Monthly Archives: September 2011

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By Mike Edwards

Rents rose by 1.2% in August – the largest monthly increase in a year – but tenant arrears increased for the first time since April, according to the latest buy-to-let Index from LSL Property Services plc. The average rent increase to £713 per month across England and Wales in August, surpassing the previous record high of £705 in July. This is the largest monthly increase since August 2010 with rents rising fastest in Wales and the South East, where both saw increases of 2.1%, closely followed by London (1.5%) and the South West (1.3%).

The only regions to see a monthly fall in rents were West and East Midlands where prices dropped by 0.4% compared to July. Annual figures show that London has seen the highest rental figures, with rents hitting a new record high of £1,025 per month in August, an annual growth of 6.6% equivalent to £63 per month. According to even more recent figures the average rent in Greater London according to tenant referencing specialist HomeLet has now increased to £1,202. This is an increase of 12.2% compared to the same time last year but over the same period; the average salary of tenants in the region has increased by just 2.4%.

LSL also report that annual returns on rental property improved in August after annual decreases in property prices slowed. The average total annual return in August rose to 2.6%, as capital losses diminish. However, there are signs that tenants are already feeling the strain of the rent rises as tenant arrears increased for the first time since April, with 10.7% of all UK rent unpaid or late by the end of August. This is up 9% compared to the previous month. Unpaid rent totaled £300 million across the UK in August, up 19.5% from the £251 million unpaid in July.

However, August figures always show an increase in arrears because the holiday season often takes its toll on tenant arrears, with many households squeezed by summer holiday spending. While arrears may be expected to fall back into line in the short-term, the growth is indicative of the mounting pressure facing tenants. With rents rising so quickly, soaring inflation and an uncertain economic outlook as evidenced by the recent turmoil yet again in the markets, over the long-term one can only anticipate that rental arrears will become a growing financial problem for landlords.

By Steve Roulstone

One of the basic but most important principles behind what we do as Letting Agents is the ‘Law of Agency’ which covers our responsibility to our Landlords. I have referred to this in my blogs before, but it is not something that is heavily reported on and a principle which I believe a large amount of Letting Agents do not understand. The basis behind the principle, is that Law of Agency describes our relationship with the Landlord, who, of course first and foremost are our customer, but it is the greater level of responsibility that Agent of the Landlord brings with it that is not understood.

The Landlord says so.

Under the Law of Agency, as long as what we are asked to do on behalf of the Landlord is legal, we must follow the instruction, in exactly the manner in which the Landlord asks us so to do. It is not that difficult to understand and if you look up the meaning of the word Agency in Wikipedia and you will understand that this is not just a wording that describes a Supplier and Customer relationship, rather one that carries a very specific requirement on behalf of the Agent, in the eyes of the law.

So often comes to mind.

It is not difficult therefore to imagine scenarios in our industry where problems can occur and because it is something that I repeatedly quote when discussing cases with our own office in Stafford, it is never far from my mind. The latest scenario surrounds two Landlords who have changed their mind over what they expected from their Tenants when they were vacating property at the end of Tenancies and whilst it would be wrong to go into any detail at all, both surrounded a change of mind in what they expected the Tenants to do.

Tenants are correct!

The problem being that it falls upon us to carry out the Landlords wishes, providing they do not break any law, to the full. So even though we know what we are requesting is incorrect, we must still carry this through. Of course should the Tenant then come back to us and state that we know the opposite to what we are asking, it is still our role to confirm the Landlords wishes and at no point should we show any indication or make any statement that the Tenant is correct in what they say.

Deposit system.

 Of course the problem becomes a little more relevant when the request surrounds the Deposit and what the Landlord is requesting has financial implications, but no matter! Under such circumstances it is a very small leap to a disputed Deposit and all the work encompassed within the system for the Agent. So here we are, knowing that the decisions made by the Landlord are probably going to lead to his losing his case (or of course it could and so often is the other way round!) but we still have to go through the process and present the case in the best interest of the Landlord and that is what the Law of Agency is all about! But should we openly tell the Tenant the Landlord is wrong, or ever be seen to place the interest of the Tenant above the interest of the Landlord then we place ourselves in a position where we can be pursued legally, for breaking our role as agent of the Landlord! This is what is not understood, in my belief by so many Letting Agencies in this Country.


Of course, even though we may disagree and know that the claim is not correct in its substance, we do not have to perjure ourselves, because should the matter become legal or even subject of a counter claim by the Tenant, when asked what happened behind the situation, we do then have the opportunity to tell it as it is. I have known a situation where legal representation on behalf of a Tenant asked for a written statement from the Agent and of course in sending the statement (which confirmed the Landlord had changed his mind over approval of decoration) the Tenant’s case was proven.

Principle holds.

The point is that in asking for the money from the Tenant we are following the Landlords wishes, and that is what we must do, when asked to confirm what we knew of the situation (by somebody such as a TDS adjudicator) we of course tell the truth as I for one would never perjure myself, but with an eye to the Law of agency, I will advise the Landlord of my feelings and point out that should I be asked what I knew of the circumstances, I would only tell it as it is!

By Steve Roulstone

For my second Blog review, I have chosen one that I posted last July under the Property Landlord advise banner ‘Advertise on the Web or in the Press’ Not difficult to work out what is was about and my conclusion at that time was that if we wanted to continue to be visible to our Landlords, we needed to continue to advertise in the press, even though Tenants would almost exclusively use the Web.

Location Location.

One factor that I did not mention in the original Blog, is that for the majority of Tenants, the local press is not an option, as they find themselves moving to an area that they are unfamiliar with and of course local papers, which are the media for Property advertising are only available locally! Therefore when you are re-locating, the web is the only answer.

Few changes.

In fact, what has happened in the last year has hardly affected our decisions in this area at all. It is still the case that we need to advertise in the press so that Landlords can see that we are active and of course, the larger the advert (number of properties) the larger the image of the Company! This is especially important where we are in Stafford, because we have a large Farming Community and the importance of the local paper is not difficult to envisage. Interestingly, in Stafford, this has now developed such that it is the free papers that carry the Property sections. Therefore when we check with Landlords, it is the free papers that are being read and through which we are located.

Close second

Just behind that is of course what every Agent would wish for, recommendations, which still play a massive part in supplying new Business, but being located on the Web and I am happy to confirm, because of our postings through these pages, is growing year on year, but this has bought about a different scenario which cannot be ignored, when we decide where we are going to spend our hard earned advertising budget!

Where did they go?

In these austere times, the image of all Companies has to be considered. Any change has to be trumpeted and well planned as it is far too easy for potential customers to come to the wrong conclusion. I well remember when I started, the Agent who boasted of being the ‘biggest in town’ started to run in too problems. How did I know, well instead of taking a full page advert every week, they reduced in size, until eventually taking a quarter page. Good saving you may say, but what they did was reduce the size of the print, so that the advert read exactly the same but on a quarter scale!

Conclusions drawn.

The conclusion was clear for all to see and that is why I asked if they were for sale and indeed they were. After many gallons under the bridge and a decision not to purchase, the Company no longer exists and all local agents took a share of there portfolio when they closed (the cheaper option!) but the message was clear, manage all changes and be aware of your image. So to stop advertising in the press at all and those potential customers I mentioned, may come to the wrong conclusion and what we do not need is for that conclusion to throw doubt on either our remaining existence, or indeed our financial capabilities. Consider this, Landlords do not want us to earn an excessive return (Never a realistic proposition) but will also go elsewhere if they think you are in financial difficulties. Not a rumour I would like to be involved with, so the advertising in the press continues, but without doubt, its days are finally numbered.

By Steve Roulstone

As I stated in my last blog, it has been one of those weeks where recurring issues have chosen to raise their heads all at the same time and the latest one that has attracted the attention of my ‘electronic pen’ is that of Tenants decorating a property, either with or without permission!! This week it has been one of the latter that has caused the problem and because of this, I felt these pages would be a good way of clarifying exactly what should happen and what is or is not allowed for Tenants wishing to decorate in a rental home.

Good call.

Firstly, unlike many of my compatriots in this industry, I appreciate where Tenants are coming from when at a viewing they ask if they can decorate. I can see that the person asking (it is usually a Female who would ask the question) does so because they wish to make the house their own and put their own stamp on what they perceive as their future ‘home’. It can be disappointing for a Landlord to be asked after they have just completed decoration in the neutral colours we suggested, so unless decoration is a real issue, we normally say not for the first six months, after all, as we explain, if the Tenants decide to move after six months, then we would rather they saved their money!

Without knowledge.

This is the scenario that we all fear and I well remember the first time this happened to me, when  a Mother, wishing to provide her kids with a bedroom that was definitely their own, decorated one bedroom in red, black and white Manchester United wallpaper, complete with gold and red crest and the second bedroom in Barbie pink! It was not just that the wallpaper was garish, but also because it was job had very badly carried out and even after removal of the paper, the paintwork resembled a poker dot finish rather than a normal painted finish.

The correct way.

Of course permission to carry out decoration should not and cannot be unreasonably withheld and that means that a system should be in place so that approval can be sought. This should include a written request from the Tenant including colour and paper samples, which will produce a written response from the Landlord either saying yes or no to the suggested scheme. This is because it is unreasonable to ask that a bedroom should be painted deep purple, no matter what the reason for the request, so it is therefore NOT unreasonable to refuse permission. But with acceptable colours a written acceptance ensures there is no comeback, either for the Tenant, or the Agent!

Professional Decorators.

But Tenants should be made aware, that even if the Landlord does accept the scheme itself, they will (and should) expect a professional finish in carrying out the work. I have known Landlords insist that any work is carried out by professional decorators and if the property has been decorated in this manner in the past, then to request painters and decorators to carry out the work again, is reasonable. But to allow people to carry out the work themselves does leave the standard of the work squarely on the shoulders of the Tenant and if they fail to carry out the work well, with badly fitting paperwork and the edges of paintwork not defined, then it is perfectly reasonable for the Landlord to insist the Tenants pay to have the room returned to its original state and condition.

Confirmation is everything.

This is a judgement call for both Landlord and Agent and in most cases is dealt with as previously mentioned by ensuring letters are in place, with perfectly clear obligations contained in the letter and with photographs of both before and after. If doubt does exist, then permission could be given for just one room, such as a bathroom or small bedroom, to judge the standard of decoration achieved prior to allowing any further work to be carried out. Either way this is a major part of Managing a property and should be taken seriously, and dealt with professionally to ensure mistakes are avoided for all concerned. But even though we advise all Tenants of the procedure before  commencement of all Tenancies when we discover that decoration without permission on a property visit we know the consequence will more than likely, not be good!

By Steve Roulstone

In June last year, I posted a blog entitled ‘The truth behind the Rental Myth’ and as part of a new section in the Castle Estates blog and because we have now been posting for well over a year, I have chosen this as the first in a new section where I will review what was originally written and comment on where matters have developed since the initial posting.

Initial intent.

I wrote this because despite ten years in the industry, I had recently been asked about the old chestnut of how did I cope with Tenants trashing property, when in fact it hardly ever happened and was in any case on the decline, so I wanted to say exactly what it said on the tin! Interestingly, whilst that is still the case and with regular property visits we have a method designed to give us an early warning system anyway, it was the rest of my comments that have been the reason for me choosing this Blog as a target for an update.

Renting on the increase.

My prediction that renting would become more popular and that what Tenants were doing was following a trend because of how our market suited a lifestyle was, as we can now see, exactly what has happened and only recently, I have commented again on how this lifestyle choice is what commentators are failing to observe when looking at market trends and commenting on them.

Legal options on the decrease.

What I did not foresee at that time, was that the Government, which of course had just changed, would decide to drop the recommendations of the Rugg review and fail to bring in the long trumpeted and as readers of this blog will already know, what I believe is needed for our industry, legislation  to introduce Agent and Landlord registration. This remains an issue for me and at a time when our market is growing at a pace never seen before, it does not marry that any new start Letting Agent will be struggling to get in front of the Landlords needed to grow the fledgling business.

Every Agent in town.

This is simply because the Estate Agents of this country turned to what it has perceived as its poorer sibling for so many years, to rescue its own business when the house sales market collapsed. Please do not misread what I say here, because there are plenty of very good Estate Agents that have turned to the Lettings market to survive, but I am equally sure that we will see and hear about (my bet is they will not differentiate between Estate Agents and letting Agents when reported!) stories of bad management as time progresses and problems do appear.

Here is an irony!           

The irony may well be that what is reported is property that has been trashed and my initial point will have travelled full circle! Because there is no doubt that bad management is one reason why houses do end up getting damaged. The why is a different story and not for this short article, but what I would hate to see, is our industry suffer (by way of reputation) because of Estate Agents who have jumping the fence purely out of necessity, ending up being the root cause of bad press for the Lettings industry and by association, Letting Agents as a group!

By Steve Roulstone

Well it only lasted for ten minutes, but I for one would like to thank the BBC for actually doing what I have been pointing out for what seems like years – if you are going to discuss the Rental Industry, get a professional in to do it! Alongside a representative from Shelter and from a leading London Estate Agent, the BBC invited Ian Potter of ARLA to join the discussion about where the housing market is going in relation to supply and growing demand.

UK is larger than the South East.

It was also good to hear it being pointed out to the Estate Agent world, whose representative initially quoted facts and figures for the London market, that this is a larger Country and that what happens outside of London is not only different, but that it matters just as much – well done Ian!

Supply and demand.

The main points raised in the short debate (longer than would have been allowed on TV so not complaining!) was that the market is reacting to supply and demand and that availability and prices reflect exactly what is happening in the market at present.  The equality between wages and deposit requirements, now and thirty years ago when deposit requirements were approximately the same was noted with great interest and spoke volumes about where modern priorities now lie. It was also made clear that more Landlords would buy if the property was available to enable them to invest, but it was a shortage of property that was delaying them doing so.

Family needs catered for.

 It was also muted that more family homes were required, to enable couples to settle and start a family in the rental sector, rather than waiting until they could buy before they did so. This is a subject that I agree wholeheartedly with and have backed up with property that My Wife and I have purchased for our portfolio, which are all Family homes. Now here’s an idea, if the Government wants to do something to get the market moving and solve an issue which could if ignored have an impact on birth rates, how about encouraging the Landlords with the money to buy the family homes that are not selling?

The difference.

 The plea that Ian Potter of ARLA made loud and clear in the programme (although I am still unsure what level playing field was being talked about?) was that Estate Agents, Letting Agents and Landlords be given professional status through Government legislation. It was good to hear a plea for professionalism and to see that other agencies, in this case Shelter, agree. It would have been nicer if it could have been embellished upon, but I have to accept it was not the central theme of the discussion.

A good shout well made!

The point was however clearly there for all to hear, that through professional agencies, would come professional services and the minefield that can exist for Tenant and Landlord alike, should they suffer the consequences of dubious management by the rogue agents that continue to give our industry a poor reputation, could help to be avoided. So well done Ian, and thank-you BBC for bringing in a Professional from our Industry. 


By Steve Roulstone

I recently commented on how the BBC in a recent report, jumped to conclusions without researching the market to back up the assumptions that they confirmed on air. Namely, that not buying your own house was bad for individuals and supposedly the Country as a whole. There is no great surprise here because the BBC loves to report on the property market in a negative manner, I wish I knew why, but can only surmise as to the reason!

Endesleigh understand!

So it was with great pleasure that I found an article pointing out that by way of a survey that had been carried out, my own findings, from dealing with Tenants on a daily basis, were correct. One of the main reasons people are renting is because it suits their lifestyle. The ability to move on quickly, sample differing locations, City or Country, differing types of property, Flats or Houses all add to the trend for renting to become more popular up and down the UK.  I do not quite understand the reference to colours contained in the article, but will comment further on the point about price, because another article, released on the same week, completely disagrees.

The Telegraph does not!

So imagine my surprise, within five minutes finding an article that completely sees the current market in the opposite way in relation to the cost of Renting against the cost of Buying? I accept that the report does refer to first time buyers and specific advantages available to them in the housing market, but I think we have to look at where the information comes from in this case. Unfortunately, we are not given that much detail, but what I can state, is that the average rent of £677 for a two bed flat, is heavily influenced by London rates and is therefore unrepresentative of the rest of the Country. More detail would be useful.

Complicated process.

What does effect the decision to rent rather than buy, is the legal process that everybody has to go through and the risk associated with a sale collapsing, this despite open discussion and comment that the system is in desperate need of reform.  The long winded buying process is unworkable for people who know they will probably have to move at least once if not twice during their formative working years and until such time as a quicker, cheaper workable method of buying and selling property is introduced, this will only further encourage people towards the rental market.

Facts do not lie.

Well in this case with the affordability question, I guess the jury is still out and unless and until we see the figures behind the statements contained in these reports, I for one could not comment further. However, one fact that needs adding to this equation is the evidence we see through our own Agency of a legal system which appears to be getting worse rather than better, causing more deals to collapse. I say this because we see the effect of sales that have gone wrong as owners turn to the rental market to allow them to move on by renting their home out or desperate for rented property to allow their chain not to collapse, in increasing numbers. Add this to the proven fact that more and more people are looking to the rental market for their chosen route to find a home, the problems, cost and delays caused by buying and selling property at present will only swell the ranks further and add to those people turning to the rental market as their solution.

By Steve Roulstone

Here are some of the facts behind the figures that are being quoted organizations who specialize in collating data for the property market. On their own figures do not always mean much, but placed together in this format and a pattern is emerging!

  • Rents rose for the sixth consecutive month in July, increasing by 0.6% to £705 per calender month and marking a new record high. It means that the average rent is now £29 higher per month than in July 2010. Nevertheless, the level of late of unpaid rents fell slightly from 9.3% to 9%, according to the latest Buy-to-Let Index from LSL Property Services.. The average yield also rose reaching 5.2% in July, up from 4.8% a year ago.
  • The greatest rental increase was in London, where rents increased by 7.1%, hitting a new high of £1,009 per month. This was followed by the North East, where rents increased by 5.5%, and the East and West Midlands, where rents rose by 4.8%. Only in Wales have rents remained flat year-on-year. On a monthly basis, rents increased fastest in the South East, up 1.7%, while in Wales and the East Midlands they increased by 1.4% compared to June. David Newnes, estate agency managing director of LSL Property Services, says: “Rents are on an upward trajectory, and it is unlikely that tenants will gain respite any time soon. Demand from thousands of frustrated buyers each month is underpinning buoyant competition for rental homes, enabling landlords to increase prices.
  • “This is the peak summer season, with more renters on the move, the market will continue to heat up. Such strong demand and high rental incomes has forced lenders to take notice, and more are returning to the sector. As a result of the competition in the buy-to-let market, the range of affordable products is expanding – and lending to investors rose by 21% in the last quarter. Nevertheless, even with squeeze on landlord finance abating, the new supply will not be enough to meet demand from tenants.


  • Almost a quarter of landlords are feeling more optimistic about the prospects for their property portfolios, rental income and yields. They are helped by a perception of availability of buy-to-let finance: 22% in the second quarter of this year said that it was reasonably available, compared with 17% in the first quarter. According to Paragon Mortgage’s Q2 Private Rented Sector Trends Report, 23% of landlords feel more optimistic than was the case in Q1, particularly if they are professional landlords, with 30% stating they were more optimistic, compared with 15% of smaller-scale landlords. On average, landlords expect to have 13.1 residential properties in their portfolios in a year’s time, compared with 12.6 properties currently.
  • This is the first time in two years that landlords have predicted an increase in the number of properties in their portfolios. Nearly three out of ten landlords (29%) have increased rents during the second quarter, the majority of whom reported an increase of between 2% and 4%. Landlords are also more optimistic about the net value of their portfolios, with a growing proportion expecting an increase in value (14% in Q2 against 13% in Q1), and fewer are forecasting declining values (12% Q2 vs 19% Q1). The majority of landlords (74%) expect net values to remain the same.
  • Also highlighted in the report is a shift in the types of property that landlords are looking to add to their portfolios during the third quarter. Of those looking to purchase during the quarter, terrace houses are the most popular choice, with more than half of landlords saying they expect to buy this type of property. However, there have also been significant increases in the popularity of semi-detached houses (up from 28% to 41%) and detached (up from 9% to 22%).

All of this confirms what we as Agents have seen and continue to see month on month. The rental market is healthy and from the shop floor it is also noticeable, that we are receiving far more enquiries from would be Landlords. The ‘Buy to Let’ market may not rise to the heights of five years ago again, but the investment Landlord is definitely coming back, the only difference is that the market will give this current trend another ‘name’ soon – let’s wait and see!!

By Steve Roulstone

Well they are at it again, and having listened to the latest report from the BBC on housing in my eyes they have confirmed once again just how they seem to relish putting a negative spin on anything relating to the housing market. Especially as they seem to be the only news agency that have put such a negative spin on the figures behind home ownership! In doing so they have completely ignored two very important  factors, firstly, the right for people to choose how they wish to live and the trends which have been evident for several years and the assumption that the home ownership which has been the UK way for so long is not the natural goal for every family any longer.

The Facts.

Firstly, what I can agree with is the numbers behind the report.  Private Rental Figures have been increasing by three times the normal rate now for at least the last two years and for the first time last year overtook the Public rental sector in the UK The BBC report stated that 64% of housing in the UK is owner occupied. This confirms the trend as currently believed with Public rental at 16.5% – 17% and the Private rental sector at 19% – 19.5%. So the figures are correct, it is the assumption that this is a major cause for concern that is wrong.

Freedom of choice.

For some years now, the average age of a first time buyer has been growing and I do not deny that some of the reason is the inability to be able to afford property at a younger age, but it is also clearly evident that we have a far more mobile work force who are prepared to and expect to move several times as they change jobs or move with jobs as careers develop. This will be confirmed by any Letting agency, as we are the people who see this trend and know for the reasons given by Tenants when initially renting and giving notice to move on again. The BBC chose to ignore this because they will have no knowledge of this trend and do not take time to find out by speaking to our Industry.

Change in pattern.

The other obvious point raised by the two reasons given above, is that firstly, as hard as the fact may be to accept, the housing market in finding its current level as the market dictates is confirming that cost of houses are settling above the affordability of younger couples and is being replaced by the rental market as an affordable choice. Secondly, this choice also suits the fluid lifestyle now being lived and mirrors what is happening across Europe where renting is an accepted way of life and it should not be too much of a mind jump to see that as we develop a cross border larger picture European style of living these changes are moving in line with our European neighbours.

The bigger picture.

But the BBC in reporting this news in the style chosen last night, ignored choice and took as its basis, that home ownership is still what we all strive for. What the BBC need to do, in my opinion is ask itself two very large questions. Why when reporting news from the Housing sector do they always give it a negative spin? and why do they report such news without consideration to the professionals within the market who could confirm what is actually happening in housing in the UK and why, rather than jumping to age old assumptions? My own ‘assumption’ is that what used to be the organisation that gave the world the news, has sunk to a world of sound bites and magazine style articles rather than in depth pure reporting that they used to be known for. That’s a trend that they do know about, but again one that I fear they will also ignore!