Tag Archives: Lettings Update

17May 2012

May Update: Current Lettings News

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By Craig Smith

At last, a chance to update you all on the latest goings on in the letting world! This month seems to be going so quickly there is a lot to write about, so lets get on with it!

Increasing Number of Viewers Making Offers

With the slow down in the property market over the last few years a number of people are still struggling to sell their homes. This leads some to consider letting their property instead in order for them to move on with their lives but take care of the ‘unable to sell’ situation at the same time. Whether this is the case or whether an investment Landlord has a property coming empty, everyone is keen to get their property let sooner rather than later!

If you are in the market to purchase a property it is common practice to make an offer on the asking price to get a better deal. Today the situation is much the same in the rental market with many prospective tenants making offers on the asking price. Couple this with the huge supply of rental stock that is available at the moment and many Landlords find themselves without any rent increases.

Too Much Choice for Prospective Tenants!

The huge amount of choice that a prospective tenant has when looking for a property has increased the amount of viewings booked for a property. Instead of being able to find only 2 or 3 potential new homes and making a decision in a few days, tenants now have the possibility of a dozen that may be suitable. This, in turn, does lead to more people offering lower rents and trying to get more for their money (it makes sense!) but also increases the number of viewings that might be needed on a property before it is finally let!

In what seems like a distant memory of times gone by, a Landlord could expect perhaps 4 or 5 viewings on a property before it goes under offer. One property that we have been marketing has had over 20 viewings and has now been taken.

Rent Review Time

Increasing the rent is a tough decision at the moment and should be well thought about by any Landlord. We are currently advising our Landlords of properties that have been let for around 12-18 months if we consider a rent increase to be feasible. Given the choice, I’m sure 99% of Landlords would like an increase but putting the rent up too much could force the existing tenant to look around and see what else is available.

Look back at the first section of this post and if a tenant can make an offer on a property that is in the same price range they could just be tempted to move! By keeping the rent at the same rate a Landlord might lose perhaps £10 a month but this is still a lot better off than having a property sat empty for a month between tenancies!

Change of Deposit Legislation

Regular readers will remember my post from back in March regarding the change in Deposit Protection Rules. We’ve been busy organising the new Prescribed Information forms and have issued them to all of our tenants who need them. (By the way, if you are a tenant of ours who hasn’t got them back to us yet please don’t forget!)

If a Landlord hasn’t ensured that they have their paperwork up to date it could come back to bite them in the future. Any deposit taken for an Assured Shorthold Tenancy Agreement must now be registered with one of the approved deposit schemes. If the deposit has not been protected then the Landlord is unable to serve a Section 21 notice on the tenants to leave the property (and wouldn’t be able to do so until the deposit is registered) and could find themselves ordered by a court to repay up to 3 times the deposit amount to the tenant. This is regardless of any rent arrears or damages that a tenant may already have accrued!

What Next?

There are further changes on the horizon including the way in which Energy Performance Certificates need to be presented on property details. If anyone tells you that employing a managing agent for your property is a waste of money then just tell them to see how busy we are in looking after our Landlords!

10Dec 2011

Tenancy Advice: Prescribed Information & Tenancy Deposit Ruling

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By Craig Smith

If you’ve looked back through some of our recent posts, you might think that all we do is bang on about is deposits, deposits and deposits. Well, maybe not but here’s some more important information that you might find useful.

A recent court ruling has changed the way in which information should be provided to tenants paying a deposit that would be protected under the Housing Act 2004. Since 6th April 2007 any deposit taken for an Assured Shorthold Tenancy must be protected by one of the 3 deposit schemes (see my earlier post on deposit protection) but now additional information needs to be provided to tenants.

Prescribed Information

It is already stated in the legislation that tenants must be provided with certain Prescribed Information for the deposit. This information includes where the deposit will be held and the Landlords & Tenants rights to the deposit at the end of the tenancy. If this information has not been given correctly, or not provided at all, Landlords could be forced to pay 3x the deposit amount, plus the deposit back to the tenants.

This is the same for deposits that have not been registered in the timeline set out by the scheme rules, currently 14 days. Landlords cannot ‘get around’ the legislation by suddenly registering a deposit later in the tenancy if the tenancy turns sour. However, new rules are looking set to be published some time in 2012 which will extend the time to register a deposit to 30 days but we’ll wait and see when this happens!

Recent Court Case

The recent case which looks set to have changed the way in which information is given to tenants is the case of Suurpere V Nice. The full details of the case can be found using that link but the very basics of the case are: a deposit that was taken in January 2009 was not registered until July 2009. So, quite clearly not within the 14 day rule! Despite the fact that the tenant had left the property in rent arrears and goods still at the property that would need to be removed at the Landlrod expense, the Landlord was ordered to pay the deposit back to the tenant in full plus 3x the deposit amount.

Now reading this right now, this might seem unfair on the Landlord and to a certain point, I have to agree. But, the rules of deposit protection are very clear and Landlords cannot use the excuse of having a bad tenant to get out of any fines imposed by a court.

Rogue Landlords

A little bit of advice now to tenants. When you are looking to rent a property how much attention do you pay to the Landlord or Agent? Sometimes stickers on an office window might just get in the way of the property your trying to look at through the glass but do you know what they mean? It’s a tough world out there at the moment so make sure that the deposit you have paid is looked after! 

25Oct 2011

Property Letting Update: Tenants Numbers Fluctuating

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By Craig Smith

We were having a conversation in the office just last week about how the number of tenant enquiries seems to have dropped rapidly. The number of telephone calls receiving asking about properties had fallen but Landlords are still as keen as ever to get their properties let, if there is no tenant there is no rent coming in to cover mortgages, insurance etc.

More Tenants on the Move

But wait, its not as bad as it sounds! By looking at the number of enquiries compared with the last 2 years there is still an increase in the number of tenants on the move. For example, on our website alone, the number of views from August 2009 to August 2011 had risen by more than 12,000. It is the same story comparing the number of views from March 2009 to this year with an increase of more than 13,000!

This doesn’t necessarily mean that there are 13,000+ more tenants moving. More and more people are now using the internet for everything from ordering their weekly shop, to social media, to finding a roof to go over their heads! Perhaps the increase could be blamed on a mix of properties being more easily accessible online and an increase in the number of properties in the rental market.

Higher Demand, Higher Rents?

There have been a number of news reports recently stating how poor the housing market is and that many people cant afford to get themselves onto the property ladder, so perhaps this is why more people are looking to rent instead? It has been reported on the ARLA website over the last couple of weeks that demand seems to be outstripping the supply of rental properties.

Well, we always have properties available and I very much doubt that we’ll ever see a day where we have absolutely nothing left to market but this isn’t quite what is meant by this term. Sometimes we see a high demand for family homes, such as 2 or 3 bed houses and as they get snapped up, the number still available will decrease. This is when tenants may be willing to stretch to pay a little more rent to make sure they get the house they want. At this time of year, there is always lower demand for rental properties and we can prove this by looking at the number of enquiries in October year on year.

Should We Be Worried?

It seems that the only news we see about property in this country is how about how poorly the market is doing and how the country is on its knees. Yes, it is true that a lot more people are trying to spend less wherever possible, not just in the property market but life in general. I don’t think we need to be worried but perhaps just a little more cautious. 

10Oct 2011

The Benefits of Regulated Letting Agents to Landlords and Tenants

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By Craig Smith

Wow, it seems like only  minutes ago that our blog was last updated but it is nearly 2 months already! Anyway, not too long ago I published a post raising some concerns that some people have with unregulated letting agents not being properly trained. Well, I can confirm that I have now passed all four of the ARLA Technical Award examinations which means that I will soon be able to become a member of ARLA!

Because of this, myself and one of our directors attended a regional ARLA meeting just last week. This is where members from the surrounding regions (in our case, Staffordshire and Shropshire) get together and discuss the latest legislation changes and ideas to promote our businesses and ensure that we always give the best and up to date advice.

Unregulated Agents Under-Cutting

One topic that was discussed was an unregulated agent who was seeing properties with a to let board and contacting the owner with false promises of having a tenant who is very interested. Of course, once a Landlord has moved to the agent the tenant has magically already found somewhere else but the agent has then gained (or in some peoples opinions stolen) the business from a professional organisation.

Sometimes a logo doesn’t mean much but a little homework can go a long way. For example, as you are reading this now, do you really know what ARLA means and how they look after both Tenants and Landlords? By being a member, an agent has to follow the codes of practice as set out by them which gives a more professional letting service and better management of a rental property.

Proper Training for Professionals

Another good service provided by ARLA is the training that they can provide. Not only the exams as we spoke about earlier, but training sessions throughout the country for different areas of property management. You might think that an agent should already know everything about everything but there is always something new on the horizon! Updates in law can determine whether a process needs to be changed or different advice needs to be given to a Landlord.

Of course, not every unregulated agent should be treated as cowboys, it always takes time to become established and better known in an area and also time to gain the experience needed. Unfortunately, like with most walks of life, it only takes a handful of the bad guys to give others a bad name.

Important Updates for Landlords

As mentioned earlier, it is important for Landlords and Agents alike to stay in the know of changes to legislation that may affect their rental properties. This is another benefit of being a member of a professional body as we found out last week with the changes to the payment of water rates for a rental property, more about this to come soon! 

23May 2011

Property Letting Advice: The Importance of Good Communication

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By Craig Smith

In a recent ARLA publication, the property ombudsman (Christopher Hamer) has written an article relating to a tenant decorating a property. The story goes that, following the tenants request prior to signing the tenancy agreement, the Landlord would not decorate the property. The agent had then given permission for the tenant to carry out the works themselves. However, the Landlord had no knowledge of this and as such tried to claim for the costs of returning the property to its original condition from the deposit.

Tenants Decorating Permission

In this case, it appears that the Landlords agent had given permission for the tenant to redecorate, which could have cost the tenant a substantial amount of money, without first gaining the permission of the Landlord.  There really can be no excuse for this, even if the Landlord was away or unable to be contacted the agents should not have given the permission to the tenants.

Payback Time

As the Landlord had claimed for recompense from the deposit, the tenant then complained to the property ombudsman due to the distress caused by the lapse in communication. If an agent is a member of the ombudsman, it will deal with any complaints made in the most suitable manner.

The article states that the ombudsman awarded £200 in compensation to the tenant for the stress.

Lessons to be Learned

Although the tenant had quite rightly sought permission from the agent to carry out the decorating, the agent had not contacted the Landlord for their advice. Ultimately, it should have been the Landlords decision whether or not to allow the decorating to be carried out.

Best practice dictates that permissions should be in writing and a record kept of and do’s and don’t given to the tenant by the Landlord. The agent in question was at fault for not fulfilling their obligations to their Landlord, which goes to show the importance of having trust in your agent. 

17May 2011

Local Housing Allowance Changes to Affect Landlords & Tenants

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By Craig Smith

Since the coalition government came in to power in May 2010, a number of cuts have been announced as part of their plan to reduce the deficit. One of these cuts is to the LHA (Local Housing Allowance) which is paid to the unemployed or those with lower incomes who are living in rented accommodation.

The Affect to Tenants

The amount of LHA paid to tenants will be reduced, typically around £30 per month on a 3 bedroom house (see the handy table which has been produced on the DirectGov website). This might not sound like a lot to lose, but this could be an extra £360 a year to find, and when your already struggling to make ends meet this can be a lot of money. Put this together with the ever increasing cost of living and things only seem to look worse!

The cuts come into place either on the renewal of a claim (12 monthly anniversary) or when there is a significant change to the claim, such as a new baby or moving from one property to another.

Landlords Reactions

A member of staff from Castle Estates recently attended a local Council Private Sector Landlord Forum which was to discuss the changes and keep Landlords informed of what is going to happen. The meeting itself was perhaps aimed more at private Landlords (as the title suggests!) although a lot of useful information was provided to everyone who attended regarding the cuts.

As the amount paid to Tenants is to be reduced, the extra money needs to come from somewhere. And if the money can’t be found then the council’s answer was simple… reduce the rent. At this moment the room fell silent for a second or two, until a few Landlords began to chuckle. They seemed to have forgotten that Landlords still have mortgages to pay, insurance to cover and repairs to be made.

The Route Forward?

Perhaps the first thing to come into a Landlords mind is to steer clear of any Tenants who may be in receipt of LHA payments. However, in the long run this would mean less and less housing available to those Tenants. This doesn’t necessarily mean that some Tenants may not be claiming in the future, for example, someone who has recently been made redundant and is unable to find new employment?

The other way of looking at the situation is that although the payments would be a lesser amount than would have been expected before, the payments would be made regularly to the Tenant. This doesn’t always guarantee that the Tenant will pay the money to the Landlord, but some good tenant referencing would also help in the selection of a suitable tenant. 

13Apr 2011

Lettings Update: Change in EPC Rules to be Implemented

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By Craig Smith

From 1st October 2008, most residential properties need to have an EPC (Energy Performance Certificate) in place before they are able to be marketed. However, this looks set to change from 1st July 2011 due to new government rulings which have been announced to the energy assessors.

Current Regulations

At the moment, an EPC graph should be provided to prospective Tenants at a viewing and most certainly before they take tenure of a property. An EPC will last for 10 years for a rental property unless there are significant changes made to a property, such as the fitting of a new heating system, insulation being put in or new double glazed windows fitted.

Are EPC’s Useful?

If you asked us how many times a prospective Tenant has asked to view an EPC at a viewing since October 2008, you could probably count them on just one hand! This seems to be the general feedback from many Landlords and Agents. So that must mean that not many people even bother to look at them!

The certificates do good information on how to reduce the amount of energy used and improve efficiency. But again, if no-one looks at them what use are they?

The New Rulings

A government memo has been seen by one of the industry’s biggest publications which suggests that from July 2011, a full EPC report should be provided with ANY written details for a property. At the moment, the first page of the report is sufficient as this shows the performance graphs. So lets just get this straight, we should have to provide a complete document, usually around 7 pages, for most people to throw away. Why?!

Full EPC’s are available on request anyway (not that we ever seem to have requests for them) and if anybody does happen to be interested in the energy usage, it is usually only a quick glance at the graphs. Being perfectly honest, we cant remember having a single viewer say no to a property because of the results of the EPC!

Your Opinion?

We would like to hear your opinions on the subject, whether you are a Landlord or a Tenant. Maybe you have found an EPC to be useful when refurbishing a property or when choosing a property to move in to, please feel free to add a comment using the button below!