Tag Archives: Property News

19Jun 2013

Property News: The Green Deal Yet to Make an Impact

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By Craig Smith

Green Deal

Earlier this year a new initiative was introduced by the Government called the Green Deal which is designed to help households make energy saving improvements to their home and pay the cost in monthly instalments.

In case you haven’t heard much about this before, don’t panic. The basic idea is that a survey is carried out on the property, you can agree to have works done (such as having insulation installed or a new energy saving boiler) and the cost is included in your monthly electricity bills. If someone else should move in before the amount is paid off, the new occupier takes up the repayments. As a letting agent managing more than 300 properties, and around 150 where we act in finding tenants only, we can honestly say that not a single tenant or Landlord has asked us about it!

When the offer of free insulation was still around, there were households queuing up to try and get some, which is understandable. Late last year we were trying to work with a company who could offer free cavity wall & loft insulation on some properties but funding for this has now been ceased. There are only some people who are now eligible for this depending on what type of benefits they may receive and their overall household income.

The Green Deal is the new scheme now but not many people seem to have taken notice. I’m starting to wonder just how many people have actually looked into it nationwide or if it is just something that nobody is interested in. It doesn’t appear to have been advertised very much in the national press, more so around the property professionals who might be affected by it.

From 1st October 2008, most rental properties will require an Energy Performance Certificate before being able to be let by law. (There are certain exemptions such as room shares.) This was really the start of the energy saving regulations coming into the rental sector and, looking to the future, it will certainly have further implications in the industry. For example, it is almost certain that as of 2018 a property with an energy rating of E or lower will not be able to be let at all.

Whether or not you agree with the energy saving measures is another talking point, but the time to start thinking of potential improvements and planning for the future is now, before it is too late!

14Jun 2013

Letting News: Rent Regulations Could be The Future

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By Craig Smith

5 Higher Rents 140613

Members of the London Assembly are calling on Boris Johnson to introduce tougher regulations for Landlords in the private rented sector in London.

We’ve already said ourselves that further regulation of Landlords and agents would be a good thing. If every Landlord or agent had to be registered under a specific scheme it would mean that they would have to agree to certain rules. If these were to be breached they could end up out of pocket or struck off from the register, depending on exactly how the scheme would work. This might sound like harsh punishments but it would help to reduce the amount of improperly trained agents making a mess of things!

There is currently no statutory regulation of lettings agents, only voluntary schemes. This means that anyone could set up their own letting agency but might not have the proper training & know-how to run it properly. I believe that the scheme would need to be fair & properly thought through if introduced by the government. We’ve seen so many times the government has back-tracked on certain things but this needs to be fair, clear & concise in order for it to work effectively.

The assembly also calls for tougher rules on rentals to stop rent amounts from reaching unaffordable amounts. Their figures show that the average rent amount in Londonincreased by around 9% last year which is a large amount given the already higher costs in the capital. Of course, London is generally more expensive as it attracts higher earners and is a much busier environment than smaller towns and villages but if the reforms do come in it could have a knock-on effect for the rest of the country.

Schemes such as this are often trialled in certain areas, a bit like the congestion charges, then spread to other areas later on. It would be interesting to see how this would work and the effect it would have on Landlords.

The publication also states that more should be done to help homeless households. Many Landlords offer a 6 or 12 month tenancy to begin with so that if any issues should arise then neither party is tied in for a longer period of time. It suggests that homeless households should be given 24 month tenancies if they are placed in a privately rented home. This might sound like helping the needy but lets not forget that the Landlord could end up suffering here too! There is always a reason for a family being left homeless, it could be due to the loss of their current rental property or having their home repossessed but if they don’t look after their new property in the correct manner, the Landlord could be stuck with a bad tenant for 2 years.

There are still many items up for discussion surrounding all of this but it will be interesting to see how all of this unfolds. Could this prove to be just the thing that the industry needs or will it be endless red tape for all involved?

14Mar 2013

Regulation of Letting Agents Discussed in House of Lords

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By Craig Smith

The lettings industry has continued to grow particularly over the last 5 or 6 years where so many people have struggled to sell. Certainly in our office we have noticed the increase in the amount of properties coming in to the rental sector and likewise, the demand from tenants who need somewhere to live! This just goes to show the importance of the need to protect anyone in lettings as there is a lot of money involved around the industry. (Rent payment and deposits perhaps the most commonly known.)

In the House of Lords earlier this month the majority voted to regulate the industry as a whole which could mean all agents and Landlords have to sign up to one scheme. They could also be included in the rules of the OFT (Office of Fair Trading) which could ban rogue agents from trading.

Joining Regulatory Bodies

As we have said before, signing up to a scheme is more than just about being able to display a logo in the window, it means so much more than that. A lot of Landlords do feel safer in the knowledge that their agent is already regulated and that what they are doing is right. Not only is our office registered as a member of ARLA, the majority of staff in our lettings office are also ARLA trained. There are various levels of qualifications available with our individual members having to pass a number of examinations before being able to gain membership. I have been there and done that, so can tell you it takes a lot of hard work to pass the exams and to prove that you have what it takes!

Castle Estates have been trading here at our offices in Stafford for 13 years and have been a member of ARLA (Association of Residential Letting Agents) since almost day one. Being a member of a regulatory body has never been compulsory for letting agents in this country and our decision to join was through choice and not necessity.

Of course, there are other bodies that can be joined which cover different aspects of the business. For example, the SafeAgent scheme is only for agents or Landlords who protect their clients through money protection schemes. Again, we are proud to say that we are part of this scheme so that if ever anything should happen to us, our clients’ money is protected.

The other main body that we are a part of is The Property Ombudsman which means that we have to adhere to their codes of practice. Yet another logo in the window that means our clients are reassured that their money is safe.

Deposit Systems Already Changed

Since 6th April 2007, any deposit taken for an Assured Shorthold Tenancy needs to be registered with one of the three approved schemes. We’ve talked about these until we’re blue in the face in the past so won’t bore you with all the details again now! But this is just another area of the industry that has been tightened up over the last few years with penalties to those who don’t comply.

The idea of the ensuring the deposit is protected is to stop rogue Landlords keeping a tenants’ deposit without a valid reason. Before deposits were registered, it could be costly for a tenant to go through the courts to try and get their money back but each of the schemes operates an easier and fair method of mediating between the parties.

One Scheme For All?

Nobody yet knows for certain how the government backed scheme would work to cover all Landlords or when it would come in to force. We believe this could work well and rogue Landlords could soon be a thing of the past, so we welcome this news with open arms!

17Aug 2012

Property News: House Prices Increasing for Both Purchasing & Rental

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By Craig Smith

The BBC has produced an article today showing that house prices continue to rise and that families are being forced out of their homes due to ever increasing costs.

Facts & Figures

Before we all start getting scared and wondering just where will we all live in the next few years, lets look at some of the facts.

Yes, rent amounts have increased in the last few years in particular. But if we look at the amount they have risen in comparison with house prices, which have risen by around 59% in the last 10 years or so, the average rent amount has increased by around 44%. This means that Landlords are getting less return for their property than they would have done 10 years ago.

Current Rents Increasing

With this is mind and the huge amount of rental property that is now available, Landlords are finding it more difficult to increase the rent on a current tenancy. It is better to keep a good tenant in place rather than risk pushing them out with higher rents and having an empty period at the property. Most tenants who find their rent going up will notice that it might only increase by a small amount.

People Still on the Move

In the BBC report is suggests that it is now harder than ever to purchase a property. With lenders being very careful about the amount borrowed, buyers are finding themselves shaving to find bigger and bigger deposits. Although, all things considered, over the last 12 months we have generally seen a rise in the number of our tenants who are leaving their rental accommodation and who have purchased their own home. So the property market is still active, albeit slower than we might be used to.

More Homes Still Required

Many people comment on how many new homes might be appearing in their local area but the facts show that the amount of new homes being built has decreased. The Office of National Statistics shows us that the population ofBritain is ever increasing. Couple this with relationship break ups and more & more people wanting their own home, demand is ever increasing. 

The End Result? 

As buyers struggle to find deposits, the demand for rental property increases. In order to get the property market bump started again, lenders need to lower the deposit rates for mortgages!

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!