What are the pros and cons of managing a rental property yourself?

admin    Uncategorized     agents

With over 400 separate rules and regulations governing the lettings sector, there’s a lot to know about renting a property. Here are the pros and cons of managing a rental property yourself:

The benefits

1. You’re in control

If you manage the let, you’ll always know exactly what’s going on with your property and tenancy as long as you regularly engage with your tenant and make comprehensive maintenance checks, so it’s always legally and safely let.

2. Saving on letting agent fees

Some landlords decide to DIY manage so that they can save on management fees which can range from 10% to 18% of your rent.

However, these fees are tax deductible, so the final cost could be 20 to 45% lower, and the net cost of using a qualified agent may feel a worthwhile investment.

3. It may lead to a rewarding career

If you enjoy investing time and effort in learning every aspect of lettings and management, you might consider making it your full-time career. It could take a while to get to this stage and you might want to work with a qualified agent first, but as long as you invest in certain registrations, training, licensing, accreditation and insurance requirements this might be achievable.

The downsides

1. You’re 100% responsible for legal compliance

When you use an agent that has proper training and legal support, you can be confident that your property is always legally let and managed. During Covid, there were over 40 legal changes, so if you’re handling the let yourself, you’ve got to keep up with all the rules and regulations at a local and national level.

If you fall foul of the law – even unintentionally – it could prove expensive. Your local authority can fine you up to £30,000 for each violation without going to court and, in serious cases, you could receive an unlimited fine, a banning order, or even jail.

2. It can be time consuming

There’s a lot to take care of before a tenancy begins. You must make sure the property is legally compliant, advertise, carry out viewings, and secure a tenant. You need to make referencing checks, draw up the tenancy agreement, get an Electrical Installation Condition Report, and check the tenant into the property – with an inventory and prescribed information.

Each month you have to check rent has been paid and chase up the tenant if necessary. Every 12 months you need a gas safety certificate and you’ve got regular inspections and maintenance to organise.

Even with the best planning, unforeseen problems can arise. Whether the issue is with the property or the tenant, it may need to be dealt with immediately and if you have a full-time job, it may be impossible for you to respond. And who will cover you if you’re ill or go on holiday?

3. There’s no ‘buffer’ between you and your tenant

Most tenancies progress smoothly, but every now and then you will run into an issue with a tenant. If you’re not used to handling disputes, it can be very stressful. If things escalate you may sadly need to evict your tenant.

If there are problems during the tenancy, it can be helpful if an agent well versed in dealing with every landlord/tenant issue can act as a buffer.

Not sure whether to property manage yourself or use an agent? Leaders has three levels of lettings services depending on how hands on you want to be. Just contact the Leaders team in your local branch.

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Podcast – how landlords and agents now face 168 rules and regulations

admin    Uncategorized     agents

Hamilton Fraser’s new Property Podcast, ‘Landlords, lettings and deposits’, offers landlords expert property advice on key industry topics across the private rented sector. 

In the latest episode, ‘Legislation – what do landlords and agents need to know?’, Eddie Hooker, CEO of LandlordZONE’s insurance partner, Total Landlord Insurance and Paul Shamplina, Founder of Landlord Action and Chief Commercial Officer at Hamilton Fraser, are joined by leading UK property expert and market analyst, Kate Faulkner (pictured) and Sean Hooker (pictured) Head of Redress at the Property Redress Scheme.

Landlords now have to meet 168 rules and regulations to let a property legally. But what are the latest legislative updates that landlords and agents really need to know about? Kate Faulkner has recently updated Hamilton Fraser’s legislation guide for 2022, and in this legislation special, the team of experts explores this topic from both landlords’ and agents’ perspectives.

Listen to the podcast

A radical rehaul of the lettings sector is on the horizon, with the rental reform White Paper due any day, and the potential opportunity to learn more on the details in the Queen’s Speech next week. But is the sector ready for more reform? And will it be a burden or a blessing?

From Section 21 to landlord redress and regulation, find out the experts’ take on how the sector is evolving: what is really happening behind the headlines? What are the key challenges for the sector? Who are the winners and the losers? Should landlords be worried? What is the most common complaint from landlords about letting agents? What do the team think about rent controls and licensing? And what should you do if your tenant can’t pay the rent?

In this episode, the team cover a lot of ground. So, whether you’re a new or experienced landlord, it’s a must-listen if you’re interested in regulation, the market and all things lettings. 

And you’ll also find out Kate and Sean’s answers the closing question, ‘You’ve got £50k to invest in property – where would you invest, and why?’ Listen to the podcast to find out what the experts would do!

You can read Hamilton Fraser’s comprehensive legislation guide here.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Podcast – how landlords and agents now face 168 rules and regulations | LandlordZONE.

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How long are courts taking to send notices?

admin    Uncategorized     agents

Hi everyone, I have recently been to court and got an order for a tenant who is in arrears with over £15000 of rental payments.

The tenant was given until the 27th of April by the court to move out.

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SHOCK: Just 12% of councils policing EPC certificates for privately rented properties

admin    Uncategorized     agents

Only 12% of councils are enforcing Energy Performance Certificate (EPC) rules requiring private landlords to raise standards at their F and G-rated properties.

Freedom of Information requests by Generation Rent revealed that just 13 out of 101 councils had issued enforcement notices following MEES enforcement work in 2020-21, a total of 359. Barnsley Council issued the most notices with 181, followed by Bristol (35) and Thanet (30).

LandlordZONE has previously reported that some landlords who can’t or won’t spend on retrofitting are capitalising on the lax way property listings are regulated by using gaps in EPC and other regulatory systems to make their properties appear legitimate online – simply by declaring that they hold a valid EPC instead of providing physical copies.

Growing financial pressures, particularly the unequal burden of retrofitting in parts of the UK, could also be adding to some landlords’ reluctance to spend money.

upgrade costs

A recent report by think-tank Localis reported that in areas of the North and Midlands, the estimated costs of improving home energy can be about 25% of property values, while in affluent parts of London and the South East retrofitting with heat pumps represents less than 2% of overall property value.

Generation Rent analysed EPC data to assess the scale of the problem in each region in England. It says 201,000 private rented homes are classed as F on their EPCs and 62,000 are classed as G, out of a total of 4,265,000, which by law now need to be raised to at least a D rating.

The pressure group has called on councils to commit to using publicly accessible data on EPCs to identify tenants in cold homes and all their enforcement powers, including improvement notices, to protect them.

Director Alicia Kennedy (pictured) adds: “The government needs to act much faster to ensure that private landlords insulate their properties, including by reforming tenancies to give tenants more confidence to exercise their rights.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – SHOCK: Just 12% of councils policing EPC certificates for privately rented properties | LandlordZONE.

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NRLA open letter answering unbalance Shelter press release

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The NRLA has sent an open letter to the Chief Executive of Shelter, Polly Neate CBE, looking to redress the imbalance of the latest Shelter press release:

Dear Polly,

I write following the publication of Shelter’s research: “Every seven minutes a private renter is served a no-fault eviction notice despite a government promise to scrap them three years ago.”

As you know

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BREAKING: NRLA takes Shelter to task over one-sided ‘anti-landlord’ campaign

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The NRLA has today published an open letter to Shelter taking apart its recent but widely-criticised research which gave the impression the entire landlord community is busy ejecting tenants without any reason.

Last week its press release claimed that “every seven minutes a private renter is served a no-fault eviction notice despite a government promise to scrap them three years ago”.

But the Chief Executive of the National Residential Landlords Association (NRLA) Ben Beadle (main picture) says in his missive that the campaign represented a “disappointingly one-sided picture, which has the potential to create needless anxiety for tenants that their landlord is about to evict them for no reason”.

“There are, as we know, a small number of irresponsible landlords who have no place in the market and bring the wider sector into disrepute.

“Your press release, however, gives the misleading impression that most landlords fall into this category which is far from the case.”

Section 21 campaign

Beadle goes on to accuse Shelter of selectively using industry and government data to embellish its ongoing campaign to have ‘no fault’ Section 21 notice evictions banned.

Beadle says Shelter omitted to mention key facts within its press release including how 75,000 Section notices being issued every year is just 0.7% of total tenancies; that the overall trend in evictions is downward and that Section 21 evictions are used by many landlords because the Section 8 process is broken.

He also highlights how landlords can easily be refused a Section 21 notice application for minor admin breaches – for example not issuing a ‘How to Rent’ booklet correctly at the start of a tenancy.

“The NRLA is not opposing the Government’s plans to end Section 21,” says Beadle.

“However, as our proposals for a new system make clear, Section 21 cannot simply be scrapped without the associated reforms needed to ensure that a new system is fair and workable for both tenants and landlords.”

Read the letter in full here.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: NRLA takes Shelter to task over one-sided ‘anti-landlord’ campaign | LandlordZONE.

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Leaked Boris proposal to let tenants buy their homes criticised as ‘hare brained’

admin    Uncategorized     agents

Renters could be offered the chance to buy their homes from housing associations under a new pilot scheme being considered by Boris Johnson.

In a move which could reduce demand from private renters as more tenants become homeowners, The Telegraph reports that the Prime Minister has told officials to revive plans which first appeared in David Cameron’s 2015 Conservative manifesto.

It aimed to give the 2.5 million households in England who rent properties from housing associations the ability to buy their homes at a discount of up to 70%.

It cited a source saying Johnson was “very excited” about rejuvenating Thatcher’s original right-to-buy policy.

However, questions remain about how housing associations would be compensated and how their stock would be replenished.

The Telegraph suggested another idea being considered is for government spending on housing benefit to be used to help recipients get mortgages.

More than one million households are already on social housing waiting lists in England according to Shelter.

Chief executive Polly Neate (pictured) criticised the “hare-brained idea” as “the opposite of what the country needs”, while housing experts warned that the policy amounted to the sell-off of affordable homes during the cost-of-living crisis and called instead for an increase in housebuilding.

“Right to buy has already torn a massive hole in our social housing stock as less than 5% of the homes sold off have ever been replaced. These half-baked plans have been tried before and they’ve failed,” said Neate.

Lisa Nandy (pictured), Labour’s shadow communities secretary, called the plan “desperate” and added: “Millions of families in the private rented sector with low savings and facing sky-high costs and rising bills, need far more ambitious plans to help them buy their own home.”

Read more: Why have the Tories turned on landlords?

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BTL Insurance refusals after fire damage claim?

admin    Uncategorized     agents

Does anyone have the same issues with insurers as I have? My insurance company has refused to renew my policy and every broker I have contacted since then comes back with the same reply – The Underwriters are unable to cover me.

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Councils are blocking nearly half of shops-to-houses conversions

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Applications to convert UK high street shops into living accommodation went up by 37% in 2020/21, but according to research from the law firm EMW, councils rejected nearly half of developers’ conversion plans.

A world-wide issue

Recent research by international property agents Savills indicates that there’s far too much retail space in the world.

The USA it is estimated has twice as much square footage in shopping centres per capita than the rest of the world, and six times as much space as countries in Europe. Savills thinks that more than one-third of shopping malls in the USA will have to close and that likewise the UK may be ‘over spaced’ for retail by as much as 40%.

The rise in the popularity of internet purchasing and home delivery would suggest that the problem of redundant retail space in may towns is likely to get worse not better. Covid-19 has resulted in an acceleration of the trend with inflation and the cost-of-living crisis adding further to the retailers’ woes.

Changing consumer priorities

A higher proportion of discretionary spend is now going on leisure experiences rather than discretionary purchases, which will have a knock-on effect to the way people shop and therefore the amount of retail space needed in the future.

The solution to much of the problem of dying town centres, according to Savills, would seem obvious: too much retail space means conversion to other uses.

Bringing back life into urban centres with retail to residential conversions – repurposing as it has become known – can be an effective strategy in turning around the decline and increasing consumer footfall. Converting space into leisure attractions, rebuilding town centres with residential as well as office space, means that towns centres, cities centres and shopping malls can be revitalised.

The most successful projects says Savills, “are those that emphasise social value, taking a whole-place perspective that includes social spaces, ‘blended living’ and offering convenience for people keen to minimise travel.”

The most successful re-purposing developments to-date appear to be from those landlords who are willing to adapt their financial and asset models to mixed-use – retail-office-leisure-residential – while combined with long-term sustainable development. Many older properties need to be upgraded to meet the new environmental standards in any case, so there’s a good opportunity to re-purpose as well.

Conflicting priorities

Local planning priorities are perhaps quite rightly slow to change and adapt, to ensure that these changes are appropriate for individual locations, long-term. But planners and developers need to work together to ensure that local priorities are met at pace, otherwise enthusiasm and investment will simply wither away. With almost half (45%) of all change of use applications rejected by local authorities, discouragement it seems is winning the day.

What’s more, recent Government plans for town centres and retail shops are to force landlords to let-out their shops – those vacant for six months or more – to be auctioned off to the highest bidder.

EMW principal Marco Mauro is reported as saying:

“Some local authorities are hesitant about losing too much commercial space. If too many shops are lost, the value of a high street as a destination is eroded, often permanently.”

High street shop units are increasingly being targeted for conversion into homes, but as Mauro points out, many councils are fearful their areas may become simply “dormitories” turning shoppers away.

While on average nearly 15% of high street retail units remain vacant, and in some towns that figure can be well more than double, action is clearly desperately needed. It is unlikely that much of the vacant retail space in some locations will ever be taken up commercially again, so that sad fact has to be faced up to.

Mauro points out that developers stand more chance of winning planning approval if they proposed mixed-use developments rather than concentrating solely residential schemes.

His advice to developers is to go for mixed-use developments rather than these solely residential projects, which have greater appeal for local planners.

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Retail property expert is scathing on Government’s High Street plan

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The Government’s latest plans to put new life back into Britain’s “dying” high streets are “short-sighted and raise huge concerns, that’s according to a North East retail property consultancy, @Retail.

The regionally based property consultants who claim to be “changing the face of the North East’s high streets,” seem to think that the Government is driving the wrong way up a one-way street with their latest proposals in the Levelling Up and Regeneration Bill.

In particular one of the 12 key “missions” that Michael Gove has unveiled in the Government’s flagship Levelling Up White Paper, aimed at shifting the government’s focus and resources to Britain’s “forgotten communities,” is giving powers to local authorities to force landlords to rent out long-term vacant properties to prospective tenants, such as local businesses or community groups.

One in every 5 shops vacant

The North East, along with much of Britain, has seen a large rise in the number of vacant shops, and in some locations this is above the national average.

The British Retail Consortium/Local Data Company study is the latest where worrying North East data comes at a same time that other parts of the country are seeing improvements as they start to recover from the pandemic.

It underscores the Government desire to take some drastic action. But, indicates Ian Thurlbeck, director at the Newcastle-based retail property consultants, @retail, the government is going up the wrong street with this Bill.

The @retail agency which offers advice on aspects of retail property, including High Street Agency, Shopping Centre Leasing, Investment, Development, Professional Services and a strategic retail Consultancy says: “We are unique in our ability to offer ‘on the spot’ advice from a team of local experts, all of whom are from the Region and have spent the majority of their careers immersed within it.”

Major concerns

The Levelling Up and Regeneration Bill raises major concerns – under the Bill, landlords will be compelled to let out retail units that have been vacant for longer than six months, says Mr Thurlbeck.

The Government’s aim is to quickly reduce the number of boarded-up shops, while at the same time create new opportunities for local small businesses and community groups, and help to increase footfall and spending in these North East town centres.

But Ian Thurlbeck has described the move as “an unrealistic proposal that fails to take into account regional differences.” He thinks that this will result in hundreds of empty properties being auctioned off to unscrupulous tenants.

Mr Thurlbeck comments further:

“This short-sighted scheme fails to address some fundamental issues, placing the burden directly on property owners and feeding off the general sense of mistrust by people in so-called ‘greedy” landlords.

“It raises many unanswered questions. For instance, what if the tenant who wins the auction is a rogue, pays none of the outgoings and trashes the property – who picks up the bill then? And do the local authorities tasked with running the auctions have the requisite experience and expertise? Will they be willing to take responsibility if things go wrong?”

Mr Thurlbeck thinks that there are now fewer retail operators requiring high street space than previously, but the perception that hundreds of North East high streets face terminal decline is simply untrue, he says.

“There is a popular misconception that our high streets are littered with empty shops, leading to a downward spiral of neglect, decay and blight. This is not the case and here in the North East, we see many high streets that are thriving and as busy as anywhere else in the country.

“Moreover, regional vacancy rates are in line with national trends and in our experience, high street retail activity in Newton Aycliffe, Durham City, Bishop Auckland, Peterlee, Chester le Street, Stanley, Consett, Seaham and Crook among other places, where we have lately updated the council with vacancy rates for these town centres, remains robust.

“There are pockets within some of these town centres where vacancy rates exceed the national average, but I would say that this is as much a national issue as it is a North East one.”

Mr Thurlbeck also has said that landlords should not be blamed for long-term retail vacancies landlords cannot afford to have their properties vacant for extended periods – in his experience, @retail has seen 99% of landlords keen to see their property let as soon as possible.

Further, he advises:

“The alternative is to suffer the cost of rates, repairs, insurance, security and maintenance. In our experience, most landlords faced with limited demand are prepared to agree short-term, rent-free leases with charities, local organisations and other groups, who can demonstrate they will be reliable and responsible occupiers. This helps to offset these costs while searching for a more sustainable solution.

“Indeed, landlords are often keen to mitigate their outgoings on vacant space and most of @retail’s clients who are faced with a lack of demand at market rents will let to charities and other organisations simply to mitigate rates.”

[Image: Tyne Bridge, Newcastle at night]

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