Author Archives: Steve Roulstone Marla

24Aug 2012

Happy Birthday to us.

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By Steve Roulstone

It is a short on news week this week and time, as my daily work in the Lettings office has stripped me of the opportunity to research the market for current news or write a more informative post before the week ends, so instead:

Happy Birthday to us!

This week marks our two year anniversary of posting regular weekly comments through our Blog. This is now a total of 230 posts on our ever changing and informative Industry.

It is no real surprise that their is never a shortage of topics to write about, as matters arise in the National press and daily workings of a Letting agency on subject of Law, good practise, professionalism and ever changing Legislation and many many more on a dialy basis.

So another opportunity to say thank-you to those who bother to read our posts and an even bigger thank-you for those who bother to comment. I am always happy to respond and answer further questions through communication, so please, carry on asking.

Well here is to the next 230 and next two years, Thanks again!

 

22Aug 2012

Tenant advice: Social housing lacking major detail.

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By Steve Roulstone

A short topic today, but a situation that has left me somewhat surprised by what I found last week when helping a Family member move in to a new rented home through a social housing organisation.

The Lady checking the Tenant in and I, with a common interest in renting, chatted about the differences between what they do in the social sector and what we do in the private sector and it was noticeable that despite the obvious difference being the nature of the Tenant, and their circumstances, the trappings of how we do our business remains the same, I pad and agreements in hand!

What we did not speak about and what I found the most dramatic difference was the standard of the house concerned and what Tenants are supposed to put up with in the social sector. Actually, it was not so much the house as the fittings or lack of them!

The property itself was fairly modern, being no older than twenty years or so, but downstairs only had laminate in the kitchen and bare concrete floors elsewhere. Upstairs the picture was the same with bare wooden floorboards and throughout, not a curtain at any window.

I can just imagine the reaction of any private Tenant should I carry out a viewing at a house and inform them they would have to carpet throughout and find curtains for every window themselves! I can assure you we would let very few houses!

There was also the question of the state and condition. The Kitchen had three walls painted red and one wall half painted (and not in a its finished type of half) the main bedroom was painted in union flag shades of red blue and white, in blocks some two feet wide, in stripes! The second bedroom in cerise pink on one wall only! Now when we check Tenants out of a property we ensure the decoration is both as it was when the Tenancy started and therefore in good order for the new Tenant and start of Tenancy. It seems clear that when people leave social housing they are not checked, or if they are nothing is done to correct or put right the type of decorating schemes that would strike us in the private sector speechless.

The obvious smack in the mouth opinion that I am left with, is that those who have little choice of where they are able to live because of their financial position ensuring they do not have choice, have to accept whatever house becomes available when it is offered and are therefore also left with the bill of being able to live with the very basics of comforts by having to purchase both carpets and curtains themselves!

This when they are where they are because of financial difficulties is a situation which does not sit well with me. Perhaps I am naive in my outlook, but it is clear the Housing authorities and Social Housing providers are happy to rely upon the charity of the wider family to enable those in dire straits to be provided with such basic comforts as curtains and carpets!

At least if the Government do manage to find a way of attracting the Private sector to social Tenants, another much wider subject of discussion, at least they will enjoy a far better standard of accommodation without the fear of how much such a move could cost them or their relatives!

16Aug 2012

Current Property news: Rents catching up with property prices.

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By Steve Roulstone

A report by the RICS in to rents paid dated July 2012 show an increase of 4.3% for the past year in rent levels across the Country. This confirms that the Industry is still healthy and demand continues to be strong. At the same time, house prices are predicted to start to rise again as the Country comes out of recession. This is probably not too much of a surprise given the drop in prices seen over the last few years, but does point to the current trends being a good time to buy property and develop portfolios as with continuing demand and climbing rents the investment, currently forecast at producing over a 5% return, should continue to rise.

Last Ten Years.

However, before there is too much clamour about greedy Landlords and long suffering Tenants some facts behind the figures should be given, for what happens year on year should, I feel, be balanced over a longer period of time, so that a more realistic figure can be arrived at. If we look at data for the last ten years the picture between Rents and House prices show quite different results.

Playing catch up.

In 2000 at a time when the rental market was less than 10% of UK housing stock, rent for an average 3 bed property in Stafford was £400.00 This is now £575.00 An average house in the UK cost £101500 and at present that price is £161777. Compare the two sets of figures and a quite different picture appears.

Renting still good value.

Because house prices rose so heavily (Ironically largely on the back of a rush for Buy to Let mortgages!) that average rent in 2000 was just under 4% of the house value. Now it is just over 3.5% The gap is still some £60.00 per month less than is currently being achieved and just shows how far behind house prices when considered as a percentage return, rental prices had fallen.

Predictions correct.

What this also confirms is that it is in line with the market levelling out for rents to continue to increase, and they are predicted to do so at 2% higher than house prices will rise. It is also of note that the period before 2000 was very stable and rents were indeed calculated against the value of the property. This obviously reflected the local market rather than national averages, but the comparison still stands up and I am more than aware that the rent locally is far behind that achievable in other Towns and Cities.                                                                                                                             

Statistics and Statistics!                                                                                                                                                        

Once again what appears on the face to be unreasonable increases can be explained when looked at over a wider period of time or against something which gives a broader context. I am also fully aware that others may be able to give a differing picture using their own parameters. So I will just go back to the more reliable method mentioned above, common when I started Castle Estates.

£400 rent against a house valued at £100000 gave £4800 per year, a return of 4.8%

£570 rent now against the same house valued at £159500 gives £6840 per year, a return of 4.2%

Therefore rents still have some way to go to seek parity with prices in 2000.

14Aug 2012

Current Property News: Localism Act changes continue.

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By Steve Roulstone

It would seem that a further little known section (or at least commented upon section) in the Localism Act has come to light covering the requirement of Local Councils to change the manner in which they deal with people who are becoming homeless under a standard notice to quit (Section 21) if they are unable to source alternative accommodation.

Normal circumstances.

This normally applies to Tenants with problems during a Tenancy anyway and would normally mean notice had been served because of rent arrears, hence the difficulty in finding alternative accommodation. But this is the very situation that the Council is supposed to step in and protect those unable to move and the very area where current advice can lead to an eviction order being served by the Courts.

Illegal Act.

The problem is caused by the advice currently given by Social Housing teams to stay put until such time as the eviction notice has been served. As if by doing so the courts are confirming the Notice is correct. At this stage most Council’s will provide accommodation. At first glance the change appears to make the Tenant ‘labelled as homeless’ with 21 days of the section 21 notice still to serve. Removing the need to rely upon the courts at all and ensuring the Tenant does not perform an illegal act by staying after the end of notice date and having to be evicted and all of the stress and discomfort this procedure produces.

Not so!

On taking advice and checking the legislation thoroughly, it now appears this is not the case and that this rule only applied in certain cases, where the Council placed the Tenant in the Private Rented section in the first place. But as someone who has always questioned the need to subject Tenants to such an uncomfortable and stressful course of action I cannot help but ask the question why not?

Simple.

It strikes me that a process whereby the Council can investigate and ratify a Notice three weeks before the end of the notice period, would in the long run save time and money for all concerned. Surely it is better not to place the Tenant in a position where they are in effect breaking the law and offer a solution which is based upon freedom of information and open for all parties to be present in a simple meeting. To me this is a no brainer and having spoken to our local Housing department about this very subject they do wish to involve and engage with Tenants at an earlier date, resulting they hope, in being able to provide accommodation at an earlier date.

Positive steps.

This is an action we will adopt as an agency as I only see better resolution of problems and a cheaper less stressful situation for all concerned. It is good to speak to a Housing department more concerned with solutions than problems. The only area I still felt uncomfortable about is that they still advice Tenants to stay until eviction notice is served, which I believe is tantamount to inviting them to break the law.

Keep talking.

But by ensuring Councils are aware of problem scenarios at an earlier date, hopefully this will happen less and we will do everything we can, with the knowledge that we must always have our Landlords interests first and foremost at the head of what we do. Even so, this stance can only help and hopefully sometime soon, somebody will see exactly what Tenants are being asked to be put through at a time when they are already suffering.

10Aug 2012

Tenant advice: Trust in your Agent.

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By Steve Roulstone

The question of Tenants being able to trust their Agent, or knowing that the Agent they are about to do business through is one that can be trusted has shown itself in differing ways this week. There is a great difference between the two and again, as happens so often in our relationships with Tenants, it is the need for Tenants to understand why decisions are made that matters.

Firstly, from a professional viewpoint, in a Blog that I penned earlier this week, it is clear that as an industry we need to keep banging the drum about the standards that we as professional Agents sign up to. By being a member of a professional body, in our case ARLA we are showing the standards that we operate to and confirming that monies are protected both in the manner in which we run our business and the audit checks we are subject to, in order to retain our membership. SafeAgent, the kite mark adopted and marketed to further give proof of client money protection and standards should go hand in hand.

In short, if an Agent does not belong to either (Other professional bodies such as NALS and of course RICS are of course acceptable) especially SafeAgent, then as a Tenant or Landlord I would ask why not?

Then there is the day to day life of being an Agent where we are subject to the wrath of the Tenants and prospective Tenants if matters do not develop how they wish.  These so often include either being turned down for property because of being in receipt of Housing Benefit payments and the most common one, having a pet. Not forgetting of course, retention of deposits!

The detail behind the reasons when housing Benefit payments are involved are of course individual in every case, but what is always common, is that payments are made in arrears and in 13 four weekly instalments. Set this against normal monthly payments in advance and then add the difficulty created by the Council stopping payments without any consultation with us as Agents and knowing just how long it can take for payments to start again and it is not difficult to see why we do not need to recommend this situation to our Landlords.

Again in short, legally, we have to give best advice to our Landlords at all times!

Pets in houses are another long topic. Again, each situation is different, but the standards set by some pet owners damage the hopes of so many others that we cannot ignore them. Even without bad management, pets can leave an unwanted legacy, we have had too many instances of fleas up to a year after cats have vacated a property not to ignore the possibility! It is difficult to get an x Tenant to pay for carpet cleaning after they have left, so carpet cleaning becomes a must if any pet is involved.

The point I wish to make is what I have written is not unusual, and any potential Tenant affected by either scenario will have heard this and more. But those with qualifications and affiliations with professional bodies probably, by nature of how they prepare their staff, will have a better understanding of how to manage the situation and can therefore be better relied upon to look after Tenants interests and give them the ‘Duty of Care’ they deserve!

Deposits are an altogether more complicated process now, but in dealing with issues left by Tenants and confirming the payments required to correct those issues, the excuses given at times scream that the Tenants involved have no faith whatsoever in how we go about our business when, if affiliated, as discussed above, we have been trained, have years of experience and know exactly what we can and cannot claim for.

In all cases, if we are wrong, the decision is made through arbitration. We prove our case and judgement is made. If an Agent loses a case through arbitration (and here I can only speak for the Castle Estates offices) it is usually because the case was badly prepared and paperwork let them down, rather than because they were making a false claim. Membership of organisations such as ARLA and schemes such as SafeAgent should enforce this view with Tenants.

The fact they do not means more needs to be done to gain trust as an industry, more needs to be done to further the name of professional bodies (Here comes the drum) and the Government needs to get involved and introduce the legislation confirming the fact and introducing the correct level of penalty for those who operate outside of legislation. In the meantime, look for the symbols of professional membership they all have back up, but more importantly, what they stand for is professional intent!

08Aug 2012

Property Landlord advice: Treating harassment seriously.

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By Steve Roulstone

One of the most difficult jobs that we have to do as Letting Agents is to convince a Landlord that no matter how badly treated he may feel by the Tenant neither we nor he can just turn up at the property and demand recompense!  Harassment and all the actions that surround it are a serious matter and a case has recently come to my attention which highlights exactly why we give the warnings that we do.

Extreme case.

The case I am talking about surrounds a Landlords efforts to remove a Tenant because they wanted to sell the property concerned and went about it in a way that was far from normal by any standards which does mean that the efforts the Landlord went to are extreme, but the penalties  are also high and what should be considered is that the Landlord was wrong in every way, before we even get to the legal steps to avoid action, but that does not change that he was found guilty in virtually every step he took.

Notice served.

Even though the notice was served and indeed not questioned by the courts, the very fact that the Landlord applied pressure on the day the notice came to its due date is significant. The courts only have one view and that is that the law must be seen to take its view. Even if the Tenant does not leave on the due date, the courts are the only vehicle through which a Tenant can be evicted.

Landlords rights.

The law sees itself protecting both the rights of the Landlord and the Tenant, but just because a Tenant does not leave does not mean that anybody can take matters in too their own hands. This is why even calling without notice can be considered as harassment! There is one simple rule here, do nothing without notice, even a visit to discuss matters should be done by appointment.  Let the courts do their work, under no circumstances should a Landlord take any form of direct action themselves.

Extreme scenario.

Yes the detail of this case is extreme, but the consequences do show just how this can get out of hand. The damages which could amount to £30000 (along with not unsubstantial costs) are the proof of just how costly getting this wrong could be.

Private Landlord.

It is also worthy of note that the Agent concerned, having served notice, was contacted by the Tenants solicitors, but from that moment on, the action was all against the Landlord and the Agent, obviously unable to fulfil its role, arrears (correctly) to have disassociated themselves. They have no choice when matters are taken out of their hands. But if it was an Agent that was being blamed for this action no doubt ‘rogue agents’ would have appeared in the report! But as it was a Landlord taking his own actions, it would be nice to know that he was banned from being a Landlord again!

Registration.

If all Landlords were registered as was recommended in the Rugg review of 2008 then there would be no doubt and action would have been taken. But that is not the case and as far as I am aware, without a specific case resulting in a Court ban, Landlords cannot be stopped renting property again! Who knows, that may still happen, but what is sure is that there is no legislation in place at present to rely upon.

06Aug 2012

Current Property News: Ban and fine for bad Agent not enough.

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By Steve Roulstone

An Agent who went bankrupt with liabilities of over £400,000 has been found guilty by an NAEA hearing and fined £2500.00. At the same time it has been confirmed following an investigation by The Insolvency Services that he has been banned from being a Company Director for fight years.

Figures confirmed.

The report confirms a figure close to £40000 as being the amount they say Landlords and Tenants lost as a result of his failure to comply with the 2004 legislation regarding Tenants deposits in the correct manner. What appears to be missing from the research I have carried out is any conviction, as it was the Landlords who were then made liable for the subsequent fines of up to three times the deposit that followed from the failure of GDH to register them correctly.

Total?

It is obvious therefore that the total cost to Landlords and Tenants will never be known, but a conservative estimate of around £75000 would seem to be reasonable; depending upon how many Landlords were levied with the appropriate fine (Three times the original deposit)

Fair?

Now is it me? As an Agent who has constantly banged the drum for registration of Letting Agents for the last ten years, being banned from being a Director and slapped with a £2500 fine, does not seem to be fair when all of the individual cases (and there will be many to make up this kind of figure) are taken in to account? In my opinion, what would seem fairer as far as the Industry is concerned would be that he was never allowed to work as a Letting Agent ever again. This kind of punishment can only come as the result of an Industry protected under legislation and proves to me once again that the Government should be able to see that intervention is needed.

Total ban.

I say total bane, because we all know how simple it is to start again with a relative as a Director and it is only a total ban (as in lost the right to be associated) that would be fair in my opinion to all those who lost money.  It is only through Government legislation that such a rule could be enforced. Only then, would Landlords and Tenants know that they and their money was protected.

Systems exist.

And let’s not forget, that such systems to protect our customers already exist! To register with most professional bodies means monies need to be accounted for within the auditing requirements of remaining a member.  It would also be a simple step to have all deposits registered with people other than Agents own Clients account, such as DPS even though this is something I have spoken out against in the past (How would a Solicitor react to being told he could not keep clients funds?) it would be a small sacrifice as opposed to having workable legislation! And then Safe Agent, the latest initiative from professional bodies within the Industry, which already provides all the protection needed for any Landlord or Tenant!

Not far now.

I believe that it is inevitable that the Government will legislate and cases such as this show the need, all we now require is for the systems professional Agents have put in place and promoted, to be endorsed by a Government and hopefully a more suitable and long standing deterrent will be available!

01Aug 2012

Property News: Full Council Tax Charges May Apply to Vacant Properties

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By Craig Smith

If you have had a property empty for whatever reason, you may know that a property can be exempt from council tax charges for up to 6 months, provided that it is unoccupied and unfurnished. This is known as a Class C exemption.

Under the Localism Act (which has also changed the way in which tenancy deposits are dealt with recently) the Government is planning to allow local authorities to charge almost whatever they like whilst the property is empty. In theory, the council could still allow an empty property to be exempt from the charges but, on the other hand, they could charge the full amount of council during that period.

Bad News for Landlords

Lets just put one thing into perspective here. Yes, sure, the local authorities could earn a little extra cash with the budgets being tighter than ever, but have they thought how this would actually affect homeowners?

It is not always possible for tenants to move out and in on the same day and it is not usually advisable especially if any work was needed between tenancies. A Landlord could find themselves not only out of pocket but in a financial mess if their property was empty for a month or two. Not only would they have no rent coming in to cover the mortgage, insurance etc but they would also have the expense of paying the council tax for a property they don’t even use!

The Knock-On Effect

If your not a Landlord yourself then you might think I’m being biased here but what about the knock-on effect on regular homeowners? For example, an elderly person moving into a care home might leave their home empty whilst they sell it, another expense to prevent them moving forward with their lives. Or how about someone relocating for work and needs to move away quickly?

And this is a Government that is trying to get the housing market back on an even keel?

Looking at this from the other side, most rental properties would hope to be empty for only a few days between tenancies which would mean that only a small amount of council tax would be due. Now, it is isn’t always easy to contact Landlords, particularly if the Council haven’t got the Landlords home address to address any billing. This would create a whole load of extra work for the Councils to chase outstanding amounts so all that money that could earn from empty properties could all be lost in chasing the debt!

Is This Really a Possibility or Just Scaremongering?

A consultation has already been held and 169 councils voted in favour of the extra charges and only 25 against so it is clearly obvious what the majority want. Unsurprisingly, the majority of Landlords are against the idea and quite rightly too!

I’m sure that this is by no means the last we will hear of this as we trundle towards the inevitability of the ever increasing costs of being a Landlord!

26Jul 2012

Lettings show Sales how to show a home!

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By Steve Roulstone

My second Blog this week is not my usual subject, but I just cannot miss commenting on two properties that I have visited on the last three weeks, both on behalf of differing Landlords and for differing reasons, but it is the difference between them and the manner in which the Lettings Industry views property as opposed to the Sales Industry as to what is acceptable and what is not that I wish to comment about.

Lettings Viewing.

The first property I have mentioned before in this Blog, it is a house that we have let before, but not before we had gone into long conversations with the Landlord about the standard of the house and what work needed to be done. On being asked to re-visit, I found that the property was worse again, as the outgoing Tenant had removed the stair carpet and left protruding nails and an exposed carpet edge right at the top of the stairs, which was a clear trip hazard for anybody visiting the house, never mind potential Tenants. The outgoing Tenant had also left furniture in rooms, some in a state of disrepair and some just left, but it was not the Landlords property and would not form part of any let and needed to be moved. Finally, the garden which was packed with plants and bushes anyway, seemed to have been untouched throughout the summer months, meaning it now took on the appearance of a jungle, in fact I could only get pictures when taken from an upstairs bedroom window that gave any impression of its appearance.

Not suitable.

The only decision I could come to was to advise the Landlord that the property needed attention before it could be considered suitable for viewings. This was not a Managed property, so we were unable to do anymore until the Landlord had dealt with the stairs carpet, organised the removal of furniture with the outgoing Tenant and done something about the Garden, presumably also with the last Tenant. No matter what was promised, because we were not managing, we would not accept responsibility without knowledge that the work had been completed. We would also not accept a position where the outgoing Tenant could accuse us of damaging furniture they had left. In short, there has to be some semblance of order between the end of one Tenancy and what is done to start the second.

Sales Viewing.

I cannot begin to think of words to describe the second property and what we found. The Landlord wanted our opinion of the property as an investment, a service we will carry out when appointed, to give our experience on what to look for and more likely, look out for. The property was for sale as on behalf of a clearance organisation, following a failed mortgage. Nothing what so ever, had been done to change the house from how it was left by the previous owners, other than to place paper tape on toilets, which did little to hide the worst kind of mess one can imagine in toilets (there were two in the same condition) which was smeared over floors, doors and walls. The furniture in some rooms were caked in I have no idea what, and carpets in two rooms had not been cleaned despite the dried remains of what had clearly been somebody being ill. Despite this, somebody had gone to the trouble of bagging the empty drink cans in plastic bags. I did not count them but there must have been two dozen bags – full!

Not suitable.

I washed my hands when I got back to my office and wished I could wash my shoes and change my clothes. The smell was impossible to describe, but the house was possibly the worst I have ever been asked to view. Despite this, the Sales Agent showed no surprise in our comments of disgust and offered no apology or explanation as to why it had been left in this condition, or worse being offered for sale? Now I know that the buyer will not be expected to live in the house as it is currently being shown, but never the less, it is a health hazard and offers more danger to people looking, in my opinion, than any house I have looked at being offered to the rental market. I was just amazed and have had to comment about the difference. I know the Sales Agents are struggling for business still, but I would have thought that as a general statement, they would at least take some pride in what they are selling. I mean, a Car can be refurbished, but you would never expect a garage to sell one in the state of the house I was shown this week!

23Jul 2012

Current Property News: English Housing Survey points of interest.

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By Steve Roulstone

The figures relating to the latest English Housing Survey have been released for 2010 / 2011. There are several results which are worthy for note and for what they are worth I include my thoughts on these highlight points for the Rental Industry. Each of these are included within the report and you can see for yourself they have been reported on in great depth, but what is not mentioned is the fact that these figures when isolated for our Industry, prove that the rental sector shows no sign what so ever in abating, indeed the pattern is shown as one of upwards growth.

Ten Year high.

And growing! I have stated before that I believe the industry represents a figure approaching 20% of the UK housing stock and these figures confirm the growth shown from the last report as being constant. This 17% figure represents an annual growth of 1.7% which with the same pattern for the last eighteen months would produce a current percentage of 19.55% across England. This does confirm more privately rented properties than the social rented sector as that figure continues to fall. But the most significant figure is the actual number of properties this now represents, as 20% would equal 2.89 million houses, up by 1.45 million in ten years. With 5% growth in the last three years, over 20,000 properties per month have been added to our sector during this same period.

Only lively sector.

That the rental sector is the only area where activity is significant is confirmed by the number of people moving during the period this survey was taken. Out of the whole, private rental sector was responsible for 63% (1.26 million) Confirming just how people are relying upon the Private Rented sector at present, as the means to finding accommodation throughout England.

Unusable stock.

One figure that shouts out at present is the number of houses that remained empty at the time of the survey, 940,000 (nearly 1 million!).  83%, some 780,200 properties were in the private sector.  On the basis of these last two figures, the best way of utilising these properties and using them again for habitation, knowing that a percentage would not be fit for habitation, would be to introduce them to the rental market and an Industry that was better regulated through professional legislation would no doubt attract more interest!

Rented property better than estimated.

The Standard Assessment Procedure (SAP) has been updated during 2009 and the new rating shows Private Rented sector property to be far better than we have been led to believe. There have been several comments in the last twelve months by the Government supporting initiatives to improve the Energy Efficiency of the Private Rental sector, including one that stated Private Rental property was the worst performing sector in the UK.  If this is the case, then these figures show there has been one hell of an increase in quality, as by now it will outperforming Privately owned property!

Shift of emphasis.

Perhaps now the Government will stop introducing so many onerous performance requirements solely for rental properties within the 2018 Green Deal energy performance plans and include moves to encourage ALL privately owned properties, whether they be rented OR owned! There now seems no excuse to target just one sector, and if changes are made, I just wonder if they will be watered down, with the knowledge that the privately owned sector is much harder to corner. I have always felt that the rental sector was targeted because it could be rather than because of any urgent need, as an excellent way of achieving Energy performance figures for to meet Government promised figures!

Healthy statistics.

Yes I know there are statistics more statistics and damn right lies! But these figures do show a continued shift towards renting as a lifestyle choice, as well as the affordable alternative to buying. Otherwise those moving would not be so high in the rental sector, but as an industry, these figures I hope will be used as further ammunition to prove to the current Government, that professional legislation is what is required as the best way forward to breed confidence and higher standards. I equally hope that our professional bodies are ensuring that they are not only requesting legislation, but confirming just how this can be achieved through self Policing within the Industry. I for one live in hope!