happens. The Law Society’s TA10 template does state that ‘if the seller removes a light fitting, it is assumed that the seller will replace the fitting with a ceiling rose, a flex, bulb holder and bulb, and that they will be left in a safe condition.’

6. Smart devices need special attention
If you have a Ring doorbell, a Nest wireless central heating control, a smart energy meter or a wifi-connected security system, take note. Smart devices could become a bone of contention if the buyer has seen them during a viewing and assumes they’re included in the sale. Although there is no current section on the TA10 form devoted to smart devices, there is an ‘other items’ section where these can be listed and noted as ‘included’ or ‘not included’.

7. You can use your TA10 to sell items
As well as ‘included’ and ‘not included’, another option on the TA10 form is ‘price’. This is useful if you’re not happy to leave behind a very expensive American fridge freezer but realise it won’t fit into your new property. By writing a figure in the price box, you are disclosing your willingness to sell it to the buyer.

If your purchaser is interested, they have three options. They can conduct negotiations directly with you, go through your estate agent or contact your solicitor – although the latter may incur extra charges. Any agreements to sell items should be communicated to both solicitors involved, especially if agreed privately.

If you need help filling out your TA10 form – or any other document pertaining to your house move – give us a call.

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Lettings Group 2 Sales Group 2

A guide to council tax & property bands

The way we buy and sell homes is forever changing but some things stay the same. The property ‘bands’ that were set more than 30 years ago in 1991 are still used when calculating today’s council tax charges. Expressed as a letter, with A being the least valuable property and H being the most expensive, these bands dictate how much council tax a household should pay.

If you are curious about your property’s band, want to know if it can be changed or whether the bands will alter in the future, read on for our guide to council tax and property bands.

Today’s bands
Let’s start with a little background. Each local authority is free to set their own council tax but they do, in fact, all work to the same set of property bands, as follows:-

A: up to £40,000
B: £40,001 to £52,000
C: £52,001 to £68,000
D: £68,001 to £88,000
E: £88,001 to £120,000
F: £120,001 to £160,000
G: £160,001 to £320,000
H: more than £320,000

When you move into a property, whether owned or rented, it usually falls to the occupant to pay the council tax bill. The money collected by the local authority pays for vital services, such as refuse and rubbish collection, street lighting, emergency services and community assets, such as libraries.

You could be in the wrong band
The job of valuing properties before the council tax’s launch in 1991 was very rushed. In some cases, those responsible for providing the figures simply drove past rows of houses, assigning each property the same band without detailed examination.

The financial commentator, Martin Lewis, estimates that thousands of homes were incorrectly banded and it is possible for occupiers to challenge the band they were given. This process is managed by the Government’s Valuation Office Agency and it can present a successful way of re-banding your property and reducing your council tax bill.

If you are thinking of asking for a band reassessment, be aware of the pitfalls. Quite simply, the Valuation Office Agency may think you aren’t paying enough council tax and your new banding may make your council tax bill more expensive. Alternatively, your band may remain the same.

A new garden room may have an impact
If the recent ‘race for space’ and a greater appreciation of your garden prompted you to add an annexe or a fully habitable outdoor room, this may be taken into account when a band is recalculated.

If the Valuation Office Agency deem your outdoor room to have been ‘constructed or adapted for use as separate living accommodation,’ they are obliged to give it its own property band and, therefore, its own annual bill. It’s worth noting that the use of an annexe or garden room is not taken into account. Instead, an assessor will look at its physical features, such as provisions for cooking, sleeping and washing.

The good news is the ‘Granny Annexe Tax’ was abolished in 2014. This spelt the end for two full-price separate council tax bills – one for the main residence and one for the annexe. Now, at the discretion of the local authority, it’s more likely that a 50% reduction in council tax is applied to the annexe.

There’s no plan to reassess every property
With bands that were generated three decades ago – and a property market where values have soared in that time – there has been speculation that the Government would force a mass reassessment of property bands.

As of January 2022, there is no evidence to suggest such a move is scheduled. With an estimated 23 million domestic dwellings in England, any plan to revalue and re-band properties would take years in the planning and would require huge resources. For now, the current bands look set to stay, unless challenged by the property owner.

If you would like more detailed information on property bands and whether you qualify for a council tax discount, visit the Government’s dedicated webpage. If you would like to know the band and council tax bill for a property we are marketing, please get in touch.

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Lettings Group 1 Sales Group 1

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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Lettings Group 2

Levelling up for landlords: your questions answered

Levelling Up the United Kingdom is a new White Paper released by the Government. It’s aim is to bring better opportunities to all, no matter where people live in the UK, and one of the areas it wants to reform is housing.

The White Paper will have an effect on how lettings operates and the standard of rented homes available, so landlords do need to pay attention. In this blog, we answer the most commonly asked questions about Levelling up The UK.

Q. Is the Levelling Up White Paper the same as the Renters’ Reform Bill?
Despite there being some crossover in content, these are two separate entities. The Levelling Up the United Kingdom White Paper does mention many aspects that pertain to lettings but the text also refers to a ‘landmark’ White Paper to be published in spring 2022. This is another document that acts as a prelude to the Renters’ Reform Bill, and it may contain additional changes specifically related to lettings.

Q. What’s happening about evictions?
Talk of banning Section 21 ‘no fault’ evictions has been swirling around the lettings industry for almost two years and the Levelling Up White Paper confirms that this is still the Government’s intention. It is hoped a brand new Section notice will be introduced or an amendment will be made to the existing Section 8 notice in order to protect landlords looking to regain their properties.

Q. Will I have to make improvements to my buy-to-let property?
The Government has announced that it is to consult on a new legally binding Decent Homes Standard in the PRS (private rented sector). Although there are no details of what constitutes ‘decent’, there is already a Government document called A Decent Home for social landlords. Any new Decent Homes Standards for the PRS could be influenced by this. Landlords should expect, by law, to make the upgrades and improvements required to bring their properties up to a new minimum standard for habitation.

Q. What’s being done to stop rogue landlords?
The Government would like to drive bad landlords out of the sector and one way of doing this is to introduce a National Landlord Register. Although there is already a database of rogue landlords, it is only available for use by local authority enforcement professionals. It is thought a National Landlord Register would be open to the public, allowing tenants to identify landlords to avoid.

Q. Will it become easier to buy and sell rented properties?
The Levelling Up White Paper acknowledges that the buying process could be improved. It wants to ensure ‘critical information buyers need to know is available digitally wherever possible from trusted and authenticated sources’. This may pave the way for less paperwork and more online communication, as well as improved central sources of digital information and pre-prepared property details.

Q. When are all the changes coming into effect?
As of 3rd February 2022, no fixed dates for these changes were given. As an illustration, the Renters’ Reform Bill was put forward in 2019 but nothing has been adopted by law or ratified yet. It may take months – years even – to see the full effect of the proposals and in the case of the National Landlord Register, this is a reform that the Government is merely consulting on. We will update landlords after the spring White Paper has been published.

Although it isn’t exactly light reading, you can read the full Levelling Up the United Kingdom White Paper on the Government’s website (there’s also an executive summary for those short on time).

If you think any of the proposed changes will affect your buy-to-let or investment portfolio, get in touch for advice and guidance.

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Lettings Group 1

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.

Categories
Lifestyle Group 1

How to tell if your next home will be warm

The topic of staying warm at home has never been more pertinent. In the face of a cold winter and rising fuel prices, Ovo Energy – Britain’s third-biggest energy supplier – sent an email to its customers in January, containing ideas on how to stay warm.

Ovo’s advice was ridiculed in the press. The firm’s ‘simple and cost effective’ tips included cuddling your pets and loved ones to stay cosy, eating ‘hearty’ bowls of porridge and consuming ginger (but not chilli as that makes you sweat) and doing a few star jumps.

While the pointers were well-meaning, they aren’t very practical on a long-term basis. A better solution is to ensure your next property is as energy efficient as possible, allowing you to enjoy a warm home without resorting to a daily diet of Quaker oats.

EPC ratings are your best friend

If you are moving home soon and want to know if the property will retain heat, there are a few things you can look out for. The first is the EPC rating – which shows how energy efficient the property is. All dwellings, whether to rent or for sale, will be listed with an EPC rating – look out for the coloured bar graph on our property details.

Properties are given a letter to show how energy efficient they are – an A rating is the best and G is the lowest. Although properties for sale can have any EPC rating to be sold, landlords can only rent out properties that have an EPC rating of E or above. 

If a property’s current EPC is more than 10 years old – or if the home doesn’t have an EPC at all – an energy assessor will visit and look at certain aspects to decide how good its energy performance is. The heating system makes up the largest part of the EPC calculation, so a high rating is a good indicator that the property will be warm. Also taken into consideration by the assessor are windows, loft insulation and the external structure – all of which have an impact on how well heat is retained and cold air kept out.

Ask to see energy bills

While an EPC certificate will provide a guide to a home’s ability to generate heat and stay warm, seeing energy bills or smart meter readings from winter months will give you an idea of how heavily the current occupants rely on gas and electricity.

Energy bills are good for guidance but ensure you know if the property is heated using a gas-fired boiler or by electric storage heaters when interpreting the figures. In addition, bear in mind other energy usages outside of heating a home – lighting, powering electrical goods and cooking on a gas stove, for instance.

Be vigilant on viewings

If you are looking around a property between the months of November and March, there’s a good chance the heating system will be fired up when you arrive. Check the warmth coming from radiators and ask to see the boiler, noting the make and model. Don’t forget to ask about alternative sources of warmth, such as underfloor heating, electric towel rails, wood burning stoves, open fires and gas fireplaces. 

If you would like more information on EPC ratings and what to look out for when moving home, please contact us today.

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Lifestyle Group 2

5 ways to know if a potential property will be warm

With the threat of rising gas and electricity prices, it’s no surprise that people are increasingly concerned about  energy efficiency. Heating your home and staying cosy once warmth is generated is very much a hot topic, pardon the pun, so Britain’s third biggest energy supplier – Ovo Energy – felt compelled to dish out some rather novel advice on staying warm at home this winter.

From eating bowls of porridge and performing a few star jumps to cosying up with your pet and leaving your oven door open once you’ve finished cooking, the company’s tips were mocked in the media and labelled unrealistic.

If you’re not happy with how your current property heats up and stays warm, moving to a new home represents a good chance to live somewhere more energy efficient. As well as resulting in lower energy bills and reducing your carbon footprint, a warmer home is the perfect solution if you haven’t got a cat to cuddle.

Here is our advice for home movers on the hunt for comfortable temperatures:-

  • Check a property’s EPC rating

If you’re looking for a home that offers a toasty living environment, take time to understand the EPC rating. An energy assessor will have evaluated the heating system, the windows and any insulation when calculating the rating, which is expressed as a letter. 

A well-performing home will have a better EPC rating – an A is the best classification with G being the worst. Every home we list has an EPC certificate, so ask us for the full details.

  • Read the full EPC report

As well as a certificate showing what letter rating the property has, read the energy assessor’s report. It will contain advice on where energy efficiency can be improved and from this, you’ll be able to deduce how well the property generates heat and where it’s being lost. If the assessor recommends better loft insulation, the addition of cavity wall insulation, upgrading single to double glazing, improving draught proofing and swapping to a condensing boiler or heat pump system, you’ll know the levels of warmth may be compromised.

  • Know when the property was built

All newly built homes have to meet minimum energy standards, so they will be the warmest around, but older homes – especially those that are listed or considered ‘period’ – may be harder to heat and more difficult to keep warm. Aspects such as ill-fitting wooden floorboards, open flues, ageing windows, gaps in the roof and a myriad of cracks formed over time will leave a home feeling chilly. The good news is these defects can be fixed.

  • Enquire about running costs

The current occupants are the best port of call if you want to know if a property is cold and how much is spent on making it warmer. Ask to see fuel bills or smart meter readings from the coldest months – January, February and March ideally. Although how cold a person can stand being at home is subjective, enquire about very heavy gas bills (or electricity bills if the property is fitted with storage heaters).

  • Conduct a smart viewing

There is no substitute for actually visiting a property you’d like to move to and if you’re going on a viewing in winter, you can feel for yourself how chilly a home is. It’s advisable to touch walls and floors with your hand – if they’re stone cold it could indicate the property is hard to heat. If the central heating is on, use caution to feel the radiators, noticing any unheated spots, as this could indicate the system needs attention. You can follow up your viewing with additional questions, asking about the age and type of boiler, how much loft insulation there is and details of the nature of glazing installed.

If you’d like help with EPCs and energy efficiency when moving home, please contact our team today.

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Lifestyle Group 2

Purple reign! 6 ways to use Very Peri

After last year’s dual grey/yellow combination, the colour masters at Pantone have reverted to a single shade for 2022’s Colour of the Year. Introducing Very Peri – an uplifting shade of purple that was created especially for the year ahead.

Unlike other shades of purple, which are either classified as warm or cool, Very Peri is a mix of colder blues and violet reds, which makes it an easier shade to work with. That said, we appreciate that it may not be a hue you want to paint an entire room.

Using Very Peri as an accent colour is a flexible, low cost and more temporary way of embracing the latest colour trend in your home – especially if you are in rented accommodation and can’t make permanent changes. Here are 6 ideas to try:- 

  1. Say it with flowers…and a vase: one of the quickest ways to bring Very Peri into your home is with a bunch of flowers. Choose hyacinths, irises, hydrangeas and lisianthus for a heady mix of purples, or opt for an all-white selection of blooms displayed in this Dartington Crystal Vase in the amethyst colourway, stocked at John Lewis.
  2. Throw in the towels: add colour and a spa-like vibe to your bathroom with a new set of fluffy towels – neatly folded in a stack or placed over a heated towel rail. Marks & Spencer’s cotton rich towels in the colour violet are a great Very Peri match.
  3. Paint it purple: paint isn’t just for walls. Prepare your surface correctly and choose the right paint finish, and you can apply a coat to just about anything – photo frames, bedside cabinets and even terracotta pots. Try Dulux’s off-the-shelf shade Purple Pout, or its mixed-to-order shade Amethyst Showers 1.
  4. Colour up with candles: Very Peri’s likeness to a vibrant shade of lavender makes it easy to find purple-coloured candles. Many examples that are infused with the scent are often coloured purple too – such as these ribbed lavender-scented candles by Bolsius, stocked by Wayfair.
  5. Cast some shade: whether you have a table lamp, ceiling pendant or wall light, a change of shade can completely change a room’s look. Pooky has an amazing choice of shades designed to fit a variety of fittings. Opt for the empire shade in cobalt silk for a fantastic colour match.
  6. Blanket coverage: a blanket or throw is one of the most versatile home accessories you can buy. This super-soft dyed cashmere blanket in violet from Anthropologie will add Very Peri vibes when neatly folded at the end of a bed or draped over the arm of a sofa.

Over the years we have seen many different interior design schemes in our property visits, with varying degrees of success. If you would like to view our current crop of design-led homes – or would prefer your next property to be a project – please contact the team today.

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Lifestyle Group 1

Very Peri: how will you use Pantone’s Colour of the Year 2022?

It may be best to stop reading now if you’re a fan of neutral design palettes, as home interiors are set to be full of Very Peri this year – Pantone’s Colour of the Year 2022. For the first time in its annual colour trend history, the company created a brand new shade that wasn’t already in its extensive catalogue.

Very Peri has been described as a ‘periwinkle shade of blue’ that also brings to mind fields of soft lavender and hyacinths in full bloom. Unusually for a colour that is arguably purple, the colour is a blend of cool blue tones and richer violet-reds. As a result, Very Peri is a warm shade that can be embraced in a variety of settings. 

If you are a fan of the colour but are struggling to imagine how you could use it in your home, here’s our room-by-room guide:

Living room: if you are worried about overpowering purple on your living room walls, stick to colour on accessories and textiles. Flashes of Very Peri can be introduced by adding scatter cushions, a rug, a lampshade or even a piece of art hung over a mantlepiece. 

Kitchen: despite its functional role, it’s still possible to bring the latest colour trends to where you cook. Look out for Very Peri themed ceramics, such as mugs, fruit bowls and ovenware, or make a more permanent change by retiling in purple – a colour that works well with white kitchen cabinetry.

Bedroom: if you would like to embrace Very Peri in a bolder way, a bedroom is a great place to start. Try bedlinen or a window blind for a dash of colour, or use the wall behind your bed as your focal point. A painted or wallpapered feature wall would look great.

Bathroom: white bathrooms suites can be perfectly paired with Very Peri as the blank canvas really makes any accessories stand out. As well as soft towels in a shade of Very Peri, look out for colour matched soaps, toiletries and candles that can be used to create a hotel-style display.

Exterior: kerb appeal is very underrated and a splash of colour can transform your front of house. If repainting your front door in Very Peri is a step too far, you can add an essence of the colour by opting for plant pots painted purple.

Garden: its periwinkle description shows how nature has inspired Very Peri; no wonder it’s easy to surround yourself with this shade by refreshing your planting scheme. Opt for lavender, nepeta, hydrangeas, liatris and veronica spicata, whose purple hues are a great match for Very Peri.

If your design ideas lead you to a new property, contact us for a list of the latest houses and apartments available.

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Sales Group 1

All you need to know about Japanese knotweed

There are a couple of phrases that strike fear into the hearts of property sellers – ‘serious subsidence’ and ‘negative equity’ being two of them. Another phrase you never want to hear is ‘Japanese knotweed’, but is having this invasive plant among your borders really a property death sentence?

Over the course of 2021, it is estimated that £11.8 billion was wiped off the value of UK property due to the presence of Japanese knotweed, with values taking a dip as soon as the plant is identified in a survey report or disclosed by the seller.

This figure, however dramatic it sounds, is a little misleading. Homeowners should be aware that only around 4% of UK properties are affected by Japanese knotweed and even when it is detected, it impacts the value of a property by about 5%. In many cases, a home’s full value is often achieved after an appropriate course of action is taken, despite the plant’s presence.

Even though the plant is found at less than 10% of UK properties, Japanese knotweed isn’t something that can be glossed over when it comes to selling a property. When you have decided to sell, you’ll be asked to fill out a Property Information Form (TA6). 

This form requires sellers to give detailed information about the property and the surrounding area. It is a legal requirement to disclose if the property is or has ever been affected by Japanese knotweed, as its presence can create or worsen cracks in mortar and structural joints, as well as push up through paved and concrete areas. 

It’s important that the ‘affected’ aspect is understood too, as sellers will need to divulge if they’ve ever had to treat the plant if it spread from a neighbouring property. It’s worth noting that a Japanese knotweed plant can be up to 7 metres away from your boundary and still need disclosing on a TA6 form.

Identifying Japanese knotweed (fallopian japonica) can be troublesome if you have no horticultural experience – it can look similar to other harmless plants but the RHS provides a good point of reference. If you’re in any doubt, it’s wise to revert to a specialist removal company for identification.

There is good news. Selling a property is entirely possible if there is Japanese knotweed. It really isn’t the barrier that some people imagine it can be. The vital aspect is to seek guarantee-backed treatment that mortgage lenders will accept. 

It is usually the seller who instructs a specialist Japanese knotweed removal company to excavate and remove the plant’s rhizomes. The plant is rarely eradicated for good through hand weeding or with the use of herbicides as the rhizomes will be buried deep underground. 

If a removal company offers an insurance-backed guarantee, lenders (sometimes referred to as knotweed IBG, a Japanese knotweed indemnity or a knotweed insurance-backed warranty), there’s a high chance a mortgage lender will loan against the property.

Don’t forget, the Japanese variety isn’t the only invasive knotweed out there. Dwarf, giant and bohemian are the other top three knotweeds buyers and sellers need to be on guard for. You can visit the Government’s web page dedicated to the prevention, treatment and disposal of knotweed for further details. 

If you are planning to sell a property where you suspect a case of Japanese knotweed, or are buying a property where the plant has been disclosed on the TA6 form, please contact us for advice and guidance

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Sales Group 2

Japanese knotweed: 7 plant points to note

A report by Environet UK at the end of 2021 discovered that Japanese knotweed – a non-native and aggressive weed – had knocked an estimated £11.8 billion off the value of UK property. While it’s lush leaves and dainty white flowers may look attractive, its potential to scupper a transaction is something buyers and sellers need to be aware of.

Despite its bad reputation, identification and successful treatment of Japanese knotweed almost always result in favourable outcomes for sellers. Here are the 7 most important points you need to know when it comes to the plant:-

1. Even though Japanese knotweed is a well-known horticultural pest, only around 4% of UK properties actually have a problem with the plant. It is an invasive species that is classed as a weed but it’s not illegal to let it grow in your garden.

2. When you sell a property affected by Japanese knotweed, this must – by law – be disclosed on the Property Information Form (TA6). Disclosure also pertains to Japanese knotweed that has spread from a neighbouring property or from surrounding land – any plant within 7 metres of the property’s boundary must be mentioned.

3. Some lenders won’t approve a mortgage on a property where there is Japanese knotweed as it represents a threat to the structure of the building. Its roots and rhizomes can damage drainage systems, foundations and walls – harming a home’s current and future value, and potentially making it unsellable in the future.

4. If you suspect Japanese knotweed, you will need to instruct a Property Care Association (PCA) approved surveyor, who will assess the plant and its posed risk. They will grade the problem using a categorisation system set out by the Royal Institution of Chartered Surveyors – a system widely used by mortgage lenders to assess risk.

5. Eradicating Japanese knotweed needs the involvement of a specialist company. The plant’s rhizomes are buried very deep in the ground and simply pulling out what’s above ground is very rarely enough – the stems merely snap and the plant regrows quickly, sprouting up to a metre a week in spring. There are also strict laws governing the disposal of Japanese knotweed, set out by The Environment Agency.

6. Japanese knotweed doesn’t always have a detrimental effect on a property’s value. Reports suggest the plant can reduce a home’s value by around 5% but in cases where there has been a successful insurance-backed treatment (see below), the full market sales value is often achieved.

7. It is essential that any eradication work is carried out by a specialist Japanese knotweed contractor that offers an insurance-backed treatment plan accepted by mortgage lenders (also known as knotweed IBG, Japanese knotweed indemnity or knotweed insurance-backed warranty). With this in place, mortgages on properties that have Japanese knotweed are usually granted, although the lender will usually want the treatment finished before completion takes place, and it may also require a larger deposit.

If you have any questions about Japanese knotweed – as a buyer or a seller – please call us for guidance.

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Lettings Group 1

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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Lettings Group 2

Your damp & mould questions answered

Damp and mould are not glamorous topics but some of our most frequently asked questions involve humidity, condensation and unsightly black patches. As landlord responsibilities are bound in legislation and compliance, including the Homes (Fitness for Human Habitation) Act 2018 and the Housing Health and Safety Rating System (HHSRS), it is imperative those involved in lettings understand how damp and mould issues are tackled. 

Here are the answers to the most common damp and mould questions:

What is damp?

Damp is a broad term for the presence of water, moisture and condensation within a property. There are three main types of damp. Rising damp is when moisture is drawn from the ground up through a property’s bricks and mortar, while penetrating damp is a result of a structural defect – such as a cracked chimney stack or broken gutter. Ambient damp is usually attributed to condensation and is a by-product of everyday lifestyles inside. 

What produces condensation?

Condensation is when warm air full of water vapour comes into contact with cool surfaces. In the home, this can be the steam from a hot shower settling on a cold mirror, or a kitchen window fogging up when boiling a pan of water. Having a conversation, breathing in our sleep, houseplants and wet washing drying inside also create condensation.

What is mould?

Mould is a microscopic fungus that grows best in damp and poorly ventilated areas – it’s what you see if there’s a black-green, mottled stain on a wall or window sill. As well as being unsightly and damaging to surfaces, the presence of mould and its spores can create or worsen respiratory health issues.

Who is responsible for preventing & treating damp in rented properties?

Prevention is definitely a shared responsibility but it is usually the responsibility of the landlord to provide the cure. In the case of rising and penetrating damp, a structural fault is usually to blame. It falls to the landlord to solve the issue and make repairs under Section 11 of the Landlord and Tenant Act 1985.

It is wise, however, for tenants to let landlords or their property manager know if they see the first tell-tale signs of damp or mould, such as peeling wallpaper, bubbling paint, black speckles or water droplets – especially if these are on the interior surfaces of outside walls. In fact, a tenancy agreement may stipulate that it’s a tenant’s responsibility to flag up issues early.

Ambient damp needs a team effort. A tenant should take measures to reduce the amount of condensation they produce in their property by making lifestyle changes, while landlords should create an environment where warm, humid air can easily escape.

Are there any condensation, damp & mould prevention tricks?

For tenants, this could be: line drying washing outside or using a condensing tumble dryer; ensuring the inside temperature in winter is kept steady throughout the property at around 18°; ventilating the property by opening windows whenever safe to do so, and keeping steam confined to one room by shutting the bathroom or kitchen door.

A landlord can also play their part by ensuring there are extractor fans in all high humidity areas; using specialist anti-mould and condensation products in kitchens and bathrooms; ensuring replacement windows have trickle vents installed, and making sure windows have locking safety latches so they can be left securely ajar for ventilation. 

Nip small issues in the bud

Professional inventories and scheduled inspections commissioned by a letting agent are two other ways of ensuring instances of damp and mould are recorded, tracked and attributed. Often small lifestyle changes or the installation of extractor fans are enough to reduce condensation to acceptable levels. If you’d like more advice on the matter, get in touch with our team.

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Lettings Group 2

The pros and cons of longer tenancy lengths

Results of the latest English Housing Survey (EHS) have brought the issue of long-length tenancies back into the spotlight. While the idea of making 3-year tenancies mandatory was abandoned by the Government in 2019, following an extensive consultation, the survey results have highlighted how renters are choosing to stay in the same rental property for extended periods.

The EHS found the new average stay in a privately rented property is now 4.3 years – surpassing the three-year benchmark that was widely rejected as a mandatory term. It’s a trend that has been building for a number of years, with the average tenancy length rising from 3.9 years in 2016/17 and 4.1 years in 2017/18.

The findings may prompt more landlords to consider offering longer-term tenancies but there are pros and cons to weigh up when it comes to offering rental agreements of more than 12 months. Here’s our quick-read considerations guide but for tailored advice, please contact our lettings team.

Pros:

  • Void periods are reduced: any void is a drain on finances so reducing the number of times you have to find new tenants – a process that may potentially leave a let empty for a week or two – is a good thing. A long-term tenant also ensures rent is always hitting your bank account every month.
  • You’ll generate a ‘hands off’ investment: long-term tenants are a great option for landlords who like as little involvement in their buy-to-let as possible. There’s less worry about renewing tenancies, finding new renters, check ins, inventories and check out, plus landlords who opt for a fully managed package can really sit back and enjoy the rewards.
  • Tenants will reward you with respect: tenants who feel secure in their rental generally feel more positive about the experience. They will be keen to create a home they can settle in, and anecdotal evidence suggests they look after the property better and forge good relationships with the landlord or property manager.

Cons: 

  • Regaining possession may be harder: currently, landlords can serve a Section 21 ‘no fault’ eviction notice after a fixed term tenancy ends. If the agreement is only for 6 or 12 months, regaining possession doesn’t pose too much of a problem. If the agreement length is two or three years, landlords may have to wait an untenable amount of time. One workaround is to insert a break clause into long-term agreements – something we can organise on behalf of landlords.  
  • You’ll have to trust your tenants: when the same people live in your let for 2 or 3 years, you’ll have to trust that they’ll take care of the property and pay the rent on time, especially if the eviction process will favour the tenants more in the near future. Referencing carried out by a letting agent is the best line of defence. It will uncover an applicant’s past renting behaviour and reveal their financial situation, allowing the most trustworthy tenants to be chosen.
  • Rent reviews will need careful planning: it’s a wide-held but unwritten rule that landlords reward long-term tenants with fair rents that aren’t hiked up overnight. If you’re used to raising the rent every time new tenants sign up – perhaps as often as every 6 months – you’ll need to plan a rent rise strategy before you move in long-term tenants. Always consult with a letting agent and consider writing any plans into the tenancy agreement. 

Speak to us about setting the right tenancy agreement length for your property, your target tenant and the current lettings market. We will create the perfect tenancy agreement that factors in break clauses, rent rises and notice periods.

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Lettings Group 1

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.