On Sunday 28th April 2013, staff from PWR Mansfield & Nottingham enjoyed a day off roading in a 4 x 4 with Keith Johnson and his son , whom we sponsored for the Mac 4x4 challenge for MacMillan Cancer Research.
A great day was had by Simon, Rob, Adam, Steve & Richard under excellent guidance, however, there were a few mishaps, including Adam getting the 4x4 stuck in the mud (we were assured it was not his driving - but have you seen him drive!) and when the rest of us stopped to take in the incident, Richard decided he would cross the mud on foot to have a look at the other side of the car, only to find that his foot sunk a foot into the mud and he needing pulling out by Rob West.
Unfortunately, his trainer stayed in the mud, but after assistance to pull it out, he only required a good bath on his return home !
We would like to thank Keith Johnson and his son for a great experience.
A new cousin for the buy-to-let market is the build-to-rent market. This idea, proposed in the Montague Report, is to have properties specifically built for the rental market.
A £200 million pot of money has been made available to provide finance for development where the properties are to be rented out. Once the properties are built they will be sold on or refinanced and the money made available for other build-to-rent schemes. It is anticipated that this may attract further institutional investment in the private rented sector.
Housing Minister, Mark Prisk, said: "A healthy rental housing market must have a broad range of choice across the board. But for it to grow and develop, we must first attract new investors. The build-to rent fund will support this, helping to build homes specifically for private rent and breathing new life into the sector. And by driving this market in house building, the fund will also help create new jobs."
April 2013 saw the start of further welfare reform changes.
These include the cap on the total benefits a person can receive. The cap will be £350.00 per week for a single person and £500.00 per week for others. A full roll-out of Universal Credit seems to be delayed and is likely to start after October 2013. This change will also see housing benefit administration handled centrally and not by local authorities.
Council tax benefit is also changing. Instead of this being set by central government, this is now devolved to local authorities. In addition to council tax benefits being 'localised' , the new scheme is only 90% funded by central government. Each local authority can choose how they fund the balance, though certain groups are safeguarded.
Some local authorities are increasing council tax to pay for the shortfall, whilst others are cutting services or charging all council tax payers some contribution to fund the shortfall. The effect is likely to be an additional pressure on working age people that are less well off.
The change in council tax rules also allows local authorities more local choice about council tax rates and exemptions. For example, they can vary how long an empty property, or one being renovated, will be exempt from paying council tax. Likewise they can charge up to 150% council tax on long-term empty properties.
This last change to council tax exemptions will possibly have one of the largest impacts on private Landlords, as they will now often be required to pay council tax when their property is empty. Indeed, the void period of any investment property will now prove more costly and the better, more efficient Letting Agents who can find suitable tenants quickly will be worth their weight in gold.
The number of first-time landlords entering the private rental market is increasing, according to a new report issued by Paragon. Indeed, their latest quarterly survey found that the presence of new landlords in the sector has been growing since mid-2009.
The report found that on average 20 per cent of intermediary companies' business has come from first-time landlords since the final quarter of 2010.
Across Nottinghamshire, PWR Property Consultants have noticed the change in the profile of Landlords in the market place over the last 4 - 5 years. Professional landlords have struggled to release equity and secure new finance over the last few years after the fall in house prices and it has been down to cash rich individuals who are often nearing retirement to pick up the slack, as they have been able to find the required deposits.
Simon Perkins, Partner at PWR Property Consultants commented "the report shows the continuing desire of those who wish to invest in property doing so via buy to let."
This new breed of private investor landlord typically owns between one and five properties and in many cases have switched their funds from other underperforming asset classes and bank savings accounts to residential property, in the search of higher income yields.
"Yields on rental income from residential property across Nottinghamshire is typically between 6 - 7 % gross for 2 and 3 bedroom houses, upto 8% gross on 1 & 2 bedroom apartments," states Mr Perkins, " but for those individuals willing to take on a project or buy in bulk, gross yields often in excess of 8-8.5% can be achieved."
PWR Property Consultants provide a one stop service for investors from identifying and acquiring the right property in the right area, project management of any works required prior to letting, through to the marketing, letting and full management of the property thereafter.
Please contact Simon Perkins on 01623 659111 or 0115 9264500 for further information or email : email@example.com.
By Simon Perkins
The Government’s change of policy will now allow automatic direct payments of housing benefit under the Universal Credit scheme to landlords, providing the tenant is more than 8 weeks in arrears.
The government rethink has been welcomed by industry leaders and all UK landlords who currently house tenants in receipt of housing benefit.
The Government’s first flagship universal credit pilot scheme went live in Ashton-under-Lyme at the end of April, and it has been revealed that automatic direct payments to landlords will now be allowed in the pathfinder areas.
The policy change was tucked away on the last page of an obscure circular published by the Department of Works and Pensions (DWP) apparently.
The circular states, “Landlords can refer rent arrears cases to Universal Credit; those which are under 2 months rent will trigger Universal Credit to contact the claimant to discuss their non payment as part of the Personal Budgeting Support process, where as those with over 2 months arrears will be switched to direct rent payment automatically and relevant budgeting support activity arranged subsequently.”
The news that direct benefit payments to landlords will now be triggered automatically following two months of rent arrears represents a welcome change in policy by the coalition Government, which had previously insisted that direct payments to landlords would only be allowed in exceptional circumstances and even then not automatically. We are yet to see whether this will apply to the National roll out of Universal Credit later this year.
Sub letting is on the rise, reports Lettings Specialist, PWR Property Consultants. The phenomenon, also known as Rent-to-Let, involves a tenant renting a property and then sub-letting it-or a room within the house or apartment - for a profit without their landlords consent.
Founding Partner, Simon Perkins says " It is no new phenomena or trend that is happening, but sub-letting is now becoming a lucrative business in today's marketplace with some tenants renting a number of properties and then letting them out as rooms. It is an increasing problem, particularly in larger cities and university towns like Nottingham where many of the people subletting are foreign students who find these rooms through the internet. Unethical in every sense, these tenants pay no tax on the income they earn so, as well as defrauding their landlord, they are also defrauding the Inland Revenue".
Unfortunately, there is not a lot that a landlord can do from a protection point of view, but Simon states that however difficult it is to avoid this situation, there are steps that can be taken which may deter scammers and landlords should be aware of these.
Simon continues: "A good professional Letting Agent can help minimise the risk to their Landlords by making sure that they have all the correct paperwork in place, including comprehensive tenant referencing and also a professionally compiled inventory and schedule of condition. Being thorough with checks from the outset can show potential scammers that everything is being performed and documented correctly, often discouraging them from taking any unethical actions."
Following this, there are definite signs to look out for, such as a single occupant renting a large property, if the tenant's work address is miles away from the property, or was he renting before? Most rented properties that are sublet have more than one bedroom, so tenants have the opportunity to let rooms out individually.
Finally, a Specialist Agent like PWR Property Consultants will help landlords to avoid this problem by ensuring that nothing is overlooked. PWR insist on regular property visits which will more than likely stop any sub-letting from taking place, and if visits are declined by the tenant time after time, then the alarm will be raised. During property visits, checking things such as the number of toothbrushes in the bathroom or unmade beds can also be a tell tail sign of subletting.
However, despite these steps being taken, current legislation is so determined to protect tenants from rogue landlords and agents, that it in no way, considers the problems that tenants can create. As long as subletting is a civil offence and a landlord's only redress is by claiming a breach through the courts, there is not much deterrent for the scammers.
Indeed, there is unlikely to be any county court judgment, as scammers will generally pay the rent to the landlord on time, since they can quite easily afford to ! The worst that can happen is they have to hand the property back and their actions will not be recorded or registered any where for future landlords to check. Until legislation changes to take into account the damage a 'rogue' tenant can cause, we would always urge landlords to take professional advice prior to entering an agreement to help avoid such a situation from occurring.
By Simon Perkins
Unscrupulous Landlords often attempt to include additional damage into check-outs without any photographic or written evidence to support it.
Landlords , keen to keep the deposit and charge tenants for additional costs to repair or decorate a property, are looking to add new damage to check out reports, which were never recorded at the check in.
"We often come across cases where the landlord has not bothered to take into account the check-in inventory, so when it comes to the check-out, they are up in arms over issues, which they believe should be included in the check-out and charged to the tenant", states PWR Partner Simon Perkins
"Indeed, the underlying problem is twofold. Firstly, landlords don't understand the inventories and check-in documents, so they have no real idea of the detailed condition of the property and its contents. Secondly, landlords have different expectations when it comes to fair wear and tear issues, particularly when it's their own home and often try to get additional works completed from the tenants deposit, which is actually the Landlords responsibility".
Obviously, there is a distinct difference between fair wear and tear and actual damage -for example carpet tread will flatten over time, where there has been foot traffic, but cigarette burns, stains or soiling will require a charge against the tenants deposit.
Normal fair wear and tear is a fact of life with rental properties, just as it would be at home. The best way that landlords and agents can ensure that the property's condition is fully recorded is by having a comprehensive inventory in place at the start of any new tenancy, and that a thorough check-in and check-out report is completed, as is the case at PWR Property Consultants.
PWR Property Consultants as a specialist in Lettings and Property Management have fully trained staff who are experts in assessing fair wear and tear and have the knowledge and experience to take into account all factors and make a reasonable judgement as to whether something is fair wear and tear or not.
According to the Association of Independent Inventory Clerks (AIIC), the most common damage found in rental properties includes iron burns on carpets; cigarette burns; soiled marks on baths and UPVC window sills and frames; heat damage to polished wooden furniture; and stiletto heel imprints on wooden floors and vinyl.
The most contentious issue though always seems to be the cleanliness of the property, which is why we always recommend a thorough professional clean prior to the first letting of a property, which sets the benchmark for the property going forward.
By Simon Perkins
Tenants are staying in rental properties for a longer period of time, according to new research by ARLA.
It found that the typical renter stays in the same home for 20 months, which is the joint highest tenancy length recorded by the organisation.
This figure is up year on year from an average of 19 months in the first quarter of 2012, indicating that tenants are starting to take a longer-term view of renting a property.
Nearly 57 per cent of ARLA agents reported they are seeing more people looking for homes than there are properties available.
This high level of demand is making the market very competitive and may be discouraging existing tenants from moving, which in turn reduces the number of vacancies on the market.
PWR agree with Ian Potter, ARLA Managing Director that their data suggests that tenants are increasingly sitting tight in their property and either reluctant, or unable to move. This stagnation means fewer and fewer properties are freed up.
Indeed, PWR's average length of tenancy is closer to 2 years and more like 3 years where Housing Benefit tenants are concerned, which shows that a good Housing Benefit tenant with a guarantor can often make a good long term tenant and minimise the chance of void periods for a Landlord.
Minimising void periods is particularly important since the 1st April this year, since many councils have withdrawn in full or part the empty property council tax exemptions, so a void period is not only now costing a Landlord in rent, but in many circumstances, they are also having to pay some council tax while the property is empty !
For Landlords with a well maintained property, which is priced correctly in a lettable area, void periods should not pose a problem as there is generally a high demand from prospective tenants.
By Simon Perkins
Landlord optimism is at the highest level in nearly three years, according to a new survey by Paragon Mortgages. Their research found that 30 per cent of landlords are feeling hopeful about the prospects for their property portfolios this year.
In the first quarter of 2013, landlords achieved an average yield of 6.2 per cent, while the typical void period decreased to 2.8 weeks compared to three weeks at the end of last year.
The first quarter of 2013 has been a relatively positive one for landlords. The increasing level of optimism is a good indication of how landlords are feeling about the prospects for the private rented sector, according to John Heron's comments, director of mortgages at Paragon.
He said that while there has been a good start to the year, more landlords need to invest in their portfolios to meet growing demand for rental property.
PWR agree that the buy-to-let market has made great progress over the last 18 months, but it is vital that the momentum continues in the coming months.
Indeed, PWR have seen the resurgence of Buy to Let investors both new and old who are looking to either start a portfolio or grow their existing property portfolio.
"With gross rental yields averaging in excess of 7% on smaller houses and apartments and getting in excess of 8.5% on some properties throughout Nottinghamshire, where Landlords are prepared to carry out improvement works or buy in bulk, the time seems to be right for many that have held off investing for the last 4 or 5 years", comments Simon Perkins, Partner.
PWR Property Consultants would always recommend that a Landlord consultants one of our experienced staff before purchasing a property to let in Mansfield or Nottingham, as we have seen many Landlords take advice from Estate Agents in the past who are only interested in selling the property and do not understand the rental market.
For advice on Buy to Let please feel free to email or phone Stephen at the Mansfield Office, Adam at the Nottingham Office or contact myself directly, thank you.
By Simon Perkins
Compulsory Redress Scheme for Letting Agents a step in the right direction ?
Following an amendment to the Enterprise and Regulatory Reform Bill, all letting agencies will now be required to sign up to a redress scheme.
This will ensure tenants and landlords who fall victim of malpractice are better equipped to challenge their agent.
RICS, which has been campaigning for increased regulation of the sector, welcomed the news as a step in the right direction, but said it will only offer consumers support once the damage has been done, which in many cases will be too late.
Peter Bolton King, the organisation's global residential director, commented: "The lettings market has for far too long been in danger of becoming the wild west of property industry."
He claimed a professional regulation scheme is now required, which will ensure a better standard of professionalism right across the industry.
The RICS still believes that there is a very strong business case for better targeted regulation and the RICS are working with the government to this effect, despite Mark Prisk on behalf of the Government stating in a speech given to the Estates Gazette Residential Summit, that a full set of new legislation to cover the industry, would be an "excessively burdensome approach".
Mr Prisk, the Housing Minister, believes the government's proposed changes to the ERR bill, which will oblige all letting agents to join a redress or ombudsman scheme, will be sufficient to tackle rogue practices, as he claims that full regulation could lead to both innovation and competition being stifled in the private rented sector.
The government claims that as well as giving landlords and tenants an avenue for complaints, access to redress will drive up the quality of the service that agents offer, which will benefit the whole market by changing perceptions of the industry.
As Regulated agents already, PWR Property Consultants have to comply with a raft of regulations imposed by both the RICS and ARLA, including client money protection regulations. Indeed, Partner, Simon Perkins explains, "Any bonafide Letting & Management company should have to comply with strict regulations as they are dealing with possibly a persons largest asset whether it be their own home or a buy to let property" .
Having a redress scheme in place is all well and good, but this does not mean that the agent is already employing best practice in all aspects of the business, merely that they will be penalised if they are not and a client suffers a loss, which with property can run into tens of thousands of pounds in certain circumstances.
Recent local cases of agents closing their doors owing thousands of pounds to both Landlords and Tenants, highlights this issue and that it is too late after the event, "Agents should have to comply at the outset when looking after a persons property and often tens of thousands of pounds worth of clients money. A Landlord or Tenant suffering a loss at the hands of a negligent agent will not thank the government for a redress scheme with no teeth," comments Mr Perkins.
Only time will tell whether the recent amendment to the ERR Bill will be effective in driving out rogue letting agents from the industry, however, PWR Property Consultants would always recommend a Landlord uses a Regulated Agent to protect both his or her property and the rents from it. For further information please contact Simon Perkins, Partner at PWR Property Consultants LLP.