Issue No.145
UKLandlord The magazine of the National Landlords Association
JULY/AUGUST 2010
The UK’s Leading Property Women in this issue
How to react to the Emergency Budget
Know your HMOs
Regional investment hot spots
Expert advice on Ground Rents
Follow us at twitter.com/nationalandlord
EDITORIAL
UKLandlord July/August 2010: Issue 145 ISSN 1741 8801 Publisher’s statement: Circulation 22,500 PUBLISHER The National Landlords Association 22-26 Albert Embankment, London SE1 7TJ Contact > Simon Gordon, Head of Communications E: simon.gordon@landlords.org.uk EDITORIAL Editor > Andy Stern E: andy.stern@uklandlord.org.uk Managing Editor > Louise Gale E: editorial@uklandlord.org.uk T: 020 7722 4334 ADVERTISING & PRODUCTION For all enquiries and bookings: Advertising Manager > Steve Pearce E: advertising@uklandlord.org.uk T: 0117 330 8370 NLA CONTACTS Membership T: 020 7840 8937 (9am-5pm Mon-Fri) E: membership@landlords.org.uk Media Enquiries: T: 020 7840 8906 (9am-5pm Mon-Fri) E: press@landlords.org.uk General Enquiries and Correspondence with the NLA: 22-26 Albert Embankment, London SE1 7TJ T: 020 7840 8900 (office hours: 9am-5pm Mon-Fri) F: 0871 247 7535 E: info@landlords.org.uk www.landlords.org.uk Advice Line (NLA members only): Telephone number available from Members Area of www.landlords.org.uk Registered as a magazine © The National Landlords Association 2010. All rights reserved. No part of this publication may be scanned, reproduced, stored in a retrieval system, or transmitted in part or whole in any form or by any means – electronic, mechanical, photocopying, recording or otherwise – without prior permission of the National Landlords Association. The description of a product or service in this publication does not constitute an endorsement by the National Landlords Association. The Publisher does not accept any responsibility for any claims made by advertisers. Written and oral advice from the National Landlords Association or contained in this publication is given in good faith but no responsibility whatsoever is accepted by the Association or its Officers for the accuracy of its advice, nor shall the Association be held liable for the consequence or reliance upon such advice. All the articles in this publication are for general information only and are not intended to be advice to any specific person. Readers are recommended to seek professional advice before taking or refraining from taking any action on the basis of the contents of any article in this publication. ISSN 1741 8801 Printed on paper from sustainable forests. Please pass this magazine on to another landlord and then recycle. Design and Artwork by Rubicon Marketing Ltd 0117 330 8370
Welcome... I think I was not alone in fretting during the months of May and June when I heard news that the Coalition Government was planning to change the Capital Gains Tax rules! So I was relieved and immensely impressed by the NLA’s ability to rapidly respond to the situation and mount a massive campaign, joined by over 3,000 landlords, to alert MPs to the problems a tax hike on CGT presented for landlords. In this issue, we analyse the Chancellor’s Emergency Budget of 22 June and set out some ideas for how landlords can now manage their property rental investment business, in the light of the immediate increase in Capital Gains Tax, the rise in VAT to 20 per cent from January 2011 and the cuts to Local Housing Allowance that will affect many landlords. Professional business people will come to the fore in any economic climate, even one as uncertain as at present, and in the centre pages of this issue we celebrate the achievements of women in property across the land, with full coverage of the winners of the NLA Property Women Awards 2010. Canny investors will always look at different ways to develop their portfolios, and I hope our feature on the attractions and pitfalls of investing in ground rents proves useful – if managed correctly, ground rents can add to a landlord’s income stream. We also look at how to make sure an investment in HMOs can produce the higher yields generally associated with this type of rental property. NLA Director for the Regions, Barry Markham, is spearheading the NLA’s push for greater participation, networking and information for landlords at the local level. I hope our new Regional Overview section which is launched in this issue of UK Landlord provides interesting information on trends, developments and regional investment opportunities in different parts of the UK. As ever, your feedback is much appreciated. Best regards,
Andy Stern Editor andy.stern@uklandlord.org.uk
INTRODUCING THE NLA BOARD
Chairman & Interim Chief Executive David Salusbury
Director of Finance Patrick Jacobs
Director for Marketing Anthony Lock
Director of Operations Richard Price
Director for the Regions Barry Markham
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SPARE ADVERT
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CONTents
Inside this issue... NLA
FEATURES
04 04 CHAIRMAN’S MESSAGE
opportunities in Kent and other local landlord business news from across the UK.
29 THE UK’S LEADING PROPERTY WOMEN
A checklist of current obligations on landlords running HMOs, plus making your HMO more attractive to tenants.
14 FINANCE & TAX Tax changes from the Emergency June Budget and a new online insurance quotation website. 14 FINDING TENANTS Beware the tenant from hell, last operating in south London, accreditation trends in the North West and the perils of letting to those who control trafficked sex workers. 18 LANDLORD & TENANT RELATIONS New fact sheet on AST rental threshold increases plus Bournemouth County Court brings to an end confusion on the South Coast circuit over incorrect rulings on possession.
19 LOCAL HOUSING ALLOWANCE Reform of the LHA rated highest priority by landlords.
19 Safety in your Property Landlord jailed for fire and gas safety offences, a joint NLA/HSA website for landlord guidance on domestic gas safety and fire safety seminars.
46 BOOKS FOR LANDLORDS 48 MORTGAGE MARKET ROUNDUP
Member Services, including a listing of the NLA’s Recognised Suppliers.
60 Letters & EMAILS
12 Planning Government moves to stop building in gardens.
Housing Minister Grant Shapps scraps plans for English landlord register, Northern Ireland wants to establish one and the NLA says landlord registration in Scotland is not working.
45 STUDENT LETS: BUMP THE AGENT
34 HMOS: A REWARDING INVESTMENT IF YOU GET IT RIGHT
running a portfolio over 100 miles from home.
44 HEALTH & SAFETY: OHS LIMITED
12 BUYING & SELLING HIPs is now history and beware of property sourcing deals.
Our pull-out feature on all the winners from the NLA Property Women Awards 2010.
39 NLA MEMBER BENEFITS Take advantage of the full range of the NLA’s
36 PUBLIC AFFAIRS
12 LANDLORD PROPERTY MANAGEMENT
The income opportunities for landlords who buy ground rents, and the pitfalls to avoid when buying and managing them.
28 NLA MEMBER VIEWPOINT Joanna Jesson on the challenges of
50
A range of advice for PRS landlords on what to do next, with tips from Acklands accountants.
10 EXPERT ADVICE ON GROUND RENTS
Find out about the NLA’s Accreditation Scheme, landlord development courses and get an early bird discount on tickets for the NLA National Conference in London.
23 NEW REGIONAL OVERVIEW Landlord events, regional investment
08 HOW TO REACT TO THE EMERGENCY BUDGET
New rules on shared housing in England are already creating chaos for landlords and local authorities, and the NLA keeps up the pressure on LHA reform and CGT.
20 NLA NEWS
REFERENCE
08
NLA Chairman David Salusbury questions the extent to which the Coalition Government will take a joined up approach to housing.
06 NLA CAMPAIGNS
Analysis of trends and latest buy-to-let mortgage deals.
50 HOUSE PRICES & LETTING MARKET “I always have room in my portfolio to help someone in difficult circumstances. I have taken the chance on various people who maybe don’t tick all the boxes but whom you can see deserve another chance in life.”
Latest market statistics and surveys on house prices and lettings market plus auction analysis.
Juliet Ashton-Taylor, Winner of the NLA Property Woman of the Year 2010
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message from the chairman
July/August 2010
Is this the new joined up government?
The winners of this year’s NLA Property Women Awards are truly outstanding professionals. Our overall winner, Juliet Ashton-Taylor, lost everything when her marriage ended, and at one point was homeless. She built up a lettings business which transformed her life, and ever since has always kept a room free in her portfolio to help someone in difficult circumstances. The measures recently announced by the Chancellor in the Emergency Budget may well indicate that we will all need to apply the sort of determination shown by landlords like Juliet and the other remarkable award winners if we want a strong private-rented sector in the years to come. The Emergency Budget turned out to be a mixed bag for landlords and raises the question of the extent to which the Coalition Government will take a joined up approach to housing. Linking housing supply.... In his first days in office, the new Housing Minister, Grant Shapps, sensibly ditched the previous government’s plans to introduce a package of controversial and costly measures in England, such as a landlord register, mandatory written tenancy agreements, and a website to compare landlords. It was heartening to read Mr Shapps’s speech to Parliament confirming the private-rented sector is already regulated by a well-established legal framework, and that the Government has no plans to introduce any further regulation. The Minister is instead urging councils to use the powers they already have to tackle the minority
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of rogue landlords that blight some communities, provide a poor service to tenants and damage the reputation of the private-rented sector. Mr Shapps has also taken the opportunity to call for an immediate consultation on the ill-advised rules rushed in early this year to restrict planning applications for shared housing in England. The consultation should be completed by October, and the minister has flagged up the need to consider applying a more targeted approach by local authorities so that they only tackle areas specifically identified with problems from shared housing. This is a positive step, and until any new rules are in place we are contacting local authorities to suggest they carefully consider the impact of restricting planning consent to rental properties which will be used for shared housing. As is often the case in these situations, the devil will be in the detail and the NLA will be following this topic closely. While housing policy finally seems to be heading in the right direction towards supporting a viable private rental sector, it would seem that some new policies on taxation and welfare could undermine this course.
... with tax and benefits On taxation, although the Chancellor had listened to our concerns that a hike in Capital Gains Tax to 40 per cent would be bad news for the privaterented sector, the increased flat rate of capital gains tax from 18 per cent to 28 per cent for higher-rate tax payers will affect most landlords wishing to vary their portfolio, and probably the majority of landlords who supplement their income with their lettings. We feel the Chancellor missed an opportunity to make the distinction between long-term investment in residential property and short-term speculation.
Juliet Ashton-Taylor, NLA Property Woman of the Year 2010
He also missed an opportunity to give a boost to the property sector through a reduction in VAT for home repairs, maintenance and improvement works. Landlords planning renovations or refurbishment works may be well advised to get these done as soon as possible this year, before the 20 per cent VAT rate kicks in. At the same time, the NLA will continue to be part of the broad coalition of property sector organisations calling for reductions in VAT in this area. Welfare and benefit reform was inevitable in view of the economic crisis facing the country, and housing benefit is one of the largest burdens on the public purse. Nevertheless, capping and cutting local housing allowance rates may turn out to be, in our view, unwise and could have the reverse effect of driving public spending costs higher. If private-sector landlords consider the lower LHA rates economically unsustainable, particularly if their tenants are not able to make up any shortfall, they may well decide to leave the LHA market which could place local authorities under pressure to house tenants in relatively
expensive, and more than likely low quality, temporary accommodation. We would expect the Coalition Government to launch a proper consultation on this topic rather than rush through rules to cap and cut LHA. We very much hope that the forthcoming review of LHA rules will provide the Coalition Government the opportunity to show that it is in fact running a joined up government. Any reform of LHA should, as a minimum, allow landlords to be paid their rent directly by local authorities, rather than by the tenant, so that they can be sure to manage the finances associated with their rental properties. The inspiring story of Juliet Ashton-Taylor, NLA Property Woman of the Year, illustrates the extra mile that many landlords will go for their tenants, particularly tenants in difficult circumstances. We very much hope the new Government will take an integrated approach to housing so that landlords like Juliet can continue to show their extraordinary dedication to tenants and commitment to providing excellent service.
The inspiring story of Juliet Ashton-Taylor, NLA Property Woman of the Year, illustrates the extra mile that many landlords will go for their tenants.
For more information, please contact the National Landlords Association on 020 7840 8900 or visit: www.landlords.org.uk
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NLA CAMPAIGNS
Find out here about the NLA’s latest campaigns to encourage the Government to achieve a healthy private-rented sector. Confusion over HMO planning The new Housing Minister, Grant Shapps, has written to the NLA to confirm that the Government will review the planning rules in England for Houses in Multiple Occupation (HMOs) to ensure the planning system is “tailored to local circumstances” rather than imposed where no regulation is needed. Minister Shapps has announced he will launch a consultation designed to ensure new rules work effectively for local people without placing an unnecessary burden on landlords and local planning authorities. It is likely local authorities will be asked to apply the recent shared housing planning rule changes only to areas where high concentrations of shared housing are causing problems. Until any new measures take effect following the consultation, the NLA is calling on local authorities to implement the current planning rules carefully so that they utilise shared housing to help meet their local housing
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needs and do not inadvertently decrease the availability of much needed accommodation. Local authorities require different proof In the meantime, landlords will continue to operate in what is already proving to be a confusing environment created by the new Use Class for HMOs. From 6 April 2010 any residential property in England let to three or more unrelated sharers, forming two or more households, will be deemed to be an HMO in planning law. This includes shared houses, flats and bedsits, whether or not the occupiers have signed one tenancy agreement or have individual tenancy agreements. The new planning class order means that landlords are going to lose time, money and flexibility if they want to rent out their properties to more than two people as they will now have to apply for planning permission to turn the property into an HMO. Implementation of the new Use Class for HMOs has already thrown up inconsistencies. Landlords who
have been letting a property to three to six unrelated sharers as at 5 April 2010 will have an established right to continue to let their property in this way from 6 April 2010, even if the property is let to new tenants after this date. However landlords seeking to prove their rental property was let as a shared house before 5 April 2010 are being asked to provide completely differing evidence by different local authorities. In Birmingham, a tenancy agreement is deemed sufficient, whereas in Newcastle, landlords need to present a certificate of lawful development. The NLA has stressed the importance for local authorities to continue to engage with landlord organisations like the NLA to help tackle the problems associated with some HMOs, “rather than trying to impose rules across the board which seriously limit this much needed form of housing.”
Landlords revolt on CGT More than 3,000 landlords joined the NLA’s campaign and wrote to their MPs to raise awareness of the dangers of ill-considered Capital Gains Tax reform. In response to the measures announced in the Emergency Budget of 22 June 2010, NLA Chairman David Salusbury commented: “Although it is disappointing that the Chancellor has failed to recognise the distinction between long-term investment in residential property and
short-term speculation, the immediate increase is not as high as the trailed 40 per cent. Nevertheless, the increased rate will affect the vast majority of landlords who supplement a modest income with their lettings activity.” The flat rate of 18 per cent on capital gains on non-business assets was replaced by a 28 per cent rate for higher rate tax payers as of midnight on 22 June, while the rate for lower rate tax payers (currently
those earning up to £37,400) stayed at 18 per cent. The NLA had called on the Treasury to recognise letting as a legitimate business so that capital gains from the sale of residential property would be included as one of exemptions to the tax that were promised by the Chancellor in May and early June.
Holding the Conservatives to their LHA pre-election promise Following the General Election, the NLA has been working hard to ensure that the Conservative Party sees through its commitment to restoring the tenant’s right to request direct payment of Local Housing Allowance to their landlord. The NLA is also reviewing the impact on landlords and the housing market of cuts to housing benefits announced at the recent Emergency Budget.
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Feature – What the Emergency Budget means for landlords
Tough but fair? What the Emergency Budget means for landlords UK Landlord editor Andy Stern analyses the key budget announcements affecting landlords, and considers what action we can take now in order to organise our lettings business in a tax efficient way. As widely anticipated, the Chancellor’s Emergency Budget of 22 June 2010 included significant spending cuts to public sector departments and benefits, including caps on housing benefits. At the same time, the Chancellor announced increases in taxes that will have an impact both on landlords’ day-to-day business and also on their realisation of capital gains tax if they decide to sell a property. The Chancellor seems to have pulled off a successful and credible budget that will both persuade the financial markets the Government has a serious plan to tackle the country’s budget deficit and get UK plc back on the road to recovery. Indeed, as well as tax rises, the June Budget included a commitment to reduce the small company tax rate to 20 per cent and to extend entrepreneur’s relief life time limit from £2m to £5m, both clear indications that the government sees future growth will come from the private sector and that it is committed to fostering this growth. However, there are a number of areas where the Budget will certainly increase costs and taxes for landlords. Particular challenges for landlords will come as a result of cuts to Local Housing Allowance and increases in Capital Gains Tax.
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CGT rises to 28 per cent The headline news for many landlords was that Capital Gains Tax (CGT) for higher rate tax payers rose from 18 to 28 per cent as from 23 June, and that it will remain at 18 per cent for lower rate tax payers. Anyone hoping this means that you can pay 18 per cent on a taxable gain of say, £1m, if they are a lower rate tax payer, will be disappointed by the wording of the Budget which states that “capital gains tax will rise from 18 to 28 per cent for those with total income and taxable gains above the higher rate threshold.” Roger Harding of Acklands Accountants explains: “If you are a lower rate taxpayer you will pay CGT at 18 per cent on the amount still within your basic rate tax band (currently £37,400 2010/11 which will be reduced to £34,900 2011/12). Any gain remaining above the basic rate band will be taxed at 28 per cent. Therefore a property sold for £1m will be mainly taxed at 28 per cent CGT.” So the news for lower rate tax payers is good, up to incomes and gains within the basic rate tax band threshold, but after that, not all that good! Since the new rules were in place as at midnight on 23 June, selling up to avoid the
higher rate of CGT is not an option, although husbands and wives can shift ownership of assets to obtain the best rate possible. “There is no CGT disposal on passing assets between spouses,” explains Harding. “Therefore if you are planning to sell a second home or buy-to-let you should ‘crunch the numbers’ to see what can be achieved, not forgetting that each spouse has their own annual CGT exemption of £10,100, which was widely tipped to be drastically reduced. Thankfully it wasn’t.” VAT rises from 17.5 to 20 per cent The VAT rise, although widely expected, will nevertheless hit landlords’ bottom line pretty hard (and to be fair everyone in the country will share the pain). For landlords it will increase maintenance, repairs and replacements costs from January next year, and for those who use agents, it will add to the cost of paying agents tenant finding and management fees. Since the Chancellor has given advance notice of these increases, anyone planning major purchases or works to their properties are advised to bring these plans forward to the next six months, before the higher rate of VAT kicks in.
Housing benefit cut George Osborne’s announcement that Local Housing Allowance (LHA) rates will be capped is likely to have long-term and serious consequences for many landlords providing accommodation to housing benefit tenants. The new rates will mean that from April 2011 LHA will be capped at £250 per week for a one-bedroom property, £290 per week for a two-bedroom property, £340 per week for a three-bedroom property and £400 per week for a four-bedroom or larger property. Following that, as from October 2011, LHA rates will be set at the 30th percentile of local rents, as opposed to the current system where LHA rates are equivalent to the median market rent for PRS properties. The Chancellor believes this will result in savings of £65m in 2011-12, £365m in 2012-13, £415m in 2013-14 and £425m in 2014-15. However, as Vincenzo Rampulla of the NLA’s Policy Unit points out, this will represent “a very painful 20 per cent cut.” He adds “Tenants already struggling to find landlords willing to take on LHA tenancies will now find themselves excluded from 70 per cent of their local housing market.” Housing Benefit awards will also be reduced to 90 per cent of the initial award after 12 months for claimants receiving Jobseeker’s Allowance. This will be introduced in April 2013. In line with its commitment to protecting the most vulnerable in society the Government will increase by £40m the discretionary housing payments’ budget for hardship cases. The cost of an additional room for those claimants with a disability who need a carer will also be covered in future. All in all, these changes are likely to hit landlords hard. The capping of LHA in April will particularly affect landlords where market rents are relatively high. However, the cuts to LHA payments which follow in October 2011 will hurt landlords hardest, especially in areas of low demand where the majority of tenants are typically LHA claimants. Many landlords are now faced with either: • reducing their rents: in most cases this is likely to be financially unsustainable; • asking their tenants to make up any shortfall: not a very useful option given that under the existing system nearly half of LHA tenants already have a shortfall of almost £100 per month; or • looking to rent to non-LHA tenants: this is going to be the most likely option except in areas of high unemployment, where finding suitable professional tenants may be all but impossible.
Unfortunately the effect of private-sector landlords leaving the LHA sector will not help local authorities meet their housing demands and the risk is that Local Housing Allowance tenants will have less choice when it comes to good quality, affordable accommodation. In addition, there is a strong chance that communities will become less mixed and vulnerable, low income or unemployed tenants will have no option but to rent in the poorer areas of towns and cities. The Chancellor indicated that the new caps are needed because the cost of benefit payments had risen 50 per cent to £21bn over the last ten years, pointing out that as country we now spend more on housing benefit than on the police and universities combined and that the changes in his Budget package would cut the overall cost of housing benefit by £1.8bn a year by the end of the current Parliament. Critics of the Chancellor’s Budget speculate that he may find that the long-term financial savings from capping and cutting housing benefits will be outweighed by the financial consequences of more homelessness, more involvement of social services and higher costs from temporary accommodation. The NLA’s analysis Chris Norris, NLA Policy Manager writes: Osborne’s Budget announced cuts across the board, but housing benefit looks amongst the worst hit, meaning that landlords and tenants will be hit hard. The caps due to be introduced in April next year will have a dramatic impact in a small number of high-rental areas meaning that some landlords will need to re-assess their attitude towards benefit recipients. However, it is the broader changes to how LHA rates will be calculated in the following October which may leave the market reeling. The data used to calculate local LHA rates are to be reduced from the 50th to the 30th percentile. While the impact of this will vary from area to area, and we await publication of the full data sets, this is likely to have a devastating effect on a great many landlords operating margins and in some cases their ability to meet their own mortgage commitments. This change will affect landlords and tenants alike and the NLA will work to ensure that landlords are not disadvantaged by any reduction in LHA rate.
Allowances will be reinstated for holiday lets The Chancellor confirmed that the previous Government’s plans to repeal the special tax rules for furnished holiday lettings will not be implemented, news that will be welcome to all those in the sector. It is worth keeping an eye on this though as it looks as if this tax treatment will deteriorate next year. Mr Osborne says that the Government will consult over the summer on a proposal to ensure the tax rules meet EU legal requirements in a fiscally responsible way, by changing the eligibility thresholds and restricting the use of loss relief. It is understood the Government will look at increasing the number of days for which a property must be available and let, as well as restricting tax relief for losses against other income. Any changes will take effect from April 2011, and in the meantime the current rules continue to apply for the 2010-11 tax year. Under the present system, tax breaks for holiday lets will apply only if the property is: fully furnished, available for letting for at least 140 days per year and actually let for at least 70 days per year, and let at a true market rent (not a reduced rate for family or friends). Any single continuous period of letting must also not exceed 31 days in any period of seven months and the owners cannot claim tax benefits when they themselves are using the property. If all these conditions apply to a property, HMRC recognises income generated from a holiday let as earned business income, unlike other property lets which are taxed as investment (unearned) income. Expenses relating to the business can be claimed against income tax. Furnished holiday lettings may be eligible for the new entrepreneurs’ relief, which taxes at an effective rate of 10 per cent any gains made of up to a limit of £5m (raised by the Budget from £2m), but only if a whole or part of the business is disposed of. Some readers may consider the tax treatment of the furnished holiday lettings sector makes it an attractive possible addition to their buy-to-let portfolio. Tax on companies reduced NLA members who hold some or all of their investment portfolio in a company will be pleased by the announcement that the small companies’ taxation rate will be reduced from 21 per cent to 20 per cent with effect from 1 April 2011, rather than rising to 22 per cent as planned by the previous Government. The main rate of corporation tax will be reduced from 28 per cent to 24 per cent over four years. A one per cent reduction to 27 per cent will be implemented from 1 April 2011.
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Feature: EXPERT OPINIONS
Expert advice on buying ground rents What are the attractions and downsides of buying ground rents? Lawyers from two legal specialist law firms, who are part of the NLA’s Recognised Supplier Scheme, explain the potential of ground rent to generate income and the responsibilities that owning them entail. UK Landlord: What makes buying ground rents an attractive investment for some? Caroline Havers, Salans: The benefits of ground rent payments are that they are consistent, the amount payable is set out in the lease and will usually provide for increases in the amount over the term of the lease and is not dependent on the volatility of the equity market or the interest rates. In addition to an income from the ground rents, a freeholder can realise the value of the property at the end of the lease although this requires a long term investment strategy. John Midgley and Nikki Wood, Seddons: It is a legal obligation for the lessees to pay the ground rent therefore receipt is almost guaranteed and the risk of losing initial capital is low. Although ground rents are usually for a low value, multiple freeholders may benefit from economies of scale. In addition to receiving the ground rent, it is possible for a freeholder to charge for additional items if the lease provides for this. Common chargeable items may include: • Licences to assign, payable when a leaseholder transfers their property; • Notice of subletting or notice of charge, payable when the lessee has transferred, sublet or mortgaged the property; • Management information packs; or • Management expenditure incurred in maintaining or repairing the building, the costs of which are recoverable via a service charge.
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UKL: What are the pitfalls to avoid when buying ground rents? Seddons: In general, avoid purchasing freeholds with significant ground rent arrears. Whilst the landlord may have the ability to forfeit the lease for non-payment of ground rents so that the property may be returned to the landlord, there are relatively new rules restricting a landlord’s ability to forfeit and the ability to make a ‘windfall gain’ occurs much less frequently. The freeholder must be aware that even if a lease states that ground rent is payable whether demanded or not, there are now statutory rules which state that a prescribed ground rent demand must be served before the rent is legally due. The landlord cannot begin any legal steps for recovery of the rent, including action for forfeiture and possession, unless he has previously served the demand in the correct format, given the correct period of notice, and the leaseholder has failed to respond. The amount of the ground rent should be verified in the lease to ascertain whether it is escalating. Landlords may also wish to consider whether the lease considers the impact of inflation on the value of the ground rent through the retail pricing index (RPI). This is especially important for a long lease. The lease should be reviewed to ensure that the potential freeholder is aware of their rights and responsibilities. The financial implications of any responsibilities for repair and management of the property should be carefully considered and a survey may be advisable.
Caroline Havers, Salans
John Midgley, Seddons
It is possible for a freeholder to charge for additional items.
Feature: EXPERT OPINIONS
UKL: Where do investors typically buy ground rents and what advice can you give investors thinking of doing so for the first time? Salans: As part of a decision whether a ground rent portfolio is a worthwhile investment, knowing how to value the asset is important. The value is based on a combination of the factors, the most important being the passing income and the remaining length of the lease term, although other factors such as rights to increase the ground rent charge, and the extent of ancillary services provided by the freeholder will play a part. As with any purchase, understanding the value is very important and could be a pitfall for those who are new to this area. In addition, there is the legal aspect to be considered, with the lessees having the right of pre-emption (the right for the leaseholder to have the first opportunity to buy the freehold and therefore the ground rent, before it is offered to a third party). The legal process may dissuade those without experience from entering this market, as the cost of obtaining professional advice may make the
investment uneconomic if it is a one off rather than a long term business strategy. Ground rents can provide a stable income stream, but for those who are new to this area, there are aspects that need careful research or advice before an investment is made. Seddons: Freeholds and therefore the right to receive a ground rent are very commonly bought at auction. Consider whether the freehold is being purchased for the rental income stream only or for the capital gain attributable to potential appreciation of the value of the freehold. If the freehold is being purchased for the rental stream only, then a calculation should be made to ensure that the return will be higher than alternative investments of a similar risk profile. Endeavour to buy a short lease; therefore fees can be incurred for extending the term. Ascertain whether there is a management company responsible for the freehold, either formed by the tenants, or through an independent company. The existence of a management company may relieve repair and management obligations however it will reduce the amount of additional income which may be charged for these services.
In addition to an income from the ground rents, a freeholder can realise the value of the property at the end of the lease.
Member Feedback Have you encountered problems when buying ground rents? If so please send an email outlining your experiences or advice to editorial@uklandlord.org.uk
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LANDLORD property management INFORMATION This section is intended to provide assistance to landlords throughout the life-cycle of buying, renovating, letting and selling a property. It also contains practical and technical information aimed to help landlords maintain their properties effectively and in compliance with the law.
Buying & Selling HIPs consigned to history The property market was spurred briefly recently following the announcement on 20 May by Housing Minister Grant Shapps of the end of Home Information Packs. Property website Rightmove reported new listings on its site rose by 35 per cent in the seven days following the announcement about HIPs, and the Royal Institution of Chartered Surveyors noted a “sharp increase” in new instructions from would-be sellers. Introduced in 2007 in England and Wales, the
aim of HIPs was to speed up the house selling process by forcing sellers to provide much of the required conveyancing information when properties are first put up for sale. However, the process created additional red tape and expense for all homeowners who had to fork out for title deeds and local searches. The Government will continue to require vendors to supply an energy performance certificate which is already an obligation for landlords letting out property.
Property sourcing deals The Ahuja Group, a property sourcer, is being sued by a number of property investors for failing to refund them when deals do not take place. Landlord Action has been instructed on over twenty cases against the company to
recover thousands of pounds paid in upfront fees (£3,000 per property) for below market value property deals which turned sour. Paul Shamplina of Landlord Action warns other property investors that the deals were not completed for reasons such as the yields
Planning FMB condemns ban on building in gardens The Government’s decision to give councils in England greater powers to stop developers building homes on gardens will prevent the building of much-needed new housing, and does not address the more serious and fundamental issue of tackling the current housing shortage, according to the Federation of Master Builders (FMB). The FMB argues that Government’s pledge to reclassify gardens, currently in the ‘brownfield’ planning category used for ex-factory and railway land, will further limit the supply of new housing at a time when there are over 4.5 million people on social housing waiting lists and thousands
12 UKLANDLORD JULY/AUGUST 2010
more families unable to get on the housing ladder. Brian Berry of the FMB said: “Reclassifying all gardens will inevitably mean even more pressure to build on the Green Belt and the countryside. What is needed is a comprehensive review of the planning system to look at how we can allocate more land for housing. A review of all the barriers to house building would have been a better and more constructive start rather than targeting one particular issue which will do nothing to help the majority of people wanting a home. “
were not as advertised, clients were unable to obtain finance since the property was not as described or because of the state of the property, and the so-called ‘discounts’ were not real.
UKLANDLORD JULY/AUGUST 2010 13
LANDLORD property management INFORMATION
Finance & Tax Emergency Budget raises CGT to 28 per cent Although the emergency budget of 23 June brought relief to landlords who feared that the rate of Capital Gains Tax might rise as high as 40 or 50 per cent, the Chancellor’s first budget will prove sober reading for everyone in the UK, including those in the privaterented sector. The Chancellor’s announcements included the following points that will have a particular impact on landlords: • Capital Gains Tax for higher rate tax payers rose from 18 to 28 per cent at midnight on 23 June, and will remain at 18 per cent for lower rate tax payers
• • • • •
VAT will rise from 17.5 to 20 per cent from 4 January 2011 Local Housing Allowance rates will be capped from April 2011 and payments will be reduced from October 2011. Allowances will be reinstated for holiday lets The small companies taxation rate will be reduced to 20 per cent Corporation tax will be cut to 27 per cent next year, and by 1 per cent a year for the following three years taking it to 24 per cent by 2014
For more information about the Emergency Budget and what it means for landlords, read the feature story on page 8 of this issue. George Osborne MP, Chancellor of the Exchequer
New online insurance quotation service Hamilton Fraser Insurance has launched a new website that includes an easy-to-use quotation facility to meet the demands of the industry’s growing online audience. A quick quote facility enables landlords to get an indication of their buy-to-let insurance premium within minutes. They can then continue to complete a full quote and buy their policy online with minimal fuss. To celebrate the launch, Hamilton Fraser is offering a 10 per cent discount to all new customers who buy a landlord policy online before 30th July 2010. Mike Glanvill of Hamilton Fraser Insurance advises that landlords with larger portfolios
we have limited the number of properties a landlord can insure on-line under a single policy to 5, as we feel that landlords with larger portfolios will not want to spend their time inputting all of their properties. Also, there really is no substitute for discussing a landlord’s larger portfolio requirements over the phone as there is often greater flexibility of cover and premiums with larger policies.” will still benefit from talking to Hamilton Fraser on the telephone: “Our improved website will now enable our customers to get a quote and buy online at a time that suits them. Currently
Hamilton Fraser is an NLA Partner. To view the new website go to www.hamiltonfraser.co.uk or for more information call 0800 63 43 880.
Finding Tenants Accreditation in the North West Tom Reynolds, NLA Regional Representative in the North West, reports that there is a concerted move on accreditation matters in his patch. Knowsley Borough Council started a scheme from scratch at the end of May which will be a standalone property basedscheme, intended ultimately to join up with schemes in Liverpool, Sefton and Wirral to become a Merseyside Scheme. Cheshire West and Chester Borough Council is also commencing a landlord- based scheme as is Warrington Borough Council.
14 UKLANDLORD JULY/AUGUST 2010
They will join with Cheshire East and Halton Borough Councils to create a Cheshire Scheme. The separate schemes run by the ten boroughs of Greater Manchester are to be merged in to a single scheme called the Association of Greater Manchester Authorities (AGMA) scheme. For more information about the NLA’s Accreditation scheme, see page 21.
Tom Reynolds, NLA Representative, North West
UKLANDLORD JULY/AUGUST 2010 15
LANDLORD property management INFORMATION
Finding Tenants Tenant divides properties into bedsits
Paul Shamplina, Landlord Action
Landlords with properties in south London have been stung by a tenant who not only fails to pay her rent but also converts the rental properties into bedsits which are then sublet without their knowledge. NLA Recognised Supplier, Landlord Action, has recently evicted the tenant who goes by the name of Rose Chimuka, or Emily Mapera, Emma Magonna or Rose Maetune. The woman, who is believed to hail from Zimbabwe or South Africa, presents herself as the wife of a man in well-paid employment and the mother of three children. Ms Chimuka is understood to be a repeat offender, having done this at least five times
and is currently on the run from police. Paul Shamplina, of Landlord Action, says the case underlines the importance of obtaining and checking tenant references and that verbal references or verbal assurances by letting agents or reference agencies should never be accepted. “Everything must be in writing and you must insist on seeing photo ID of all those named on the tenancy agreement,” said Paul. “If you suspect that subletting is taking place, take legal advice immediately.” For information about the NLA’s Tenant Check service, see page 42.
Making sure your property is not used as a brothel Landlords can get advice on avoiding criminal activity taking place in their rental property from the Purple Teardrop Campaign, a charity set up to create awareness of sex trafficking. Mar Godfrey, a trustee of the charity, who recently spoke to landlords at the Dorset branch of the NLA, confirms that brothels tend to operate out of rented residential premises. She recommends NLA members are careful who they let to and to telephone Crimestoppers on 0800 555 111 if they suspect any illegal activity may be taking place in their property.
For more information, see www.purpleteardrop.org.uk
Avoiding voids Upad, the online lettings service, has published an online booklet, Avoiding the Voids, designed to help landlords keep their properties let and avoid costly periods where the property is unoccupied. According to Upad, £3bn in rental income is lost every year by landlords in this country due to their property standing empty. This works out to an average of £1,000 for each property, or around half the net profit of the average landlord. The ebooklet includes twenty tips on how to avoid voids, such as advertising as soon as current tenants give notice, using photos
16 UKLANDLORD JULY/AUGUST 2010
to market properties, asking a reasonable rent, keeping the property in good condition and making sure tenants are happy in the property. The ebooklet is available free of charge from www.upad.co.uk/blog/2010/02/ avoid-the-voids-get-our-free-ebook/
*Offer valid until 31st August 2010 - on first order only.
UKLANDLORD MAY/JUNE 2010 17
LANDLORD property management INFORMATION
Landlord & Tenant Relations Court confirms possession powers Bournemouth County Court recently put an end to the spate of inconsistent possession rulings being applied by local courts on the South coast when it confirmed that courts have no powers to extend the statutory 14 days’ possession period, unless exceptional circumstances apply in which case this can be extended up to a maximum of 6 weeks. Allowing an appeal by landlords Mr and Mrs Robinson, who had been trying to regain possession of their property since October 2009, Judge Bond said that the District Court judge did not in fact have the power to suspend the bailiff’s warrant, which had been requested by the tenants, thereby extending
the possession period. Deputy District Judge Haddow controversially referred to the Human Rights Act, which he believed required him to behave reasonably in enforcing his Order for Possession. Unfortunately this judgement was applied to other similar cases on the South coast circuit, creating considerable confusion about the law as well as huge financial losses for landlords. John Bridger of Prestman Redman Solicitors, who is acting for the landlords, sought an appeal of the decision by the District Judge on the basis that it was incorrect as the court had no power to make such orders under Section 89 (1) of the
New fact sheet on AST threshold The NLA has updated its advice to landlords following the increase in the Assured Shorthold Tenancy (AST) threshold from £25,000 to £100,000 per year. The new threshold is expected to come into effect from 1 October 2010 and will apply retrospectively. This means that any new or existing tenancies with a total annual rent of £100,000 or less, will become an AST by default (provided no other relevant exemption applies). This change is most likely to affect large shared houses (where tenants have signed one tenancy agreement), family homes and
luxury lets, where the annual rent exceeds £25,000. Landlords affected by this change will need to make sure any tenancy deposits are protected and will only be able to legally terminate the tenancy by using the Section 8 and Section 21 possession routes. Only deposits taken in relation to tenancies set up on or after 1 April 2007 will need to be protected. Landlords are advised to check their position where they have tenancies that are currently not ASTs but which fall within the increased rental thresholds.
Housing Act 1996. Judge Bond confirmed that although the deputy district judge was doing the best he felt he could in the circumstances to help the tenants, “he fell into error. He simply did not have the power to extend the operation and execution of the warrant in the way he purported to do.” Mr Bond also said that he was not aware of any pronouncement to the effect that S.89 was incompatible with the Human Rights Act. For more information about this case, telephone John Bridger on 01202 292424. The case references are Robinson v. Cackett, case number 9PHO2979.
1 in and 1 out at The Dispute Service Martin Partington, QC has replaced John Hornsey as Chairman of the Dispute Service, the organisation which runs the Tenancy Deposit Scheme, one of the three Government-approved tenancy deposit schemes. Lawrence Greenberg, the Independent Case Examiner, has also stepped down “to pursue other interests” according to a TDS announcement. The appointment of Professor Partington, a former Law Commissioner, follows turbulent times for the TDS, which earlier this year announced controversial increases to the fees it charges agents, and which has now lost two major clients, LSL plc, parent company of Your Move and Reeds Rains, and Countrywide. These agencies have shifted their business to my|deposits, the insurance-based scheme owned jointly by the NLA and Hamilton Fraser Insurance, which has not increased its fees. my|deposits remains the only scheme specifically designed for landlords and agents to hold deposits themselves. For more information about my|deposits, see www.mydeposits.co.uk
18 UKLANDLORD JULY/AUGUST 2010
LANDLORD property management INFORMATION
Local Housing Allowance LHA reform tops landlords’ wishlist Reform of Local Housing Allowance rules is rated as the highest priority by landlords in a recent straw poll carried out by the NLA. This was closely followed by a desire to speed up possession hearings. NLA Focus asked landlords to rank in order of importance issues which the new Government should concentrate on. If you want to participate in future landlord surveys carried out by the NLA, send an email with your full name to policy@landlords.org.uk, or check announcements on the NLA’s Facebook group and Twitter.
Safety In Your Property Landlord jailed for 30 months for fire safety offences A landlord has been jailed after a fire in one of his properties left a young woman so badly burned that doctors thought she was unlikely to survive. The fire broke out in the tenant’s bedsit, part of three adjoining houses in multiple occupation above retail premises in Norwich. The tenant, Layla Skalli, was unable to escape because her sash window could only be opened by 4 inches and the staircase was blocked by thick black smoke. Firefighters used a ladder to smash the window and climb inside, where they found Miss Skalli unconscious on the floor with her hands covering her face – the only part of her not burnt by the intense heat. The court heard
how Miss Skalli suffered 80 per cent deep tissue burns on almost all the skin below her neck. Other tenants were either rescued by firefighters or had to climb down a drainpipe to escape. The prosecution was brought jointly by Norfolk Fire and Rescue Service and the Health and Safety Executive. Norwich Crown Court heard how the landlord, Michael Billings, failed to provide a working fire alarm, an adequate number of fire doors, and adequate means of escape. In addition, gas appliances in the properties had not been serviced or properly inspected. Mr Billings pleaded guilty to breaches of article 8 (duty to take general fire precautions),
article 13 (firefighting and fire detection) and article 14 (emergency routes and exits) of the Regulatory Reform (Fire Safety) Order 2005 for each of the three neighbouring properties, and was sentenced to 13 months’ imprisonment for these offences. The rest of the sentence was for offences under the Health and Safety at Work Act etc 1974 and the Gas Safety (Installation and Use) Regulations 1998. The HSE’s John Claxton said: “This is the most distressing case I have worked on during my 31 years as an HSE inspector. Michael Billings failed in his basic duties as a landlord and those failures nearly cost the life of a young woman.”
Domestic gas safety website for landlords All the information landlords need to meet their legal duties on domestic gas is now available in one place thanks to the launch of a new website in May by the Health and Safety Executive (HSE), with support from the NLA. The site is intended to serve as a one-stopshop to help landlords understand what they should be doing to keep tenants safe in any properties they let, presenting the information in easy to use sections including repair and maintenance, annual gas safety checks and record keeping as well as giving answers to frequently asked questions. Fifteen people died from carbon monoxide
(CO) in 2008/09 from poisoning associated with domestic gas appliances, due mainly to gas appliances having been badly fitted or poorly serviced. By law, all landlords are required to arrange for a Gas Safe registered engineer to check all gas appliances and flues within 12 months of being installed and then at least every twelve months. They are also required to complete any necessary maintenance and repairs of gas appliances, flues and pipework. The address for the microsite is www.hse.gov.uk/gas/landlords/index.htm
UKLANDLORD JULY/AUGUST 2010 19
nla landlord development
For the latest news visit: www.landlords.org.uk
Portable Appliance Testing for Landlords This course is designed for landlords wishing to carry out safety checks on the electrical appliances they provide for their tenants. Testing equipment will be available for delegates to gain practical experience and the trainer can explain all that is necessary in the domestic situation.
Price: £150 (including VAT) for members and £175 (including VAT) for non-members. To reserve a place: Charlotte Clements on 020 7840 8920 or booking@landlords.org.uk
New Courses To reserve a place: Charlotte Clements on 020 7840 8920 or booking@landlords.org.uk
Possession One-day course on Possession, with practical workshops on filling in the forms and notices: Price: Members: £85 (inc VAT) Non-members: £110 (inc VAT) 2010 DATES
LOCATION
LOCATION
Friday 24th Sept
Leeds
Brighton
Wed 29th Sept
London
Tuesday 26th October
Birmingham
Wed 29th Sept
Birmingham
Tuesday 12th October
London
Tuesday 2nd November
Bournemouth
ALL TIMES: 9.00am start; 5.00pm finish
Thursday 4th November
Edinburgh
Wednesday 17th November
Leeds
Deposits, Damages & Disputes
Tuesday 7th December
Glasgow
Tuesday 7th December
London
Half-day course on Deposits, Damages and Disputes, incorporating Inventories and how to deal with disagreements: Price: Members: £40 (inc VAT) Non-members: £55 (inc VAT)
2010 DATES Tuesday 5th October
ALL TIMES: 9.00am for 9.30am start; 4.30pm finish
Landlord Foundation Courses The NLA runs one-day courses designed to help both new and experienced landlords to develop their professional skills. The course focuses on the main issues facing landlords, including: • finding tenants • setting up • managing and ending a tenancy • keeping records • repairing obligations The programme offers an excellent opportunity to network with other landlords and discuss face-to-face ideas, problems and possible solutions.
Price: Members £85 (including VAT), non-members £110 (including VAT) To reserve a place: Charlotte Clements on 020 7840 8920 or booking@landlords.org.uk
LOCATION
Thurs 23rd Sept
Leeds
Tues 28th Sept
London
Tues 28th Sept
Birmingham
ALL TIMES: 1.30pm for 2.00pm start; 5.30pm finish
Local Housing Allowance Half-day course on Local Housing Allowance, what to be wary of and how the system can work for you: Price: Members: £40 (inc VAT) Non-members: £55 (inc VAT)
2010 DATES
LOCATION
Thursday, 9th September
Hastings*
Friday, 24th September
Slough*
Wednesday 20th October
Nottingham
Tuesday 23rd November
London
*NLA accredited Foundation Course
ALL TIMES: 9.00am for 9.30am start; 4.30pm finish
20 UKLANDLORD JULY/AUGUST 2010
2010 DATES
2010 DATES
LOCATION
Thurs 23rd Sept
Leeds
Tues 28th Sept
London
Tues 28th Sept
Birmingham
ALL TIMES: 8.30am for 9.00am start - 12.30pm finish All in a day’s work The 2 half-day courses on LHA and Deposits, Damages & Disputes can be followed on the same day.
NLA NEWS
For the latest news visit: www.landlords.org.uk
NLA Accreditation NLA Accreditation for landlords is now being rolled out across the UK. The scheme was launched by the NLA in response to requests by many members for a central, nationally recognised scheme. NLA Landlord Accreditation is based on landlords’ professional development rather than assessing their property portfolio. Gaining accreditation Accreditation enables responsible landlords to promote their services as a ‘good landlord’ to tenants who can easily verify their commitment to ongoing professional development and the highest standards in their lettings business. NLA Accreditation starts with the Foundation Course and the requirement to sign up to the schemes rules. The Foundation Course can be done in attendance for a fee or online for free (via the NLA’s Landlord Library www.landlords.org. uk). Landlords are then required to continue their professional development (CPD) again either online or via attendance-based events such as NLA
branch meetings and local authority events. NLA members who are interested in completing the Foundation Course online can do so by completing all of the CORE subjects that are highlighted in blue. There is also an Accreditation user guide on the front page of the library. Landlords who have already completed the NLA Foundation Course, or all of the core subjects on the NLA Landlord Library, may be eligible for accreditation under the NLA’s scheme. Landlords who have followed a similar scheme such as the London or Midlands scheme in the last five years may also be eligible to be ‘passported’ on to the NLA scheme. Working with local authorities Accreditation offers a way to recognise quality standards of management in the private-rented sector. The focus of NLA Accreditation is on recognizing and improving the professionalism of landlords, which in turn will improve the quality of privately-rented properties. According to Richard Price, NLA Director of Operations,
“NLA Accreditation is rapidly becoming a mark of excellence in which both councils and tenants can put their trust.” Accreditation is set to take on more prominence with local authorities which are increasingly keen to work with responsible and professional landlords. The NLA scheme aims to offer a national and consistent approach to accreditation that can be recognised by councils, tenants and landlords alike. NLA Accreditation was successfully piloted with five local authorities (Bournemouth Borough Council, Hastings Borough Council, Middlesbrough Council, Rother District Council and Tameside Metropolitan Borough Council) between November 2009 and May 2010. As part of the national rollout, a further eight councils in England are already working with the NLA to implement the scheme in their areas. For more information about NLA Accreditation, go to www.goodlandlord.org.uk. NLA members can also go straight to the Landlord library www.landlords.org.uk
The benefits of becoming an NLA accredited landlord • • • •
Develop and improve your property management skills Access to the latest information on key issues and legislation affecting landlords Use of the NLA Accredited logo Be part of a nationally recognised scheme, that all landlords, tenants and councils can adhere to
To find out more about the NLA Accreditation scheme visit our website www.goodlandlord.org.uk. or contact our Accreditation Officer at siobhancannon@landlords.org.uk The first NLA Accreditation Foundation Course held in association with Hastings and Rother Council.
NLA Foundation Courses If you are interested in attending one of the NLA Foundation courses that are being facilitated over the next few months, check the NLA events calendar on the website or on page 20.
UK Landlord reaches new heights Crucial reading material for Chris Hellings of the NLA Advice Line who recently climbed to the Everest base camp. Let us know where you will take UK Landlord this summer!
UKLANDLORD JULY/AUGUST 2010 21
national conference 2010
NLA National Conference 2010 Landlords: We’re in Business Saturday 27 November 2010, Park Plaza Victoria, London (next to Victoria railway station) 10.45am start (follows the NLA Annual General Meeting). 5.00pm close. 5.00pm-6.00pm Conference Reception.
Landlords report increased confidence. No more red tape says Government. But what will the prospect of cuts and slow economic growth mean for landlords and tenants? Listen to and question industry experts. Join the debate about the threats and opportunities facing landlords in the current economic climate.
Conference highlights
Keynote speakers and business panel Keynote speakers will discuss the market and analyse trends. You can make your opinion heard in our business panel debate. Topics to be debated include: • Opportunities and threats for the business of letting • Business models for successful renting • How to maximise rental income • Avoiding the pitfalls
Exhibition and networking breaks Breakout sessions Discuss the practical side of letting with experts and other landlords during our interactive sessions. Delegates can pick and mix areas of interest: • Do your tenants need training? • Tax planning for landlords • Getting to grips with the planning system
• Leasehold versus Freehold • Practical Possession Proceedings • Making private renting the tenure of choice
Conference Reception Reflect on the issues of the day over drinks and make new contacts at the Conference Reception.
Delegate Rate Day Delegate Rate including Conference Reception
NLA member rate
Non-member rate
£95 inc VAT
£120 inc VAT
Please note these rates do not include accommodation.
Special offer!
Save £10 if you book your place before 31 August 2010. NLA members pay just £85 inc VAT and non members pay £110 inc VAT if you book and pay for your place before 31 August 2010.
NLA National Conference gives you the confidence to plan for the future, whether you let one property or manage a portfolio. Book now to reserve your place!
22 UKLANDLORD JULY/AUGUST 2010
Places are limited. Reserve your place today by calling 020 7840 8920 or emailing bookings@landlords.org.uk Full programme and booking details are available at: www.landlords.org.uk/ conference
REGIONALVIEW REGULAR LOCAL BUSINESS AND INVESTMENT NEWS
Welcome BARRY MARKHAM Director for the Regions NLA members often ask me what is happening in other parts of the country. While many landlords know about the housing market in their area, they are also interested in the investment opportunities and housing and benefits trends in other regions. This new Regional View section of UK Landlord magazine sets out practical local business information from different parts of the UK, including coverage of opportunities and local authority policies that affect landlords in the PRS. In this issue, we kick off with an analysis of the residential property market in Kent, and look out for our focus on Glasgow in the next issue. Much of the information for this section comes via our sterling network of Regional and Local Representatives who act as direct liaison between the NLA, local authorities and landlords at a local level. These experienced landlords play an active part in local consultations, meetings and events, and regularly participate in landlord forums and networking events. As our network grows, we’re looking for more landlords to become our ambassadors; to find out how to become an NLA Representative, see page 26. Most landlords come into contact with government at the local level. They also want to know how they can tap in to local networks of landlords and property specialists so that they can manage their properties, applying best practice and the latest information. Regional View will cover what the NLA does at the local level – things like the impact of our engagement with local authorities, as well as our involvement at local landlord forums and networking events (pages 24-25). For specific information about what is going on in your area please visit the Support section of the NLA website and click on In My Area. Hope to see you soon. Barry.Markham@landlords.org.uk
For more information:
REGIONS
ISSUEONE JULY/AUG 10
NEWS >>
Overcoming prejudices in Dorset Initiatives to improve collaboration between landlords and local authorities in Dorset could pave the way for greater cooperation on private rented sector housing at the local level on a range of topics. In East Dorset, things began to take shape after Steve Bartlett, NLA Local Representative for Dorset, gave a presentation to East Dorset Council Landlord Forum last year focusing on problems landlords were encountering with Local Housing Allowance (LHA). Colin Swain who is Head of Benefits & Revenues at East Dorset District Council suggested that Dorset local authorities and landlords get together with the aim of resolving some of the problems. A group comprising the heads of Revenue and Benefit services for all Dorset local authorities plus residential landlords from each of the local authority areas was formed. “At the first meeting it became clear that local authorities recognised that the consistency in the way LHA was implemented across the county could be improved,” says Steve. The group produced a document (Local Housing Allowance, Safeguard For Tenants & Landlords) designed to address this problem which has now been approved by all Dorset local authorities. Colin Swain summarised the challenges for the group: “The greatest thing to overcome when working with
landlords was the barrier created over many years of suspicion and prejudice that, from the authorities’ point of view, landlords are tyrants, unreasonable and money grabbing etc. (which they are not) and from the landlords’ perspective, that benefit officers are bureaucratic, deliberately obstructive and uncooperative (which they are not)…I believe very quickly the landlords and benefit officers identified the merits of working together; the potential in doing so for real improvements to service delivery and that co-operation reaps reward.” Together with local landlords, the NLA has also been working with Bournemouth Borough Council to produce HMO Amenity Standards Policy. Steve reports that this collaborative effort has addressed several thorny issues such as wash hand basins and room sizes in Houses in Multiple Occupation. “After a lot of debate and some very good input from David Cox of the NLA Policy Unit and local landlord Tim Evennett, Bournemouth Council recently approved the standard,” Steve told UK Landlord.
Scottish landlords hungry for property information “My lasting impression of each of the NLA landlord exhibitions held in Aberdeen, Edinburgh and Glasgow in June is the enthusiasm for accurate information and knowledge of many of the landlord participants,” says David Kendall, NLA National Representative for Scotland. The NLA’s Scottish Exhibitions treated local landlords to a series of in-depth seminars on practical topics affecting the business of landlords. This included presentations on the state of play and good deals for buy-to-let mortgages, tax specialists on how to save money, and legal issues particularly relevant to the Scottish housing landscape. “Many
landlords I met didn’t know that things are getting a little better when it comes to finding buy-to-let mortgages,” David told UK Landlord. “Others didn’t realise how necessary it is to create an inventory, or even how to do so. We had a lot of landlords signing up to become members of the NLA as they could see we provide this type of business information as a matter of course.” UKLANDLORD JULY/AUGUST 2010 23
LANDLORDEVENTSGUIDE 2010 Please note this is a listing of pre-planned events. Additional events will be added to UK Landlord and the website throughout 2010. Agenda topics are normally finalised and published on www.landlords.org.uk/events about 4 weeks in advance of meetings. Reminder emails will also be sent to members in relevant areas so please do check with our member team (020 7840 8937) that we have your current email addresses.
REGION
Other event
DATE
EVENT
Tue 13 Jul
NLA Teesside Branch Meeting North East
The Blue Bell Hotel, Acklam, Middlesbrough, TS5 7HL
7.30pm
Wed 14 Jul
Medway Landlords Training
Medway Council Offices, Gun Wharf, Dock Road,
5.00pm to 9.00pm
Day in conjunction with NLA
Thu 15 Jul
NLA London Landlords Meeting London
Islington Town Hall, Assembly Rooms, Upper Street,
6.00pm for
in conjunction with Islington
London N1 2UD
6.30pm start
Council
Thu 15 Jul
Dartford and Gravesham
Dartford Borough Council, Home Gardens, Dartford,
5.15pm for
Landlords Forum
Kent, DA1 1DR
5.30pm
Wed 21 Jul
NLA & Ryedale Council
Malton and Norton RFU Club, The Gannock, Old Malton Road,
2.30pm
Landlord Fair
Malton, North Yorkshire, YO17 7EY
to 6.30pm
Thu 22 Jul
NLA Dorset Branch Meeting
Borough of Poole, Civic Centre, Poole, BH15 2RU
7.30pm
Tue 27 Jul
NLA & Wakefield Landlord Fair Yorkshire & The Humber
Castleford Civic Centre, Ferrybridge Road, Castleford, WF10 4JH 3:30pm to 7:00pm
Mon 9 Aug
NLA Bradford Branch Meeting Yorkshire & The Humber
Bradford Club, 162 Bradford Road, Shipley BD18 3DE
South East
South East
Yorkshire & The Humber
South West
LOCATION
NLA event
TIME
Chatham, ME4 4TR
7.30pm for 8.00pm start
Mon 6 Sep
NLA Milton Keynes
Abbey Hill Golf Centre (Main Building), Monks Way,
6.00pm for
Branch Meeting
Two Mile Ash, Milton Keynes, MK8 8AA
6.30pm start
Tue 7 Sep
NLA Cumbria Branch Meeting
North West
University of Cumbria, Fusehill Street, Carlisle, Cumbria CA1 2HH 7.00pm
Tue 7 Sep
NLA Selby Landlord Fair
Yorkshire & The Humber
Selby Town Hall, York Street, North Yorkshire, YO8 4AJ
and Branch Meeting
7:30pm
Tue 7 Sep
NLA Fife Branch Meeting
Scotland
Gilvenbank Hotel, Huntsman Road, Glenrothes, Fife KY7 6RA
7.00pm start
Mon 13 Sep
NLA Northampton
East Midlands
Northampton Rugby Club, Weedon Road,
6.00pm for
Branch Meeting
Northampton, NN5 5BG
6.30pm start
Mon 13 Sep
NLA Bradford Branch Meeting Yorkshire & The Humber
Bradford Club, 162 Bradford Road, Shipley BD18 3DE
7.30pm for
South East
3:30pm to
8.00pm start
Tue 14 Sep
6.30pm
NLA North East Branch Meeting North East
Novotel Newcastle, Ponteland Road, Kenton, NE3 3HZ
for 7.00pm start
Tue 14 Sep
NLA Teesside Branch Meeting
North East
The Blue Bell Hotel, Acklam, Middlesbrough, TS5 7HL
7.30pm
Wed 15 Sep
NLA & Leeds Council
Yorkshire & The Humber
John Charles Centre for Sport Events Hall,
10.30am
Landlord Fair
Middleton Grove, Leeds LS11 5DJ
to 2.30pm
Wed 15 Sep
NLA Eastbourne & Wealden
Lansdowne Hotel, Alfriston Room, King Edward’s Parade
6.30pm
Branch Meeting
(Eastbourne Seafront), East Sussex BN21 4EE
to 9.00pm
Wed 15 Sep
NLA Portsmouth Meeting
South East
Queens Hotel, Clarence Parade, Southsea, Hampshire, PO5 3LJ
7.00pm to 9.00pm
Thurs 16 Sep
NLA Hastings & Rother
South East
The Manor Barn, Bexhill-on-sea, East Sussex, TN40 2HA
9.30am to 1.00pm
Branch Meeting
Thurs 16 Sep
Landlords Exchange
East Midlands
North West Leicestershire District Council, Council Chamber,
6.00pm
Council Offices, Coalville, Leicestershire, LE67 3FJ
to 8.00pm
Tue 21 Sep
Hilton Brighton Metropole, Kings Road, East Sussex, BN1 2FU
6.30pm to 9.00pm
NLA Brighton Branch Meeting
24 UKLANDLORD JULY/AUGUST 2010
South East
South East
LANDLORDEVENTSGUIDE 2010 DATE
EVENT
REGION
LOCATION
TIME
Tue 21 Sep
NLA Meeting Lincoln
East Midlands
Lincoln Golf Centre, Lincoln Suite, Moor lane,
6.30pm
Thorpe On The Hill, Lincoln LN6 9BW
to 8.30pm
Wed 22 Sep
Newport Civic Centre, Committee Room 7, Newport,
5.30pm
Newport Landlords Forum
Wales
South Wales, NP20 4UR
Wed 22 Sep
NLA Southampton Meeting
IBIS Hotel, Winchester Room, Southampton Centre, 9 West
7.00pm
Quay Road, Western Esplanade, Southampton, SO15 1RA
to 9.00pm
Thu 23 Sep
Hotel Miramar, East Overcliff Drive, Bournemouth,
7.30pm
NLA Dorset Branch Meeting
South East
South West
Dorset, BH1 3AL
Thu 23 Sep
NLA Nottingham & Derby
Novotel Hotel, Bostock Lane, Long Eaton, M1 Junction 25,
7.00pm for
Branch Meeting
Nottingham NG10 4EP
7.30pm start
Tue 28 Sep
NLA East and South East
Brunel Museum, Railway Avenue, Rotherhithe, London SE16 4LF 7.00pm to
London Members Meeting
Wed 29 Sep
NLA & Scarborough
Landlord Fair
Tue 5 Oct
NLA Selby Branch Meeting
East Midlands
London
to 8.30pm
Yorkshire & The Humber
Spa Complex, South Bay, Scarborough, North Yorkshire, YO11 2HD 2.00pm to 8.00pm
Yorkshire & The Humber
The Londesborough Hotel, 3 Market Place, Town Centre,
3:30pm to
Selby, YO8 4NS
7:30pm
Thu 7 Oct
NLA South Somerset
The Manor Hotel, Hedford, Yeovil, Somerset, BA20 1TG
6.00pm for 6.30pm
Landlords Meeting
start to 8.00pm
Mon 11 Oct
NLA Bradford Branch Meeting Yorkshire & The Humber
7.30pm for
South West
Bradford Club, 162 Bradford Road, Shipley BD18 3DE
8.00pm start
Wed 13 Oct
Doncaster Metropolitan Borough Yorkshire & The Humber
Carr House Centre, Danum Road, Doncaster
1.30pm to
Council Landlords Forum
(In the Hall), DN4 5HF
4.30pm
Wed 13 Oct
NLA Wessex Branch Meeting
Lansdown Golf Club, Lansdown, Bath BA1 9BT
1.15pm for
(Bath)
2.00pm start
Thur 14 Oct
NLA Swansea Branch Meeting
Liberty Stadium, Landore, Swansea, SA1 2FA
6.00pm to 7.30pm
South West
Wales
Mon 18 Oct
NLA Birmingham and Solihull West Midlands
Solihull Council House, Committee Room 1, The Civic Suite,
5.00pm
Branch Launch
Solihull B91 9QS
to 8.00pm
Wed 20 Oct
NLA Wessex Branch Meeting
BAWA, 589 Southmead Road, Filton, Bristol, BS34 7RG
6.30pm for
South West
7.00pm start
Wed 27 Oct
6.00pm for
NLA Exeter Branch Meeting
South West
Southgate Hotel, Southernhay East, Exeter, Devon, EX1 1QF
6.30pm start
For an up-to-date list visit: www.landlords.org.uk/events
NLA National Conference 2010 – Saturday 27 November 2010 at Park Plaza Victoria London, near Victoria Station, Central London For details and to register your interest please visit: www.landlords.org.uk/conference
UKLANDLORD JULY/AUGUST 2010 25
NEWS >>
Legal advice for tenants Cash grants to in Denbighshire improve properties in Kent A specialist service has been set up jointly by Denbighshire County Council and the Citizens Advice Bureau in two county courts to provide debt management and legal advice for people facing repossession to remain in their homes.
As well as helping homeowners with mortgage arrears, the County Court Help Desk Scheme will help tenants who have rent arrears from becoming homeless. Specialist caseworkers will offer help and representation at Rhyl and Mold County Courts for possession hearings and provide advice on debt management.
Maidstone Borough Council has 50 per cent cash grants of up to £10,000 per house available to help landlords address serious disrepair in their rental properties. The cash grants increase to 75 per cent if landlords are accredited under the Kent Landlord Accreditation Scheme.
Joan Stuart, NLA North East Chair
The types of work covered are likely to be re-roofing, dealing with severe dampness problems, replacement of dangerous electrical installations, and replacement of windows which are in a dangerous and un-repairable condition.
Joan Stuart, former Chair of NLA North East, has died. “Joan was instrumental in bringing together landlord groups in the North East. Joan will be missed by her family and her many friends. She provided her own ‘social services’ as a landlord, making it her business to take excellent care of her tenants,” says Johnny Lighten, NLA North East Regional Representative.
Full details and conditions at www.maidstone.gov.uk/ housing/private_housing/grants_for_landlords.aspx Watch the NLA’s web site for the Autumn round up of events including a landlord fair in West Kent.
HMO Network If you want to meet other landlords to share concerns and discuss best practice and new ways of approaching problems relating to Houses in Multiple Occupation (HMO), make sure you book your place at the bi-annual National HMO Network conference which will take place on 12 October in Sheffield. The Sheffield conference will cover a range of issues
including HHSRS, housing and fire safety, student accommodation, tenancy deposit schemes, landlord accreditation, gas safety and new legislation. For more information, see www.nationalhmonetwork.com or email pshpolicy@sheffield.gov.uk.
NLA REGIONAL NETWORK >>
Do you want to join the NLA Representative team? We are looking for landlords who are great at communicating NLA policy and best practice, and want to work with our professional policy team to make sense of the local operating environment for landlords, and, where necessary, help us to make a difference to it. This will involve meetings with local authority personnel, occasional media work, organising and running meetings for members and working to expand NLA membership. NLA Representatives work around 30 flexible hours per month. Both daytime and evening hours could be
26 UKLANDLORD JULY/AUGUST 2010
required, so your other commitments need to be flexible. An hourly rate of £16.87 is paid for agreed hours on a self-employed basis. We are currently looking for landlords who are up to date with current local and national landlord issues to represent us in several areas around the UK. Full information is available at www. landlords.org.uk/aboutus/workforus. htm. If you would like to discuss the role further, please call Sally Thorn, Regional Coordinator on 020 7840 8911.
REGIONAL INVESTMENT FOCUS >>
Spotlight on Kent In the first of a new series looking at residential investment opportunities and markets in different parts of the United Kingdom, UK Landlord interviewed Marion Money, NLA Local Representative for Kent, about the area she knows best. UKL: What should buy-to-let investors know about Kent? M.M.: Kent is an incredibly diverse region when it comes to housing. LHA tenants. Thanet is the most deprived area in the South East, and it is an area where London Boroughs place children for fostering. The upshot is that these children stay in the area and often become adults on the benefit system. Many landlords have developed a strategy around expanding their portfolio on LHA tenants. There is currently a review of this practice as local schools have said they do not have the resources to supply education facilities. Professional tenants. Conversely we have areas with very good commuter links to London from places like West Kent, Sevenoaks and Tunbridge Wells. The letting market here has been predominantly to professionals looking for excellent schools, cheaper rent levels than London, but renting rather than buying because of the flexibility of being able to move. The good schools have boarding facilities. With the opening of the High Speed Rail Link, the economic epicentre of Kent has shifted towards London. Gravesend is now less than 20 mins from London and young professionals are renting. The market has anticipated this over the
preceding years and new developments have sold to buy-to-letters. There were signs of oversupply before the Rail Link opened but now it is up and running the professional tenants are moving in. There are indications that the market in Kent may be ripe for institutional investment and this is being discussed as part of the Kent and Medway Housing strategy that is currently being prepared. Potential investors in Kent should be aware that the strategy will be finalised later this year so it should play a key role in their business plan. Student tenants. Kent is a major area of university growth. Medway is one of the few in the country recently to have secured extra funding for places. Medway has had significant investment from Government bodies for regeneration following the closure of the dockyard. This investment has used universities as a key element in the growth plan and the student life has had impact on the housing market. There is currently a severe shortage of student accommodation in Medway but if I were investing here I would ensure any property I bought would also be suitable for the family market. This market mirrors what happened in Canterbury a few years ago where there is now the potential for oversupply of student accommodation coupled with current planning applications for two halls of residence.
Marion Money, NLA Local Representative (Kent).
UKL: What is your current investment strategy? M.M.: I’m not investing. I only let in my own area and currently the maths don’t add up – the rental returns for the capital expenditure are poor and do not leave any room for maintenance and voids.
UKL:What advice would you give to anyone thinking of investing in an area other than that where they live? M.M.: Make sure you are TOTALLY confident in the managing agent and you visit the agent frequently, unannounced and drive past your property to do a visual.
UKL: Have you made any investment mistakes and what lessons did you learn from them?
Dickens Road, Gravesend
St. Mildreds Church, Thanet
M.M.: I bought a second home on the beach as a holiday let and became emotionally attached, so I do not let it out. It’s dead money. You can’t live in 2 homes at once! Remember to keep your business head on when investing; what you like for yourself is not necessarily the best investment proposition.
UKLANDLORD JULY/AUGUST 2010 27
NLA member viewpoints
Landlord views: Joanna Jesson I own 2 one-bed flats in Hertfordshire. This is now a bit of a challenge as I live in Leicestershire, 100 miles away! Despite my best efforts, one of my properties is now getting older and looking older, and being so far away can be an obstacle to renting it out. I’m not planning to sell at the moment. My investment strategy for the time being is to sit tight and ride out the current financial storm as it rages around me.
Joanna Jesson, three-year member
The most rewarding aspect of being a landlord is the steady income and a growing asset. I work full time as a Management Coach and Trainer and I chair a group of CEOs and Directors for the Academy For Chief Executives. I joined the NLA over five years ago to keep up to date with changing legislation and news in the letting world. The 3-year membership package saves me the hassle of renewing every year.
Multi-year membership fees Landlord Membership of the NLA
Price
Savings
Individual 1 year
£80 + joining fee of £18 (pay by direct debit and save £10)
-
Individual 3 year
£195
£63
Individual 5 year
£320
£98
28 UKLANDLORD JULY/AUGUST 2010
Who can join under this Package?
}
Individual landlords (including spouse/ partner)
NLA PROPERTY WOMEN AWARDS 2010
Pull out and keep
NLA Property Women Awards 2010: Celebrating excellence The country’s leading female property entrepreneurs gathered together in London at the end of June for the prestigious NLA Property Women Awards 2010. At the event, a glittering ceremony where for one evening the austere years ahead were put to one side, awards were given to celebrate the work of the most effective and respected women in property across the UK. Attended by a host of luminaries in the field of residential property, including Lord Best OBE, the Awards were hosted by TV personality and NLA member Melissa Porter. On receiving her award as NLA Property Woman of the Year 2010, Juliet Ashton-Taylor spoke passionately about providing housing to those who need a
chance in society, particularly in the difficult economic times we all now face, a sentiment that was warmly endorsed by the audience at the awards. Melissa Porter praised Juliet for proving “that with the right application, sheer hard work and determination, property can be a sound investment that has the ability to change your life. She is a true inspiration and I cannot think of a better role model for whom women can aspire to become.”
This booklet sets out the remarkable stories of the dedicated women who received awards at this year’s ceremony. To find out more about the 2011 awards and how to enter, please send an email to awards@landlords.org.uk so you can be placed on the mailing list which will update you with details about NLA Property Women Awards 2011.
UKLANDLORD JULY/AUGUST 2010 29
NLA PROPERTY WOMEN AWARDS 2010
The UK’s leading property women Juliet Ashton-Taylor, NLA Property Woman of the Year 2010 Juliet Ashton-Taylor bought her first property in 2003, and now has six buy-to-let properties in the North East, as well as two tenants who live in her home on the rent-a-room scheme. Things looked very different for Juliet in 1999, when her marriage broke up and with no career or income, she found herself without a job or a home, looking for a place to rent. “One day I had a twenty-year marriage, four children, a house, a car, a job and friends. Literally overnight I lost everything. Because I had no real career and no income I could not have my children with me which broke my heart. I remember a very low point when I had to decide if life was worth going on with. Fortunately I decided that it was but that no one was going to help me out of the pit I was in so I had to do whatever it took to make things different.” “Part of my reason for being in property is that I have seen my children at the mercy of unscrupulous landlords and felt I could do better myself for them,” says Juliet, who was also this year’s NLA North East Property Woman 2010. “I am also motivated to always have room in my portfolio to help someone in difficult circumstances. I have taken the chance on various people who maybe don’t tick all the boxes but whom you can see deserve another chance in life.”
Amy Dixon, NLA Young Property Woman 2010
Fiona Macaskill, NLA Green Property Woman 2010
Amy Dixon bought her first buy-to-let property six years ago when she was 24. Using equity from her first home, which she bought in 2001 fresh out of university, she bought a property at auction which she renovated to hold 2 self-contained flats. Now 30 years old, Amy’s portfolio comprises a 7-unit HMO, a 3-bed house, and two one-bed flats and she also runs her own lettings agency (Dixon Estates). Amy thinks she got the property bug from her parents who are landlords themselves. “I consider myself very lucky; they pass on so much confidence; in aspects such as decision making, financial arrangements and building costs,” she says. She is currently in the process of purchasing a pub which she hopes to turn into an HMO, along the lines of her first HMO which she describes as “an HMO with a twist” that comprises 7 large units, all with top quality ensuites and kitchenettes. “The house is full of graduates, with future tenants on a waiting list. The tenants keep their apartments clean and respect their neighbours – job done!”
Fiona Macaskill started her letting business when she was unable to pursue her career as a design technology teacher following a serious back injury while attempting a paragliding world record in the Yemen. Using £100,000 she had inherited, Fiona has bought and refurbished an average of four properties per year since 1999. Her forty rental properties are aimed at the student market in Bristol, and all have been refurbished to high standards with an impressive array of environmentally friendly features including insulation, energy efficient appliances and low energy light bulbs to reduce bills for tenants as well as the environmental impact of the homes she provides. She has even planted herbs and vegetables in the gardens of her rental properties! Fiona was also awarded the NLA South West Property Woman 2010 title.
Claire Empson, NLA Letting Agent Property Woman 2010 Claire Empson, has been a landlord for seven years, now owns 3 investment properties and manages 57 properties for other landlords. “I realized there was a gap in the market for a decent lettings agent in my area of South East London who could provide a personal service that was honest and didn’t charge a fortune.” explains Claire. “I had no idea how quickly my lettings business, Daisylets, would take off.” Clients appreciate Claire’s approach and one recently described her as “without doubt a breath of fresh air in the letting industry and someone who genuinely cares about her clients.”
30 UKLANDLORD JULY/AUGUST 2010
Kim Waugh, NLA Local Authority Property Woman 2010 Kim Waugh has been instrumental in shaping the support provided by Gateshead Council to the local private-rented housing market. Since she started work at the Council in 1978, Kim has helped set up a landlords’ forum which by 1997 successfully transformed into the Gateshead Private Landlords Association, which today has nearly 600 members. Kim was also key in supporting colleagues to develop the private rented accreditation scheme in Gateshead. According to her colleague Dawn Tindle, who nominated her: “Kim Waugh is an exceptionally dedicated local authority property woman who has changed the landscape of the private-rented sector in Gateshead. Whether breaking records in her own professional development or introducing innovative improvement schemes to the industry, Kim’s contribution and dedication to Gateshead’s private-rented sector cannot be underestimated.”
Mhairi Noble, NLA Scotland Property Woman 2010
Jane James, NLA Wales Property Woman 2010
Mhairi Noble was looking for a business opportunity in 2004. “I was confident that investing in the Orkney property market at that time was secure, and that it would provide a better return on my money than the bank was giving.” Mhairi’s assessment proved correct and she now owns two properties and another two that she part owns with her parents. She also manages a further 55 properties for other landlords as she became aware that there were no local agencies providing property management services for landlords. “There are currently 1,000 rented properties registered in Orkney. My goal is to manage these properties, ensuring that a high standard of repairs is maintained,” says Mhairi.
Jane James decided to become an investor landlord and teamed up with her husband who has a real aptitude for property and construction. Jane now has a portfolio of 40 properties, comprising terraced and detached houses, cottages, flats and a seven-bedroomed House in Multiple Occupation. “In the four years that I have worked in this industry I believe that I have made a real difference in our locations to the standard of the properties and the different way that I approach tenancies, tenants, organisations and local authorities,” says Jane.
Sandra Widdrington, NLA Yorkshire and The Humber Property Woman 2010 Tracey Abbiss, NLA East Midlands Property Woman 2010 Tracey Abbiss bought her first property in the summer of 2006: “I had my eye on my first development project, a notorious wreck of a house, the worst on the best street, close to my parents’ house in Nottingham. Earlier in the year I was completely devastated at having nearly lost my father to a near fatal heart attack, and quite simply I felt I wanted to make both him and my mum proud.” Tracey’s project was a success and she now has four buy-to-let properties in her portfolio, and manages more than fifty other properties on behalf of landlords in her area. This is the second time running that Tracey has won the NLA East Midlands Property Woman Award, and she recalls the joy of winning in 2009: “My Dad was the first on the end of the phone to hear the news, he was and still is so happy for me.”
Samantha Collett, NLA West Midlands Property Woman 2010 Samantha Collett quit her well-paid marketing job in 2004, determined to become her own boss and use the £15,000 she had saved to invest in rental property. Since then she has bought and renovated properties which meet her stringent income yield requirements and to which she can build value through planning gains or refurbishment works. Her strong entrepreneurial spirit led her open her own local property management and lettings agency and in 2009 she launched a UK-wide online private lettings portal. With just under 30 houses, including two conversions into 9 self-contained flats, Samantha says she is proud of creating employment for others and gets huge satisfaction from moving new tenants into properties which they then make their home. “When people have their own sense of security it gives the perfect springboard to create further success of their own,” she says.
Sandra Widdrington has been a landlord for 9 years. Chair of her local landlords’ association, Sandra still applies the advice a fellow landlord gave her at the first ever meeting she attended: if you yourself could not live in the property no one else will, and nor will they pay the rent. She says: “I make it my business to get to know the tenants and pride myself in carrying out maintenance or repairs as soon as reported.”
Irene Hancock, NLA East of England Property Woman 2010 Irene Hancock has built a successful buy-to-let business in Norwich based on providing housing that one of her tenants describes as “accommodation which is of an exceptionally high standard.” Her tenant speaks highly of Irene: “She deserves to win this award as she is a successful entrepreneur if measured by finance and business, but even more so if measured by other values such as investment into people and potential.”
Hasmita Reardon, NLA South East Property Woman 2010 Hasmita Reardon has been in buy-to-let for 12 years. “The main reason I was inspired to purchase property was because my family were homeless and refugees from war-torn Uganda. I have always helped people and still do, but through this recession I feel I have had to help a lot more people.” Hasmita’s tenants include a number of vulnerable people, including victims of domestic violence. As well as looking after her own substantial portfolio, Hasmita now rents out properties for other landlords and invites them to her local landlord forum so they can see their investment is well looked after.
See overleaf for more winners and our sponsors UKLANDLORD JULY/AUGUST 2010 31
NLA PROPERTY WOMEN AWARDS 2010
The UK’s leading property women Bindar Dosanjh, NLA London Property Woman 2010
Tammy Silcock, NLA North West Property Woman 2010
Bindar Dosanjh has overcome a difficult past, having suffered racial bullying at school and a failed arranged marriage that ended acrimoniously in 1991 when her husband left her alone to fend for herself and her ninemonth old baby, at a time when interest rates were l5 per cent, and she had a £50,000 mortgage and was only earning £7,500 p.a. as a secretary. Determined to make a better life for herself and her child, Bindar qualified as a solicitor in November l996, and has built up a significant property portfolio, spanning London, Sheffield, Hatfield, Scotland and Spain. Bindar is committed to giving something back to those less fortunate than herself. She provides free legal services to various agencies and supports domestic violence refuges. “My purpose in life is to inspire and empower people to take them to the next level on their journey of life, who then will impact on the next generation,” she says.
Tammy Silcock launched her buy-to-let career with her husband in 2005. “At that time there were quite a lot of properties up for sale that needed renovation at good prices. Having an eye for a bargain and being good at negotiating prices are key when renovating as you need to ensure the figures stack up so you can achieve a quality finish.” Her current portfolio of 26 residential units along with three shops, includes properties that she has bought to meet the needs of specific people, including her painter, who was unable to cope with the mortgage payments on his home. Buying his property has meant that he and his family can stay together in the home they had been in for 20 years. “I am really happy that I was able to keep the family together in the same house and they were relieved,” says Tammy.
With many thanks to this year’s principal sponsors And to the sponsors of the following individual awards
my|deposits.co.uk: A simple insurance-based scheme that allows its members to hold onto their deposit for the duration of the tenancy.
Hamilton Fraser Insurance: At Hamilton Fraser we specialise in providing high quality insurance at competitive prices for residential landlords. Our policies offer the widest range of cover to protect your investment should the unthinkable happen. Whether you have a single property or an entire portfolio we are here to help protect your assets.
Genesis Housing Group: Genesis Housing Group is one of the largest and most diverse housing groups in the UK, owning or managing some 40,000 homes. The Group consists of PCHA, Pathmeads, and Springboard housing associations. We also have in our group a charitable foundation, Genesis Community.
National Approved Letting Scheme: The National Approved Letting Scheme (NALS) is an accreditation scheme for lettings and management agents offering peace of mind to landlords and tenants in knowing that they are dealing with a firm which agrees to meet defined standards of customer service, together with having in place the necessary insurances to protect clients’ money plus a customer complaints procedure offering independent redress.
32 UKLANDLORD JULY/AUGUST 2010
NLA Young Property Woman:
my|deposits.co.uk
NLA Green Property Woman:
Hamilton Fraser Insurance
NLA Letting Agent Property Woman:
National Approved Letting Scheme
NLA Local Authority Property Woman:
Genesis Housing Group
NLA East of England Property Woman:
Landlord Action
NLA London Property Woman:
Seddons
NLA North West Property Woman:
AccomodationforStudents.com
NLA Scotland Property Woman:
British Gas
NLA South East Property Woman:
Property Portfolio Software
NLA South West Property Woman:
Upad
NLA West Midlands Property Woman:
Future Home Care
NLA Yorkshire & Humber Property Woman: EnviroVent
Wine & flowers were kindly sponsored by The Deposit Protection Service, the only custodial tenancy deposit protection scheme accredited by the Government. It is provided free of charge, and funded entirely by the interest earned from deposits held in the scheme. For more information, visit www.depositprotection.com
UKLANDLORD JULY/AUGUST 2010 33
Feature: Know your HMOs
HMO checklist: a rewarding investment if you get it right Thinking of investing in Houses in Multiple Occupation (HMOs) in England? If you understand the HMO rules and prepare the property well for your target tenants, you can enjoy higher yields with as few headaches as possible. How do you know if your property is an HMO? Any residential property that is let to three or more unrelated people who share amenities such as a kitchen and bathroom is an HMO. This includes shared houses and traditional bedsits. Do I need permission to let a property as an HMO? Some lenders have special conditions relating to HMOs making it especially important that landlords check their terms & conditions. Leaseholders should be aware that their headlease may include restrictive covenants or require permission from the freeholder. If the property is three or more storeys and let to five or more people, forming two or more households it is a legal requirement to apply for an HMO licence before beginning a tenancy. For smaller properties Additional and Selective Licensing may apply. Local Authorities have powers to license smaller HMOs or all rented property in a particular street or ward. It is vital that landlords check whether a scheme operates in their area. If you are letting a property as an HMO for the first time you may need to apply to your Local Authority for planning permission. If you are looking to purchase an HMO, check whether the correct permission or established right is in place first.
34 UKLANDLORD JULY/AUGUST 2010
Are there specific rules for HMOs relating to fire safety and health and safety aspects? Certain HMO Management Regulations apply to all HMOs. These include a requirement to carry out electrical safety checks on the mains wiring every five years. If you are required to apply for an HMO licence, the Local Authority Environmental Health Team will visit your property and carry out a health and safety risk assessment known as ‘HHSRS’. You may be required to carry out work to improve the property if potential risks are identified or if your property does not meet minimum health and safety standards. The NLA worked with LACORS to produce fire safety guidance for landlords intended to ensure they would meet the requirements for fire safety. However some local authorities require more and slightly different actions. It is important that landlords contact their local authority and use the NLA’s Advice Line if they are unsure what is required. What are the most common problems landlords running HMOs encounter? Safety issues frequently cause the most confusion for landlords. Make sure that you are clear about what your Local Authority will require before purchasing or developing an HMO property.
What’s the best investment: a fully licensed HMO or a property that could be adapted to create an HMO? Unfortunately there is no magic formula for making money from property. As most HMO landlords will tell you, shared housing can provide a good return on investment – but only after a lot of hard work. With more rules and regulations it is important to be aware of HMO requirements and whether you will need planning permission. Implementation of the rules varies from council to council so research is required before making an investment in a particular area if you plan to adapt a property to make it an HMO. Would there be any obstacles to reconverting a property back from being an HMO to, for example, a family home or self-contained flats? Planning rules permit the reversion of certain smaller HMOs to ‘family homes’ but permission may be required for larger properties. Landlords should be careful when considering a change of use and retain evidence of any previous tenancies as they may experience difficulties in the future. It is always advisable to check with the NLA Advice Line and the local planning office if in any doubt.
What are the prospects for the sector in the short and medium term? The last 12 months has seen a great deal of change in the PRS. One of the last actions of the previous Government was to make it easier for Local Authorities to introduce local licensing schemes. The former Secretary of State also introduced the requirement for planning permission in relation to smaller shared housing. There is a fear in some areas that these powers could be used to control the number of HMOs in particular area or community (eg student housing). However, the Coalition Government is currently consulting on changing planning rules to remove unnecessary planning restrictions in areas where high concentrations do not exist. This would be a welcome change for many landlords and local authorities confused by the current system. With thanks to Vincenzo Rampulla, NLA Public Affairs Officer, who supplied the responses.
Preparing HMOs for blocks of flats Pascal Wharton, Head of Sky Homes, advises how landlords with properties in blocks of flats can ensure their homes are attractive to tenants. “Our main targets/ customers are social, private and new-build multi dwelling units of four or more flats. Landlords need to check their HMOs are equipped with a communal TV system with the correct wiring
and hardware to ensure they have access to a wide range of TV choices as well as high speed broadband, both of which Sky can provide. We would advise that anyone wanting to invest in an HMO asks their potential managing agent to contact us via our website (www. sky.com/communaltv) or by telephone (08442 410388) to ensure they are put in touch with Sky approved installers who will provide the best quality service at a competitive price.”
HMOs for the student market Simon Thompson, Managing Director of www.accommodationforstudents.com advises how landlords can make their HMO properties appeal to students: “The results from a recent survey of over 1,100 students by Accommodationforstudents.com (AFS) indicate that students prefer décor to be kept modern and ‘clean’ looking. The students surveyed said freshly painted walls in a neutral shade are ideal, plus this is a cheap and effective way of freshening up the look of a room for landlords. Floorboards and Simon Thompson, Managing Director, laminate flooring are preferable to carpet, as accommodation for students they give the accommodation a contemporary feel that is easy for the residents to keep clean. Little accidents happen to everyone, so being able to simply mop up spills from wooden floors is preferable to scrubbing away at carpet. Landlords should ensure kitchens have ample storage and surface space, as students tend to cook and buy food independently of each other. Often four or more people will all cook at once so preparation space is crucial. The AFS survey revealed that students list small surface areas as a huge bugbear, so properties that lend themselves to cooking home meals let well. When looking to invest in a HMO for students, landlords should think about the three crucial elements: location, cost and size. Accommodationforstudents.com’s research revealed that students want to be close to University as they are reliant upon walking to get to lectures. They also have tight budgets to stick to and almost one third claim that price is a deal-breaker for them. Size of bedrooms is extremely important for students too, as they use this space to study in as well as sleep in. Bedrooms should therefore be large enough to comfortably house a bed, wardrobe, chest of drawers and a desk.”
Planning rules permit the reversion of certain smaller HMOs to ‘family homes’ but permission may be required for larger properties.
Need more information? For HMOs generally, see the NLA Landlord Library, accessed via the NLA website, www.landlords.org.uk For the new planning rules, read the factsheet on Changes to Planning Use Laws in the Forms and Factsheets section of the NLA website, www.landlords.org.uk
UKLANDLORD JULY/AUGUST 2010 35
PUBLIC AFFAIRS
Developments that could affect landlords in the UK Promising start for the new Housing Minister After three years as one of the main Conservative voices on housing, many landlords’ hopes for positive change rest on Grant Shapps, the new Housing Minister in the Coalition Government. In his first statement in Parliament at the beginning of June, Mr Shapps did not disappoint. He took the opportunity in the Communities Question Time to announce that he would scrap the previous government’s plans for additional regulation of the private-rented sector and that the Government has no plans to introduce new regulations on the private rented sector. Mr Shapps told the House that his key objective for the private-rented sector is to ensure that there is a balance between the rights and responsibilities of tenants and landlords, and he said he was satisfied that the current system strikes the right balance. This position was confirmed on the Communities website where the Housing Minister promised good landlords across the country: “the Government has no plans to create any burdensome red tape and bureaucracy, so you are able to continue providing a service to your tenants.” The news was welcomed by the NLA. “We are very pleased that the Government is rejecting previous attempts to introduce a register,” said
David Salusbury, NLA Chairman. “It was the wrong way to go about raising standards in the privaterented sector and would not have rooted out rogue landlords. In fact, we believe the likely consequence could have been to penalise the law-abiding, while at the same time driving the worst landlords under the radar.” The Minister’s announcement means the programme to introduce a national register of landlords, a Trip Adviser style of website comparing landlords, compulsory written tenancy agreements, a free housing hotline for private tenants and full regulation of letting and managing agents will not be taken further. The new Housing Minister called on councils to use the wide range of powers already at their disposal to tackle the minority of rogue landlords that fail to provide good quality accommodation and blight local neighbourhoods. And shared housing and licensing? In line with the spirit of localism that is being promoted by the new Coalition Government, Minister Shapps stated that consent for local selective and additional licensing schemes would not be revoked. The NLA is currently reviewing how these new
rules, which give local authorities general consent to introduce licensing schemes without seeking permission from central Government, are affecting its members. The reality of being in power, particularly in a coalition government, may prove tricky for Mr Shapps. In spite of the Conservative Party’s preelection position to revoke new planning rules on shared housing, the new Minister has held back from taking moves to immediately rescind new rules requiring landlords from April 2010 to apply for planning permission if they start renting a family dwelling to more than three tenants. However, by the middle of June he announced the launch of a consultation to look at ending blanket shared housing planning regulations in favour of a more targeted approach.“I want to give councils the flexibility they need so they can use planning rules to control the spread of shared housing in neighbourhoods where they cause problems, without tying local landlords in red tape where shared housing causes few, if any, problems at all,” he said. The NLA has welcomed this announcement as a positive step towards rethinking the changes in law on shared housing.
The new government: Who’s who in housing? The NLA has prepared a useful guide to the key departments and ministers who will be involved in policy affecting landlords in the private-rented sector in the Coalition Government. For more information, go to the Support > Campaigning section of www.landlords.org.uk.
Who does what at CLG? Gregg Clark MP Minister of State
Who does what at DWP?
AIIC
Chris Grayling MP Minister of State for Unemployment
Bob Neill MP Parliamentary Under Secretary of State The Rt. Hon. Eric Pickles MP Secretary of State
Andrerw Stunnell OBE Parliamentary Under Secretary of State Baroness Hanham CBE Parliamentary Under Secretary of State Grant Shapps MP Minister of State
36 UKLANDLORD JULY/AUGUST 2010
Maria Miller MP Parliamentary Under Secretary of State for Disabled People
The Rt. Hon. Iain Duncan Smith MP Secretary of State
Steve Webb MP Minister of State for Pensions
Lord Freud Parliamentary Under Secretary of State for Welfare Reform
AIIC
PUBLIC AFFAIRS
NI squanders money on landlord register In contrast with the attempts to reduce unnecessary public sector costs in government departments in most areas of the UK, it now looks like both a landlord register scheme and a tenancy deposit protection scheme will go ahead in Northern Ireland. The move by the Northern Ireland department for Social Development to push forward with a landlord register appears to contradict its original recommendations that this approach would not be advisable in view of the costs involved in setting up and administering the scheme as well as the various legal problems arising from such a scheme. David Cox of the NLA’s Policy Unit told UK Landlord: “The government department stated at the start of the consultation process it suspected a landlord register was not a good idea, and the consultations with most organisations operating in the sector have confirmed this. We cannot understand how the Northern Ireland executive can now justify spending vast amounts of money on an unworkable scheme when instead it should be looking to encouraging the role of the private-rented sector in supplying housing.” Plans for a landlord register in England were one of the first items to be scrapped by the new Housing Minister Grant Shapps on the basis of unnecessary costs and bureaucracy.
Saving costs for TDP Tenancy Deposit Protection has now been introduced in England and Wales and is likely to be introduced soon in Scotland. The NLA says that if there is going to be a tenancy deposit protection scheme in NI, there must be a choice for landlords to take out an insurance-based scheme as exists in England and Wales. As a cost-saving measure, the Welsh scheme uses the English scheme and since there are only minor differences in NI and English law in this area of housing, it would be possible for any NI scheme to tap in to the English scheme already up and running. A draft bill is likely to be published later on this year.
NLA calls on Scotland to abandon landlord registers With an election on the cards for Scotland next year, the NLA is hoping to build momentum for support for abolishing landlord registration. Proposals to refine the current landlord registration system will add even more red tape for Scottish landlords, according to David Kendall of NLA Scotland. “It’s time to admit defeat – landlord registration is not working, that’s why England is not going to follow us. The vast majority of Scottish landlords are good, decent, honest, hard working individuals who contribute to an essential part of Scotland’s housing market. We don’t need more paperwork and more bureaucracy!” If you want to join in the Scottish Government’s housing policy online discussion on the future of housing, go to http:// housingdiscussion.scotland.gov.uk/.
38 UKLANDLORD JULY/AUGUST 2010
NLA MEMBER BENeFITS
For an up-to-date list visit: www.landlords.org.uk
Suppliers you can trust Look for the Partner or Recognised Supplier logo Vying for your money There are certainly plenty of companies in the marketplace vying for your money! We don’t want to tell you who you should use but we want to try and help you narrow your search. That is why we have launched the NLA Recognised Supplier Scheme. Over the year ahead you will begin to see a database of suppliers who provide products and services that will help you with your day-to-day activities.
NLA PARTNERS Hamilton Fraser Insurance Tel 0800 634 3880 Fax 0845 310 6301 landlords@hamiltonfraser.co.uk www.hamiltonfraser.co.uk Hamilton Fraser is the NLA’s number one choice for landlord insurance. Our policies offer a wide range of protection options to meet your individual requirements, at a price that will suit your budget. From individual properties to large portfolios, we have got the insurance solutions to protect your investment should the unthinkable happen. With some of the most extensive covers in the buy-to-let market and great savings for NLA members why not call and speak to one of our expert advisers.
my|deposits Tel: 0844 980 0290 Fax: 0845 634 3403 info@mydeposits.co.uk www.mydeposits.co.uk
Our scheme is the only one that enables landlords to take and hold deposits themselves. This insurance-backed scheme strikes a fair balance between landlord and tenant and offers the flexibility of being able to retain control of the deposit. The scheme provides evidence-backed dispute resolution and a simple to use ‘pay-as-you-go’ format. Members of the NLA qualify for discounted rates.
NLA RECOGNISED SUPPLIERS Accommodation for Students Tel 0845 351 9911 Fax 0161 332 8261 enquiries@easyafs.com www.accommodationforstudents.com AccommodationforStudents.com is the UK’s No1 website for advertising property to students. It enables students to find their ideal digs fast and make enquiries. Featured at the top of the search engines for all ‘student housing’ related keyword searches AccommodationforStudents attracts in excess of 350,000 unique visitors per month. NLA members qualify for discounts. Acklands Tel 0117 923 7788 Fax 0117 923 8123 support@acklands.co.uk www.acklands.co.uk Acklands Ltd was founded in June 1994 and is well established in Bristol having served the South West, Midlands and London regions for many years. Acklands Ltd is a member of the Institute of Chartered Accountants in England & Wales (ICAEW) and offers NLA members a 10% discount on first year fees. Alliance & Leicester Tel 0800 068 6698 www.alliance-leicestercommercialbank.co.uk/nla Business.Development@Alliance-Leicester.co.uk Alliance & Leicester Commercial Bank is working with the National Landlords Association as a Recognised Supplier providing access to its award winning Free Business Current Account, which meets the demands for better value banking. Alliance & Leicester Commercial Bank is now part of the Santander Group – one of the safest banks in the world.
British Gas Tel 0800 980 4302 MTTPAYGE@britishgas.co.uk www.britishgas.co.uk/multitenancy British Gas can help you to manage your property portfolio by providing a dedicated account manager. We can ensure tenancy changes are managed more efficiently and provide discounts on our maintenance and repair range, as well as energy efficiency advice. The service is offered to NLA members completely free of charge. Bump The Agent claude@bumptheagent.com www.bumptheagent.com
www.bumptheagent.com is a national database of private landlord student accommodation. The purpose of www.bumptheagent.com is to put students directly in touch with private landlords so that both parties can avoid tenant finding fees charged by letting agents. List your property and reach thousands of students looking for accommodation. EnviroVent Ltd Tel 0845 2727 807 info@envirovent.com www.envirovent.com
Our systems are designed to eliminate streaming windows, condensation and mould whilst protecting your investment. We manufacture the world’s most innovative, eco-friendly ventilation solutions saving local authorities, landlords, specifiers & developers vast amounts of money in maintenance and disrepair problems. To help achieve the Decent Homes Standard, EnviroVent offers substantial discounts to NLA members. UKLANDLORD JULY/AUGUST 2010 39
NLA RECOGNISED SUPPLIERS
For an up-to-date list visit: www.landlords.org.uk
E.ON Tel 0845 301 4897 eonlandlordservice@eonenergy.com www.eonenergy.com As one of the country’s leading suppliers of gas and electricity, our products and services are as varied as our customers. Created especially for busy property managers, our dedicated landlord service could help you save precious time, energy and money when letting or re-letting your properties.
Fairhurst Tel 01942 241103 Fax 01942 825689 webenquires@fairhurstaccountants.com www.fairhurstaccountants.com We offer a range of tax services covering both self assessment tax reporting and planning (personal and corporate) in respect of all relevant taxes, providing you with a competitive edge. We are also able to provide a comprehensive range of business and financial planning services to meet your needs.
FlatmateClick Tel 0800 404 9187 customerservice@flatmateclick.co.uk www.flatmateclick.co.uk FlatmateClick enables thousands of landlords and accommodation seekers to come together every day online. If you have a room or flat you want to let then don’t advertise in the paper or with flyers. You can pro-actively search through detailed profiles for the perfect match and keep the agency fee for yourself. NLA Members can claim an Exclusive 10% discount on the subscription/listing fee.
Hallmark Tel 0800 458 1523 Fax 01652 601401 enquiries@hallmarkcorporate.com www.hallmarkcorporate.com We are the UK’s leading utilities management partner for the lettings industry. Hallmark is an established, well respected company who work in association with The Scottish and Southern Energy Group (Southern Electric, Scottish Hydro, SWALEC, Atlantic Electric & Gas) providing products and services that offer benefits and savings to Landlords and Tenants.
Landlord Action Tel 0845 881 0011 enquiries@landlordaction.co.uk www.landlordaction.co.uk LANDLORD ACTION was set up 9 years ago by two landlords frustrated with solicitors charging fat fees for eviction. We offer fixed fees to landlords in eviction, with a free advice line. We are the market leaders in fixed fee eviction and have successfully evicted over 15,000 tenants. Also we have appeared on BBC 1’s War at the Door, and ITV’s Tenants from Hell. NLA members can claim a £15 discount on instruction.
Landlord Response Tel 0844 462 9880 customercare@landlordresponse.co.uk www.landlordresponse.co.uk Landlord Response are true specialists dealing with gas, electric and plumbing requirements for landlords. A unique service to cover property breakdowns and avoid unexpected repair bills, as well as issuing your annual Landlord’s Gas Safety Certificate. Keep your property safe and compliant for as little as 50p per day. NLA members can benefit from Platinum Cover for the price of Gold Cover, a saving of £60 per year.
40 UKLANDLORD JULY/AUGUST 2010
Lawpack Tel: 020 7394 4040 Fax: 020 7394 4041 enquiries@lawpack.co.uk www.lawpack.co.uk Landlords: Need a Tenancy Agreement, Section 21 Notice or Property Inventory? From just £9.99, you can “Download Now” solicitor-approved tenancy legal forms at Lawpack, plus pick up To Let signs, 99p Rent Books, Commercial Leases, Eviction Notices and Tax-Saving Guides. 15% off all Landlord & Tenancy products for NLA members.
LettingZone Tel 01622 720072 Fax 01622 726175 enquiries@lettingzone.com www.lettingzone.com LettingZone the ‘The UK’s Premier Landlord Letting Portal’. Let your property on Rightmove, Findaproperty, Primelocation, Gumtree, Zoopla, Globrix and over 100 other leading letting sites from only £39 + VAT until let, by using our promoted UK Tenant Find Service. Also Full Management Service available from only £60 + VAT per month.
OHS Limited Tel: 0800 834 293 info@ohs.co.uk www.ohs.co.uk OHS the leading independent health safety and environmental management consultancy with offices throughout the country, highly qualified professionals who work with companies and organisations of all sizes making sure that they are fully compliant and in line with HSE directives. Negotiated special prices for NLA members.
Pinnacle Cleaning Services Tel: 0845 202 5757 webenquiries@pinnacle-cleaning.co.uk www.pinnacle-cleaning.co.uk Pinnacle is an elite cleaning company with over 20 years diverse experience in the Industry - including Environmental / Trauma Scene Cleaning, Fire & Flood Restoration and Void Property Remediation. We dispatch experienced and professional emergency response teams 24/7/365 throughout the UK. Up to 15% Discount for NLA members.
Property Owners Directory Tel 020 7722 4334 Fax 020 7722 5335 info@propertyownersdirectory.com www.propertyownersdirectory.com POD is the UK’s leading online recommended tradesmen and property services directory. NLA members are entitled to a 15% discount for a site listing, and can claim a £20 cashback for recommending reliable tradesmen who sign up for a paid listing.
Property Portfolio Software Tel 01925 398 599 enquiries@propertyportfoliosoftware.co.uk www.propertyportfoliosoftware.co.uk Property Portfolio Software provides solutions to help landlords get better organised when managing multiple properties. Our software solutions are designed by landlords for landlords and are guaranteed to save you time, money and effort in running all aspects of your property business. NLA members can claim a 15% discount.
NLA RECOGNISED SUPPLIERS
For an up-to-date list visit: www.landlords.org.uk
Salans Solicitors Tel 020 8290 7745 bromleyLT@salans.com www.salansdirect.com Salans is a full service international law firm globally operating from 19 offices. Within our Bromley offices we have an in-depth understanding and wealth of experience acting for residential and commercial landlords for possessions and outstanding rent arrears. We also specialise in all types of residential sale, purchase and remortgage conveyancing, to include buy to let and shared ownership. We use a competitive fixed price strtegy: NLA members can benefit from a 15% discount from our standard fee. Seddons Solicitors Tel 020 7725 8000 enquiries@seddons.co.uk www.seddons.co.uk Seddons is a Central London law firm with a specialist Property Dispute Resolution team advising landlords on all tenancy problems including rent arrears, squatters and the recovery of possession. We also have a significant commercial and residential property practice with teams for secured lending, commercial contracts and employment issues. Upon verification of their membership status, Seddons will offer NLA members a 15% discount on its usual fees for landlord and tenant disputes. An estimate of fees will be provided at the outset. Sky Communal Solutions Tel: 0844 241 0331 no-reply@skyhomes.co.uk www.sky.com/managers Sky Communal Solutions (part of BSkyB group) equips private blocks of flats with high-quality digital TV. Our communal TV solutions are Shared Dish and Integrated Reception System (IRS). They will meet all your digital TV needs, get blocks ready for the digital switchover, and give residents great viewing options.
SpareRoom Tel: 0845 644 4029 landlords@spareroom.co.uk www.spareroom.co.uk/landlords SpareRoom.co.uk is the UK’s #1 Flatshare website with over 1/2 million visitors per month. Whether you’re targeting students or professionals, there’s nowhere better to advertise your rooms to rent and whole properties suitable for sharing. NLA members receive one week’s free advertising for up to 10 adverts.
The Energy Saving Team Tel: 0800 988 5928 info@TheEnergySavingTeam.com www.TheEnergySavingTeam.com The Energy Saving Team provides government grant assisted insulation & heating to improve the rentability and value of your properties. Reduce condensation, damp, mould & climate change; loft & cavity wall insulation from just £99 each for 5 bed house (saving £977), reclaimable using Landlord Energy Saving Allowance. Typical saving of £365pa on heating bills!
HOW TO JOIN THE RECOGNISED SUPPLIER SCHEME If you use a company or supplier who would be interested in joining the scheme please email: recognisedsupplier@landlords.org.uk or phone Christian Kent on 020 7840 8917 for details.
UKLANDLORD JULY/AUGUST 2010 41
NLA SERVICES
We have a range of carefully selected NLA products and services for busy landlords. Finding the right supplier can be a challenge, especially when there are so many vying for your business. We offer you professional services that can easily be purchased online and each offers dedicated support to answer any queries or questions you may have. NLA services offer discounts, rewards and other privileges for NLA members, including FREE services.
NLA Mortgages
NLA Conveyancing
Best of market mortgages sourced for you
Find the right law firm for you
NLA Mortgages provides a free online mortgage search facility for all private landlords enabling you to source a highly competitive range of buy-to-let mortgage schemes that are researched on a daily basis.
Looking for the right solicitor can be a challenge as it’s so difficult to compare the services in the marketplace at any given time. Our online system enables you to research and compare prices immediately and without the need to make any phone calls. Compare and choose froma range of solicitors by:
• • • •
Research the buy-to-let market yourself Find schemes that fit your expected rental income Cashback available for NLA Members Free support and information helpdesk
Cashback for all NLA members for NLA members on every successful mortgage completion*. Get the right mortgage for you online at
www.landlords.org.uk/mortgages
• • • • •
Price Distance from the property Distance from your home address Recommendation Free helpdesk
£100 cash back
Register now to quote & compare online at
www.landlords.org.uk/conveyancing
NLA EPCs
NLA Tenant Checks
Reliable and professional service from fully qualified assessors
Don’t take a risk with tenants!
EPCs are legally required for the majority of lettings. • • • •
Fully accredited assessors Fast, non-invasive assessments Simple online booking Dedicated helpline to answer any of your questions
From £55 inc. VAT*
for NLA members on every successful property completion.*
If you’re looking to take the risk out of renting then you should always carry out regular checks on your new and existing tenants. • • • •
A choice of Basic or Full Tenant Reference Checks Instant results displayed on screen Simple, online application process Affordability assessment provided with a full tenant check
From £8 for a Basic Tenant check
and £23.00 for a Full Tenant check.*
Register and purchase online at
Register and purchase today to ‘be in the know’ about your tenants at
www.landlords.org.uk/EPCs
www.landlords.org.uk/tenantcheck
42 UKLANDLORD JULY/AUGUST 2010
NLA Inventories
NLA Rent Guarantee Insurance
Protect your property
Save yourself thousands and months of worry
Inventories are a crucial part of any letting agreement. The Tenant Deposit Scheme can rely on an inventory when any disputes arise between a landlord and tenant over any repairs or replacements needed at the end of a tenancy period. • Safeguard your property • Peace of mind for you and your tenant • Ensure you have a secure basis for claims against a tenant’s deposit • Negotiations on the deposit can be dealt with quickly and easily • Select the right report for you
With disputes taking on average 6 months to resolve and the average monthly rent now over £800, you could find yourself thousands of pounds out of pocket if things go wrong. NLA Rent Guarantee Insurance • • • • •
From £73 for an unfurnished, one bedrom property.*
See a sample report and book an interview by registering online at
Professional, reputable and transparent Fully backed by the NLA 24 hour legal helpline Cover up to £2,500 per month for unpaid rental income (up to a maximum of £15,000 or six months rent) Transparent terms and conditions
From £57.75 for 6 months cover
www.landlords.org.uk/inventories
www.landlords.org.uk/rentguarantee
NLA Rent Arrears
NLA Forms
1 in 3 landlords have tenants in arrears
‘Best Practice’ landlord - tenant forms and letters
Acting on your behalf, we can contact your tenant(s) by phone or letter, visit them at the tenanted address, serve notice and undertake possession proceedings. Whichever service you require, you can be sure that we will offer a professional approach to you and your tenant(s).
Regularly updated, it covers over 40 subjects, including:
Here’s what we’ll do on your behalf: • • • •
Contact the tenant by phone and letter Visit the property Serve appropriate notice(s) through the courts Seek repossession through the courts
Only available to NLA members
Protect yourself - register and purchase online at
• • •
Editable, saveable personalised letters & forms Includes tenancy agreements, letters, forms and formal Court documents NLA endorsed for confidence in content and tone
FREE to NLA Members
See full details of the service and register online at
Access NLA Forms at
www.landlords.org.uk/rentarrears
www.landlords.org.uk/forms
NLA Landlord Library
NLA Online Store
All the assistance you need in the format of your choice
Access to a range of landlord resources
Regularly updated, it covers over 40 subjects, including: • • • • •
Regulatory Regime: civil and criminal law Property: licensing, HMOs, energy efficiency Tenancy: tenancy types, rent, tenancy deposits Safety: Housing Health & Safety Rating System Finance: tax, record-keeping, mortgages
FREE to NLA Members
Use the NLA Online Store to book courses, order pre-printed tenancy agreements, purchase fire safety and portable appliance testing equipment, as well as tenant information packs and folders. The Online Store is open to all landlords 24hrs a day. • • • • • • •
Fire Extinguishers and Blankets Carbon Monoxide Detectors Smoke Alarms • Fire Safety Logbook Portable Appliance Testing Equipment Landlord Development Manual Landlord Courses Pre-printed ASTs and more!
Significant savings for NLA members
Access NLA Library at
Take a look at the products, courses and publications available today at
www.landlords.org.uk/library
www.landlords.org.uk/onlinestore
*Only NLA members qualify. Subject to landlord (or tenant) providing the necessary information. Prices correct at time of print. Prices include VAT. Prices subject to change. Terms and conditions apply. UKLANDLORD JULY/AUGUST 2010 43
NLA RECOGNISED SUPPLIER PROFILE
OHS
To further its core objective to raise standards in the privaterented sector, the NLA vets companies that it considers professional and offer good value for money to its members under its Recognised Supplier Scheme.
OHS: helping landlords meet their health and safety obligations OHS is offering NLA members a discount on their comprehensive health, safety and environmental management services that are designed to ensure landlords are fully compliant with the law. John Horsfall, Managing Director, OHS Ltd
NLA members will be aware that there is a substantial body of legislation setting out the Health, Safety and Environmental obligations that all landlords must meet. There are also worrying reports of landlords being taken to court for failure to meet these obligations. OHS Limited has been helping landlords, large and small, to comply with these rules for nearly 30 years. The company agrees all fees in advance of a job being done so that landlords can keep close control of costs. OHS has now joined the NLA’s Recognised Supplier Scheme, offering special rates for NLA Members. Making sure your property is safe OHS is a recognised pioneer in health and safety management, working to the highest standards. The company was originally founded to safely manage asbestos when the dangers of the substance became known, and received the Health and Safety Executive’s first ever supervisory licence. Since then, OHS has expanded its coverage to all areas of health, safety and environmental (HSE) management. Of particular relevance to NLA Members will be Fire Risk Assessments, Asbestos Risk Management, and Legionella and Water Hygiene Risk Assessment.
44 UKLANDLORD JULY/AUGUST 2010
The company works very closely with the Health and Safety Executive and are members of the industry’s leading accreditation bodies. “OHS is ISO 9001, ISO14001 and OHSAS18001 accredited,” says John Horsfall of OHS. “This reflects the fact that our staff are fully qualified to offer health and safety services, and that they give a first class service.” Keeping down compliance costs Having worked with landlords for almost thirty years on a variety of HSE topics, OHS knows that cost is an important factor. The company makes sure that the rates charged are the most competitive, without compromising service or HSE compliance. Its clients range from individual landlords with one property or a small portfolio, to large property companies like St Ledger Homes, EC Harris, Land Securities and Telereal Trillium, all of whom it has worked with for many years.
OHS is a recognised pioneer in health and safety management, working to the highest standards.
For more details, contact OHS on 0800 834 293 or visit www.ohs.co.uk
NLA RECOGNISED SUPPLIER PROFILE
Bump The Agent
Bump The Agent: landlord website for finding student tenants Bumptheagent.com puts students directly in touch with private landlords so that both parties can avoid the tenant finding fees charged by most letting agents. Claude Farren of www.bumptheagent.com
If you are looking to rent out your properties in the highly profitable student sector, the Bumptheagent.com website could save you time and money. Claude Farren, a landlord with eleven properties which cater for the student market, founded the site to help other landlords avoid paying agency fees. His aim is to create a simple and attractive site for landlords to successfully advertise their properties at a minimal price. It costs £20 per year to advertise a property. This means that if you need to let the property more than once during the year, you just need to change the dates of availability on the site.
Creating a level playing field in lettings is important for Bumptheagent.com. The £20 (plus VAT) per property per year fee for landlords to advertise is a flat rate and there is no possibility of paying more in order to gain higher visibility on the site. Use of the site is free for students looking for accommodation. The site has a range of tools available to landlords including sample guarantor forms and standing order forms. Landlords can also use the site’s To Let boards on which they can insert their unique property number so prospective tenants can search for the property on the website.
Creating a level playing field in lettings is important for Bumptheagent.com
Rental property marketing machine Bumptheagent.com invests its revenue in marketing the portal directly to university students. The latest version of the site allows students to log in and save their favourite properties which they can then email to others, for example, people they plan to share with. The site will actively market landlords’ properties with a new facility that will automatically inform students of any property that matches the accommodation search criteria they have registered. Claude makes the distinction between estate agents and letting agents (who cannot advertise on the site) and landlords who run their own lettings business who can of course use the site providing they do not charge a signing up or agency fee. “We need to be transparent with students when it comes to the costs involved,” he recommends. “If landlords normally charge an administration fee, they must include this in the weekly/monthly rent band advertised.”
For more details, see www.bumptheagent.com UKLANDLORD JULY/AUGUST 2010 45
BOOKS FOR LANDLORDS Editor Andy Stern looks at a TaxCafé Emergency Tax Planning Guide designed to help landlords prepare for changes to the Capital Gains Tax regime.
Capital Gains Tax: Emergency Tax Planning Guide By Carl Bayley
Anyone who woke up on 7th May thinking their property portfolio would be safe under a Conservative Prime Minister soon faced a rude shock when the Coalition Government’s plans to raise the rate of Capital Gains Tax to “at least something close to Income Tax rates” were
46 UKLANDLORD JULY/AUGUST 2010
unveiled by the Chancellor within days of his arrival at number 11 Downing Street. In order to meet strong demand to questions such as what might the Government do and when might the tax changes actually enter into force, Carl Bayley has written an authoritative guide to the current regime, asking all the sensible questions you would expect from a shrewd and knowledgeable accountant with expertise in tax. Will taking action to beat the Capital Gains Tax increase actually be worth it in the end? Bayley makes the sensible point that, for example, rushing to sell a property that you did not originally intend to sell for another ten years may not actually help you achieve your long-term investment goals, even if you are able to beat the clock and avoid the new regime. The book looks in detail at various scenarios, via Bayley’s excellent worked examples, in order to analyse the potential outcomes under a new Capital Gains Tax regime. As it was published in advance of the 22 June Budget
Day, its advice is couched in such a way as to allow people to make informed decisions prior to and after the Budget. Taking into account the range of objectives and situations landlords might be in, Bayley asks the crucial question “Can I still beat the increase if I can’t sell my business or investments before it takes effect, or I don’t want to?” and to this, subject to a few provisos, his answer is a definitive YES. NLA members may already be aware of some of the options which include transferring property to a spouse, an individual other than your spouse (for example, your adult child or girl or boyfriend), a trust or a company. This is a timely and valuable book, and will provide many landlords with a starting point for making informed tax plans. By the time this review reaches you the Chancellor’s tax plans will be clear: how to react to them will be made a lot clearer, at a relatively low cost, by buying and reading this book. Published by Taxcafé, recommended price £24.95 (ISBN 978-1-907302-19-0).
UKLANDLORD JULY/AUGUST 2010 47
MORTGAGE MARKET ROUNDUP New lenders on the block The buy-to-let mortgage market continues to offer a limited range of products, although Paul Rockett, Managing Director of NLA Mortgages, says that the green shoots he anticipated a few months ago are visible. “As predicted, there have been some positive signs in the buy-tolet mortgage market with a few new lenders entering, albeit with limited funds or particular criteria requirements, and the return of 80 per cent loan-to-value products,” he told UK Landlord. “Also, specialist buy-to-let lender Paragon has stated in its latest accounts that it expects to return to lending this year.” Paul reports that NLA Mortgages has recently had access to some highly competitive products where the lender has restricted distribution to a small number of mortgage intermediaries to test the market and control business volumes. “This all points to a growing confidence in the buy-tolet market and we should start to see some more competition towards the end of 2010,” he says. Gareth Lowman, of Savills Private Finance, agrees: “In the past month or so, the likes of Kensington and Paragon have either re-entered the BTL arena, or they have announced their intention to do so. Furthermore, names that will be unfamiliar to landlords, such as Aldermore Bank and Precise Mortgages have also
launched BTL offerings. And while the brands are unknown, those running the lenders are familiar faces in the industry with a wealth of experience.” Landlords split on fixed and trackers NLA Mortgages recently conducted an analysis of its new business for the first quarter of 2010 which found that whereas more residential mortgagors appear to opt for variable rates (4 out of 5 in Q1 2010 according to John Charcol), professional landlords running tightly controlled businesses are just as inclined to fix their expenses, demonstrated by the near 50/50 split in Q1 2010 between fixed rates and tracker rate applications. News of higher than expected inflation figures and some speculation that the US Treasury will increase interest rates may have influenced this decision. The more even split between fixed rates (52 per cent) and tracker rates (48 per cent) is, a dramatic change to the previous quarter when 70 per cent of applications were for trackers. “This is an interesting trend as rates over the last three quarters have fallen consistently, with the average tracker rate offered over 0.75 per cent cheaper than the average fixed rate, but the tracker rate has the added risk of rising beyond
the fixed rate if interest rates rise,” comments Paul Rockett. “The further increases in inflation have brought into question the Bank of England’s policy of keeping base rates low and there is now strong speculation that interest rates may have to rise next year to counter the inflationary pressure.” Purchases continue to dominate the lending in the buy-to-let mortgage market; 59 per cent of all buy-to-let applications received in Q1 2010 were for purchases. However this is a fall from the 69 per cent and 66 per cent in the previous two quarters, suggesting that we may yet see growth in the remortgage market due to lenders increasing their standard variable rates and the prospect of interest rate rises in general. Market deals NLA Mortgages best selling products in June were: • 4.60 per cent on a 2 yr tracker up to 75 per cent LTV with a 2.75 per cent completion fee. • 5.29 per cent on a 3 year fixed up to 75 per cent LTV with a £1,100 completion fee. • 4.69 per cent on a 1 year fixed up to 80 per cent with a 2.5 per cent completion fee.
Lending rises slightly in April
Remortgaging by buy-to-let landlords falls
The total net lending secured on dwellings increased by £0.5 billion in April, stronger than the March rise of £0.2 billion but below the previous six-month average of £1.3 billion, according to statistics released by the Bank of England in June. The twelve-month growth rate fell to 0.9 per cent. The three-month annualised growth rate fell to 0.8 per cent, from 1.1 per cent in March. The number of loan approvals for house purchase (49,871) in April was higher than the March figure (49,008) but below the previous six-month average (53,098). The Bank of England’s figures indicate that approvals for remortgaging (26,295) were lower than in March but in line with the previous six-month average (26,203). Responding to the Bank of England lending data, Council of Mortgage Lenders director general Michael Coogan commented: “Now that we have seen mortgage approvals data for the first four months of this year, it is becoming clearer that the risks associated with our lending forecast for 2010 are on the downside. We are predicting gross lending of £150 billion this year – and net lending of £15 billion – but are keeping our forecasts under review as we are tracking below these levels to date.” The CML points out that house purchase activity has been lower than in the last half of 2009, although it believes this reflects the stamp duty holiday, which boosted activity towards the end of last year and caused the quiet start to 2010. Meanwhile, although lower interest rates are benefitting borrowers, they are removing the incentive to remortgage, which is also bearing down on the lending figures.
Remortgaging by buy-to-let landlords has fallen to its lowest level for five years, according to specialist lender Paragon. According to the lender, remortgaging accounted for 28 per cent of buy-to-let business handled by brokers during the first quarter of this year, down from 30 per cent in the final quarter of 2009. This is the fifth consecutive quarterly fall and the lowest level since the first quarter of 2005. The proportion of business from landlords extending their portfolios also fell during the period, from 52 per cent in the fourth quarter of 2009 to 45 per cent during the first quarter of 2010. Property substitution, where the landlord is purchasing property to replace one being sold, rose from 2 per cent of business to 5 per cent. John Heron, Paragon Mortgages’ managing director, said:“There is little incentive for landlords to move from their existing lender, and even if they wanted to, there is a serious lack of buy-to-let mortgage products available.The low interest rate environment means that most landlords with a mortgage are financially better off staying on their reversionary rate with their existing lender rather than remortgaging to another lender.” The options for landlords wanting to move to a different deal are still relatively limited. According to Moneyfacts, there are only approximately 300 buy-to-let mortgage products available today, compared with over 3,500 at the market’s peak.
48 UKLANDLORD JULY/AUGUST 2010
UKLANDLORD JULY/AUGUST 2010 49
HOUSE PRICES AND LETTINGS SURVEYS
House Prices House prices fall in May, with the outlook for 2010 now uncertain The latest house price index from Communities and Local Government (CLG)
Regional trends
records that prices rose 0.7 per cent between February and March and by
Annual average house prices rose in England (10.1 per cent), Scotland (7.2
2.8 per cent in the quarter ending March 2010. This compares with a rise of
per cent) and Wales (8.1 per cent) but fell in Northern Ireland (-6.9 per cent),
2.9 per cent for the quarter ending December 2009 (seasonally adjusted).
according to CLG. Average mix-adjusted house prices rose in six out of nine
The mix-adjusted average house price in the UK stood at £205,598 in
English regions between February and March (not seasonally adjusted). The
March 2010 (not seasonally adjusted). The main house price index sources generally reported falls in May, while Land Registry figures confirm that prices fell by 0.2 per cent in May.
largest increase was in the West Midlands (2.6 per cent) and the largest fall in the East of England (0.6 per cent). All regions have seen an increase in house prices over the year to March. The largest being in London (15.6 per cent) and the smallest in the North
• House prices in England and Wales fell by 0.2 per cent in May, according
West (5.1 per cent). There was also annual growth in the South East (11.3
to the Financial Times house price index. It remains unclear as to whether
per cent), South West (9.7 per cent), West Midlands (9.0 per cent), East of
this is the start of a sustained decline. Academetrics, which prepares the
England (8.4 per cent), Yorkshire and the Humber (8.3 per cent), North East
survey for the FT, believes the market conditions in May were influenced
(5.7 per cent) and East Midlands (5.2 per cent).
by the suspension on 20th May of Home Information Packs (as a prelude to
Average mix-adjusted house prices in March 2010 were £212,266 in
their being scrapped) and by the Government announcements on 12th May
England, £165,106 in Scotland, £150,648 in Wales and £174,172 in Northern
on increased Capital Gains Tax on property investments. “Together, these
Ireland. The English region with the highest average house price in February
propelled more homes onto the market and thus adjusted the demand/supply
remains London at £326,924. The lowest average price was in the North East
balance. Net new mortgage lending was lower in April than anticipated and
at £139,186.
remortgage activity remained very low. What all this suggests is a market which is delicately poised and easily buffeted in one direction or another by slight changes in circumstances.” The average price of a home in England & Wales is now £220,352. At this level, it is down £11,476, or just 5.0 per cent, from its peak in February 2008 of £231,828. • The Land Registry reported that prices went down by 0.2 per cent in May, which marked an annual price rise of 8.2 per cent. According to the Land Registry, the average house price is now £165,314. • The Halifax house price index reported that house prices fell by 0.5 per cent in May, which follows a 0.1 per cent decline in April. Halifax believes this mixed pattern of monthly price rises and falls so far this year is consistent with a slowing market and is in line with its view that house prices will be flat during 2010 as a whole. Prices in May were 6.9 per cent higher on an annual basis largely because price movements in March and April compared favourably with the significant declines recorded in the same period in 2009. Halifax says the average house price is now £167,570; 16 per cent below its August 2007 peak. • House prices increased by 0.5 per cent in May, according to Nationwide. This brings annual house price inflation down from 10.5 in April to 9.8 per cent in May, and the price of a typical house to £169,162. April’s figures leave house prices 9.5 per cent below their October 2007 peak. The 3 month on 3 month rate of change rose from 1.1 per cent in April to 1.7 per cent, as February’s fall in house prices dropped out of the most recent three month average.
50 UKLANDLORD JULY/AUGUST 2010
Source DCLG
Regional house price indices 12-month percentage change for the latest month
HOUSE PRICES AND LETTINGS SURVEYS
Sales at auctions drop back Latest data from RAPID (Residential Auction Property Investment Data) covering April 2010 has indicated that sales of lots at auctions dropped to 60 per cent from a recent average of above 70 per cent. RAPID, which is compiled jointly by auctioneer Allsops and the Essential Information Group (EIG), points out that this has been against a backdrop of an uncertain general election result and continuing worries about the National and European economies. “With the election behind us and a solution to the Greek crisis in hand we should be able to look forward to more positive results,” said David Sandeman of EIG. The number of residential lots offered was down just over 5 per cent in April 2010 compared with April 2009, while the number of lots sold was down by 20 per cent. The residential market saw
52 UKLANDLORD JULY/AUGUST 2010
falls on both the monthly and yearly figures, though the figures for the last quarter (February to April) showed a small increase in lots offered and the amount raised for the quarterly figures. This trend is confirmed by figures released by Allsops at the end of May for a two-day auction held in London on 25 and 27 May that saw 85 per cent of lots sold, raising £58m. A higher proportion of lots than at previous sales were located in Scotland. 33 lots in total were offered north of the border for administrators and formed part of a £6m disposal of 47 lots. They drew strong competition from local buyers, some of whom attended although many bid remotely. Lots in Aberdeen, Glasgow and Edinburgh were significantly popular. In all 216 distressed lots went under the hammer, making up 50 per cent of the auction overall.
HOUSE PRICES AND LETTINGS SURVEYS
Lettings Surveys Tenant demand highest since start of 2009 Over the three month period to April, tenant demand for residential property continued to rise and did so at the fastest pace seen since January in 2009, with “rents improving markedly on the back of continuing supply shortages,” according to the latest RICS lettings survey published in April. Thirty per cent more surveyors reported a rise in demand for property than a fall over the period. Demand for houses continued to outstrip demand for flats although the latter saw a significant improvement in the net balance compared with the previous quarter. New instructions continued to decline for the third consecutive quarter, but at the slowest pace since Q3 2009. The RICS survey found that rents improved markedly with more surveyors reporting a rise in rents than a fall. Surveyors are increasingly optimistic that rents will continue
54 UKLANDLORD JULY/AUGUST 2010
to rise in the next three months, with rental expectations edging up to +36. This is a high watermark for this survey. The number of landlords seeking to sell their property at the end of a lease has risen over the quarter to 5.2 per cent. This is the first time since Q1 2008 that the figure has risen above the long run average of 5 per cent. From a regional perspective, tenant demand was strongest in London and the East, with improvements across all regions other than the South West where demand moderated. New instructions were once again down across all markets, with the Midlands and Wales experiencing the greatest fall. Rents improved in all regions, with London and the East showing the greatest rises, while expectations continue to increase across all regions. Gross yields improved in all regions with the North being the exception to this,
where they have broadly stabilised. The proportion of new lettings to private individuals improved marginally to 72 per cent, whilst the share of new lettings to companies fell back to 8 per cent from 10 per cent. The proportion of lettings to students increased from 5 per cent to 6 per cent, and the share to social tenants remained largely unchanged. The proportion of new lettings to ‘other’ tenants remained unchanged from last quarter.
UKLANDLORD JULY/AUGUST 2010 55
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The National Landlords Association President
Geoffrey Cutting
Chairman & Interim Chief Executive
David Salusbury
Communications Head of Communications Policy Manager Public Affairs Officer Policy Officer Media Relations Manager Press Officer
Simon Gordon Chris Norris Vincenzo Rampulla David Cox Steven Hilton tba
Editor NLA Publications
Andy Stern
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Louise Gale
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Marketing Executive
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Affinity Marketing Manager Marketing Assistant
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Member Services Manager
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Telephone Advisers Chris Hellings, John Coyne, David Mclean, Tesh Rai, Jilly Westcombe-Evans, Gordon Brierley, Jackie Taylor, James Fraser, Alan Jakeway, Pinday Wright, Catherine Behdad, Sally Blunt, Stephanie Traynor Finance & Membership Administration Director of Finance and Company Secretary
Patrick Jacobs
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Membership Administrator
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Subs renewals/queries/change of address Tel: 020 7840 8937 E: membership@landlords.org.uk To purchase Tenancy Agreements Tel: 020 7840 8900 General Correspondence: 22-26 Albert Embankment, London SE1 7TJ Tel: 020 7840 8900 Fax: 0871 247 7535 E: info@landlords.org.uk www.landlords.org.uk
Regions Director for the Regions Regional Coordinator Regions Support Officer
Barry Markham Sally Thorn Lyra Haldane
England East of England Regional Representative Lynsey Sweales Local Representative (Bedfordshire, Cambridgeshire, Essex & Hertfordshire) James Fraser Local Representative (Norfolk & Suffolk) Graham Walker East Midlands Local Representative (Derbyshire, Leicestershire & Nottinghamshire) Local Representative (Northamptonshire) Local Representative (Lincolnshire & Rutland) London Regional Representative Local Representative Local Representative Local Representative Local Representative North East Regional Representative Local Representative (Teesside) Local Representative (Tyne & Wear)
Christine Darvill John Socha Richard Withington Maryann Pearce EuGin Song Richard Blanco Yvonne Baisden Philip McGriskin Johnny Lighten Richard Hutchins Bruce Haagensen
North West Regional Representative
Tom Reynolds
South East Local Representative (Kent) Local Representative (Berkshire, Buckinghamshire & Oxfordshire) Local Representative (East Sussex) Local Representative (West Sussex) Local Representative (Hampshire)
Marion Money David Kybett Tony Richard Susan Bryer Ken Staunton
South West Local Representative (Wessex) Local Representative (Dorset) Local Representative (Cornwall, Devon & Somerset) West Midlands Local Representative (Staffordshire, Warwickshire & West Midlands) Local Representative (Shropshire & North Wales) Yorkshire and the Humber Regional Representative Local Representative (South Yorkshire)
Lesley Dove Steve Bartlett Refer to website Mary Latham Julie Woolfenden Paul Gott Teresa Galley
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Connor McCann
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Wales Wales Representative Local Representative (North Wales)
Lee Cecil Julie Woolfenden
Local Representative (South Wales)
Vince Botham
The Aims of the NLA The National Landlords Association aims to establish itself as the leading national representative organisation for private landlords. It seeks to raise standards and encourage best practice in the private rented sector, principally by helping landlords to be aware of their obligations and responsibilities and by codes of practice. It lobbies government and other national and supra national bodies with a view to influencing public policy for the legislative and regulatory environment affecting the letting of private residential accommodation. It seeks to create an effective regional and local branch network that can work in co-operation with local and devolved government, and works in co-operation with non-government organisations where there is a common interest in the private rented sector. It develops, promotes and offers a range of services designed to meet the needs of private landlords.
58 UKLANDLORD JULY/AUGUST 2010
PROPERTY FOR SALE Yorkshire & the Humber
South
London SE15
Doncaster • 6 bedroom HMO (House in multiple occupation) • Tenanted • £350,000 Two properties for sale due to owner emigrating. 6-Bed `HMO` Registered town house and end terrace Dentist +2 bed +1 bed sc flats planning permission for extension to Dentist same row. • Larcel - 07967 221215, pydubai@mailme.ae
Property For Sale Adverts can be booked for as little as £40 (£50 for non-members). For more details visit: www.landlords.org.uk/propertyforsale or call 0117 330 8370
Berkshire - Newbury • Tenanted 12 bedroom HMO Superb Investment opportunity. 12 bedroom, Victorian 3 story terraced house. HMO licensed in desirable area. Planning for conversion into 5 flats. Annual rents £53k. Yield 12% • £435,000 • Alan Burgess - 07774 259774, • Stuart Stevens - 07884 226260, ashton789@gmail.com
• • •
6 bedroom Semi-detached house Untenanted • £634,995 Tesh Rai - 07956920323 or 0207 693 1168 buythishouse@tiscali.co.uk
Large semi-detached Victorian house. OS parking 6/7 cars. Possible conversion into large HMO selfcontained bed-sits or B&B; planning permission one bed self-contained flat Viewing highly recommended www.houseforsaleinsouthlondon.co.uk for detailed information.
UKLANDLORD JULY/AUGUST 2010 59
LETTERS & EMAILS Letters to UK Landlord are welcome and should be sent by email to editorial@uklandlord.org.uk or by post to The Editor, UK Landlord, 22-26 Albert Embankment, London SE1 7TJ.
e
Using the Foxtons case I am a member of the NLA and have recently been in dispute with a local letting agent, One Stop Lettings in St Leonards in East Sussex, who have not been adhering to their association’s code of conduct (The Property Ombudsman). When I took over the tenancy myself with the same tenant the letting agency took me to court as they said that under the terms of their contract they were owed commission as the tenant was still living at the property. I have been fighting the case based on the well documented Foxtons case, stating that their terms and conditions are unfair. I lodged a counter claim stating that there was no contract as they broke it first by failing to adhere to their association’s code of conduct.
One Stop decided to use the court mediation service to resolve the dispute. The case was conducted by phone and has resulted in One Stop cancelling all contracts and invoices to me and repaying the tenant their deposit and me my contingency monies. I have been contacted by two other landlords who use One Stop who have similar complaints. If you would like further information I would be happy to supply it as One Stop obviously now realise that they can’t expect to be paid when not doing anything for the money. Thank you NLA Advice Line staff for your assistance with this dispute and giving me the confidence to deal with this issue. Nigel Woods
new C4 planning classifications
I note you have recently covered some aspects of these new regulations. The area of Selly Oak in Birmingham is a student hotspot and has been for many years. Birmingham City Council have designated this entire area as an “Area of Restraint” and have rejected all applications in the area so far and the advice I have received from them is that they will be rejecting all applications. This has immediately stopped tens of sales going through as we advised our buy-tolet landlords of the new regulations and means that thousands of pounds have been wiped off the value of family homes in the area if indeed they can sell them at all! Because of course, what family actively wants to move in a student
area? One of our landlords lives at the very edge of this area and is moving away. He would like to let his property to students, however, the advice from his pre-planning application is that his application would be rejected. He is now faced with the prospect of trying to let the property to a family; the possible rent achievable is nowhere near likely to cover his mortgage payments as he purchased the property when its value was much higher as it had the potential to let to students; his alternative option is to attempt to sell the property – if he does he will make a huge loss. Patrick Garratt Director, purple frog Birmingham
Checking LHA rental rates yourself I recently had a tenant who, having suffered bereavement was unable to fully pay the rent. Naturally she came to me and we agreed a solution. Next she went to the council to ask for financial help and was told that her rent was too much. She was understandably distressed and felt unfairly treated. I also felt distressed as a profit is fine but exploitation is not! So I tried to check comparables in her area on ‘The Rent Service’, and found its replacement, the Valuation Office Agency (VOA). The VOA has links for Fair Rent, Housing Benefit, Electronic Rent register, and Lettings Research as well as checks for Council Banding, Rates and LHA Direct. LHA Direct has a quick calculator for tenants renting accommodation from a private landlord to calculate the possible amount of Housing Benefit available to them from their local authority. Once you remember to check the box to confirm that you’ve read the Ts&Cs, you can use a Local Authority or Postcode search to see possible housing benefits, based on the number of bedrooms you are entitled to and which LHA rate applies. It was useful to check the advice she was given and, thanks to helpful advice from John Socha at a London Landlords forum, I was able to give her reassurances about private rental rates. And my tenant? She’s recovering slowly from her loss and is happier now she understands LHA. VOA website http://www.voa.gov.uk/, enquiry line 08450 264696. Carol Wilson
The letters on this page express the views of those who wrote them and the NLA cannot take responsibility for their accuracy or for the views expressed.
60 UKLANDLORD JULY/AUGUST 2010