Category Archives: Lettings

22Jun 2011

Rental Issues: Renting your home with exclusions!

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By Mike Edwards

 

Tenant excluded!

Landlords sometimes wish for whatever reason to exclude the tenant from having access to a specific part of the property. Typically this is usually the garage because the Landlord needs to leave a vehicle in it himself, or for other storage. Or it can be an attic or loft space which the Landlord wants for storage. Or it can be a cellar, perhaps because his collection of vintage wine is stored there, or possibly on safety grounds if it has narrow, steep stairs and poor lighting – the sort of thing an EHO assessor would love to find on an HHSRS inspection!!

But Landlords really need to consider how their personal preferences might impact on the tenant as normally they will be expecting to rent the whole of a property including any garage, loft or cellar. After all you wouldn’t expect the Landlord to reserve the rear garden to himself or the fourth bedroom for use as a mini gym – so why reserve these other areas and exclude the tenant from them.

Technically speaking unless it is a Resident Landlord situation where the Landlord has a legal right to access for some necessary purpose – such as access to his own PERMANENT accommodation within the building – it will almost always lead to difficulties if the Landlord reserves any of the accommodation to himself.

Possible problems.

First if he is constantly (or even infrequently) coming and going to the property to access his reserved area – and presumably he will be or otherwise why reserve it in the first place – the Landlord will eventually fall foul of the tenant’s peaceful occupancy rights as stated in the tenancy agreement and enshrined in and enforced through the 1977 Protection From Eviction Act.

Secondly there must be no meters or stop cocks or utility equipment of any kind which might need to be accessed especially in the case of an emergency, like a flood.

If the Landlord insists on excluding any part of the property that the tenant might normally expect to be ‘theirs’ then this must be discussed with and clearly explained to the tenant whose agreement must be clearly obtained. The Landlord must also realise any such exclusions may also have an impact on the rental value, especially if it is a garage.

Practical implications.

Any such areas must be securely locked so there can be no question of arguments and accusations if items thought to be in the excluded area disappear and the area should be excluded completely from the inventory other than to flag it up as not forming part of the tenancy and the tenant not being responsible for it in any way and at any time.

Basically exclusion of the tenant from any areas in a rented property and its grounds is best avoided if possible.

17Jun 2011

Rental Issues: Tenant Notice in periodic agreement.

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By Steve Roulstone

This is one of those subjects that always causes problems when Tenants wish to end a Tenancy but do not understand the manner in which the agreements have to be handled once an agreement has become periodic, so I would like to clarify, without giving to many ifs and buts, which is what you find whenever you research this issue, in simple terms.

Periodic agreement.

Firstly, let’s confirm what a periodic agreement is. This is when an Assured Shorthold Tenancy agreement has gone past its original fixed period and whilst the agreement still applies to both parties, it has not been superseded by another agreement and nobody has given Notice. This is a very common form of allowing Tenants to stay in the property, but without having to tie them down to another fixed period. As I have stated before, flexibility is usually the choice of the Tenant in reality and Landlords who wish to have fixed terms only, can cause Tenants to move on anyway, because they feel they no longer have the freedom to move when they wish.

Notice when they choose.

And this is why it is popular with so many Tenants, because the opportunity to move when they wish ensures they can make that move when it suits the Tenant. In reality, it is my experience, that just to have the flexibility does not mean that they will then leave. Rather being given a choice to make about committing to another period of time actually forces a decision as against moving when a Tenants agreements become periodic after the initial term, but it is when that notice is given, that problems can occur if the manner of notice is not followed correctly.

Correct Notice.

The correct way to give notice on a periodic agreement is firstly to do so in writing (some agents will accept e-mail, but always check rather than assume) and then if a problem occurs it is because of the timing of this notice. Any notice on a periodic agreement must be in line with the payment dates of the agreement. Therefore, if rent is paid from the first to the last day of the month, as the easiest example, whatever day notice is given, the Tenant will be responsible for the rent and property until the last day of the following month the notice was produced and handed over. To clarify further, no matter what date the notice is handed in, from the 1st to the last day, when the payment period is the 1st of the month to the last, the Tenant,’s notice will end on the last day of the following month, ensuring that the notice served covers a complete payment period from the 1st to the last day.

Varients.

The situation can alter if rent due date continues to be from the date the Tenancy started. In my case we always make the payment date the first, ensuring Tenants always leave on the last day of any calendar month. But if you moved in on the 10th, then your payment period is from that day until the 9th and your Tenancy will end on the 9th, and your notice will therefore always cover a full monthly payment period between the 10th and the 9th.

Knowledge.

Of course, knowledge is everything and hopefully your Agent/Landlord would have explained this at the start of the Tenancy, but because it is complicated and so many people believe that notice is just a four week period starting from the day notice is given, this so often becomes a confusing situation at the end of what has hopefully been an enjoyable stay. Again from personal experience, even when this is explained at the beginning of a Tenancy, if the Tenant has lived at the property for two to three years, then of course remembering becomes very difficult. So please bear with your Agent or Landlord when they explain this situation, they are after all, only explaining how the law works!

13Jun 2011

Current Property News: Jailed Rogue Agent fuels the fire for legislation at time of SAFE Agent launch.

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By Steve Roulstone

Two items of news were reported late last week, which are both of note but for differing reasons. One for the right reasons and one for the wrong reasons, but together they speak volumes about what the Industry is trying to do and what the Industry needs by way of regulation, which would in my opinion seriously reduce the number of times such events both occur and are therefore reported.

Launch of SAFE Agent scheme.

Better than expected numbers are turning to the SAFE Agent scheme which is really good news and reinforces my opinion that this type of scheme is exactly what the Industry needs and wants to be a part of. The very fact that so many Agents are looking for recognition in a way that they can announce to their customers, be them Tenants or Landlords that they operate in a way that all client’s monies are protected speaks volumes about the Agents who want to be seen as professional Companies and give re-assurance to their client base.

Government backing.

This scheme has been introduced simply because the Industry has felt that some recognition of professionalism was required by people within the Industry, who, by virtue of the organisations they belong to or who are able to represent, have been able to get both the message across quickly to what I believe to be a willing Industry (Certainly within Castle Estates) who seem to be embracing the message with open arms. What we need now is official recognition from the Government that they both support the scheme and will look to review registration of Agents sooner rather than later. Hopefully they will see by the numbers of Agents joining that the Industry will also embrace and because of the second item of news, see the need for Government legislation to support professionalism in the Lettings Industry.

‘Agent’ jailed for two years.

It is because we continue to see Agents stealing from their clients,  that Government legislation is still required, because even though we hope and will work towards SAFE Agent being a standard for all professional Letting Agent offices, it is only when the Government back us with registration that such occurrences can be really reduced. Allow me to repeat, for I have stated this many times, but registration of Agents who use sound proper methods of looking after client’s money and in running the business in general is the only way the Industry will become truly professional. We are now looking at an Industry, when Private Landlords are included, which is fast becoming responsible for 20% of UK Housing stock. How much longer can the Government ignore the shout for legislation?

 

Estate Agents.

It should also be recognised, that it is not just the Client’s money aspect of Management that needs to be legislated. In the last three years the Estate Agency market has jumped in their thousands in too Lettings and I know only too well, that many do not understand the legislation that any qualified Letting Agent would need to understand and learn before they could become achieve qualification. Now I could just imagine the clamour of noise if the situation had been reversed? Estate Agencies operate at best using RICS standards which have been adopted by the courts as a formal code of practise. Indeed there are far more statutory requirements upon professional Estate Agents than Letting Agents and I am sure the Estate Agents would be the first to shout loud and proud about standards should the reverse of the current market changes come about!

Good for everybody.

At the end of the day, all Industries benefit from raising standards and ours is no different. The problem in any sphere of operation is the people in it, and legislation always seeks to control people. So the sooner we are properly legislated, the sooner people such as Mr Stagg, will not be allowed to trade in the first place, for as the article points out – at present there is nothing stopping him from starting another agency the moment he leaves prison!

10Jun 2011

Property Landlord advice: Gardens and Renting how to get it right!

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By Steve Roulstone

This time of year, as agents visit the properties under their charge, the most common phone call to the Tenant, if they were not present during the property visit, becomes the request to tidy the Garden. So often the Garden, especially when the house concerned is a family home is so well tended and designed that when the property is let expectations about the manner in which it is kept can be misinterpreted resulting in disappointment at the very least and in some cases frustration and anger.

The problem.

We all know a tidy garden helps us rent the property, but Landlords need to understand that when they rent their property, whilst it is the Tenants responsibility to look after the house and garden in a proper manner, this does not necessarily mean it will be kept in the style you would wish. It is the translation of the term ‘proper manner’ which can cause the problem. If such a matter should reach court, as periodically they do, then the Judge is in all probability going to ignore any claim made against the Tenant because all a Tenant is charged to do is keep the Garden in reasonable order and not to the same standard or manner kept by the previous owners, as time would normally be given by the courts for the Tenant to address the issue.

Reasonable Standard.

This is what would be expected of all Tenants the problem being that reasonable can just be mowing the lawn and stopping the borders from being full of weeds. This does not include tending for plants, over wintering in a greenhouse or cutting back at the appropriate time of the year. The point that needs to be appreciated is that by renting the property you are accepting that the Tenants will be allowed to live in a manner which suits themselves and not how you may wish them too. The point being, that tending the garden to the standards you wish for is not required, just the ability to keep the appearance neat and tidy is all that should be expected by the Landlord.

Covering all bases.

This means that provision needs to be made prior to the property being rented to ensure the Landlord achieves what they want for the Garden. I myself, with a wife who just falls short of sleeping in the Garden, having just moved, made arrangements for a Gardener of our choice to visit the house every week. The resulting bill we pay, but were able to rent the property with Gardens tended at a better price. I believe this made the choice easier for our Tenants as they continue to enjoy a mature garden with plants flowering throughout the year. But even with this provision, we both know the Garden will slowly suffer, as nobody cares for a garden better than the Gardener!

Rent to a Gardener.

I have of course on many an occasion, been told by the prospective Tenant, ‘oh how lovely a garden I can look after’! Only to be disappointed by the lack of efforts they then put in. So my advice and I believe the only advice that can ensure the best results, is to ensure if it matters that much to you, the Gardens are looked after by the person you appoint – which means your own Gardener. I certainly would not suggest you do them yourself, as this would not be acceptable to the incoming Tenant.

Family home or Buy to Let?

Of course it matters so much as to why the house came to be rented in the first place and as so many houses that were lived in by Parents are now entering the Rental market, it is quite often that the Garden so lovingly nurtured by your parents is so important to you in how it is looked after by others. My advice in the past has also been to carry out a major re-fit if seeing the vegetable patch turn to weeds and slugs is going to be so upsetting. By having the Garden stripped and relayed to lawn for example, you remove the problem in one go. After all, nobody will ever look after the Garden in the manner your parents did and this can be a very good way of removing the garden as an issue, in the same way as ensuring the Bathroom and Kitchen (the two most important rooms in any house) are in a rentable condition, but that is another story!

08Jun 2011

Property Landlord advice: Length of Tenancy under BBC scrutiny.

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By Steve Roulstone

On Saturday morning I sat eating my Toast and Marmalade and was told during a report on the BBC 24 Hour News channel, that agreements for Tenants are six months long and that any Tenant who was in a property for longer than two years effectively became a squatter and could not be moved out! Well after I recovered from what I thought had been a tremendous shift in the legislation being introduced by the forthcoming Localism Bill I realised once again that here was my Industry being discussed on a National prime time News programme and once again the information being presented was at the very least misinformed if not just plain wrong!

Please check your facts.

It is a long term complaint of mine, that by allowing people to phone or e-mail or text in to News programmes, that the comments and therefore air time that is given to some outlandish views is so miss-representative of what the majority think and believe that it is treating the majority views with disrespect and paints such a false picture of whatever topic is being discussed as to be totally miss-leading of the nations views. But here we have a topic that I know about being given the same treatment by the chosen speakers who were given plenty of time to get the facts totally wrong.

Let’s put the record straight.

Firstly, that a Tenant who has been in a property for two years is as good as a squatter! Unbelievable! All I can say is if that was the Gentleman’s experience, then he needs to get better advice, because as long as the correct agreement is used to best suit the situation, then no matter if a Tenant has been in residence for ten years, both Landlord and Tenant rights remain the same. In fact, if the Landlord lived in the house as their main residence then with the correct agreement, when it is time for the Landlord to give notice, again providing that the notice is issued correctly should for some reason the Tenants not move out, which they would 999 times out of 1000 then the courts have no say in the matter and must award the property back to the Landlord.

Tenants can only stay six months?

Well forgive me but here is a situation which best serves both parties, because in order to ensure the Tenant is responsible in their actions and that the Tenant enjoys living at the property, an initial six months is just what is required, but that is not the end of it! I myself have just moved in to a property on a five year deal, which, with the correct clauses for bad health etc, is exactly what my wife and I wish for. It also suits the Tenant and with reason, for it should always be the case that length of Tenancy is for negotiation between the Tenant and the Landlord. But more interestingly, as a Letting Agent in my twelfth year of running an Agency, it is the Tenant who will always want the lesser time, indeed most stay in property under a periodic agreement after the initial period, which gives them the right to leave at short notice, because it suits their needs better!

Professional judgement!

Once again I see a situation that would have been presented in such a better manner if Professional Agents had been introduced to the situation (and it is a pity that once again I do not see our Industry professional bodies flying the flag for Letting Agents) at least the facts would have been correct, but perhaps it is because the powers that be at the BBC already know that the story would have much shorter legs, if a voice of common sense and reason was introduced to these sound bite discussions, which continue to pour confusion and fear on the housing market. What a pity that those who listened will probably consider the Lettings market something to be avoided. Instead of probably frightening house owners who cannot sell at present, they could have been re-assured that the rental market is a viable proposition and a possible answer to the lack of activity at a time when three times the normal number of properties than normally enter our market year on year are currently being rented throughout the UK!

03Jun 2011

Property Landlord advice: Student Accommodation and Council Tax for part time Students.

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By Steve Roulstone

I have recently come across a situation that I would both welcome comment on and happily post as a warning to all Student Landlords that possession of a Student card does not always mean that as far as the local Council are concerned, the person you are dealing with is not necessarily considered to be a Student. This has specific impact on the Council Tax status of your property.

Large Student accomnodation.

The situation we have just found ourselves in is somewhat complicated by the building in which the students reside. We manage a converted ex County Council building in the middle of Stafford, which comprises of two sets of accommodation, split by a central corridor. To maximise the Landlords return, one half is for Students and one half used for normal Council Tax paying workers. The Student half, comprises of 12 flats, with anywhere between four and ten rooms per flat. They have centralised kitchens, en-suite facilities and they all share one large common room on the ground floor. So not the usual Student accommodation, more purpose built.

Not enough hours.

The problem we encountered with the Student concerned was that they were only a part time Student, on a course which was for 16 hours per week. The problem arose when the Student concerned approached the Council for financial assistance, even though we had advised they would not be eligible. They were not, but the Council then questioned the Student status and quoted from their own web site that: ‘To qualify as a student, the course must be over 21 hours per week and last for at least one year’

Caught out.

I am sure we are not the first to have fallen foul of this ruling and because it is on the Council web site we cannot complain too loudly. But this does show one very alarming hole in what we normally accept as proof of status. This is that the Student card issued by the College is not sufficient proof for the Council to agree. In future we will be insisting on seeing the appointment letter as well as the Student card, because as usual in these situations the consequences are financial!

Consequences.

In the Councils eyes, any property which has been used as their main residence by a person who is not a registered Student (to their own translation) no longer applies for full Student discount. The end result is that the Council have asked for Council Tax for the whole flat for the period that the person lived in this accommodation. This totalled a period of six months. Now many people would already be aware of this rule, but obviously we were not and this is why I have chosen to post this information in this manner. It just proves the old adage; you are never too old to learn!

01Jun 2011

Current property News: 95% Mortgage starts to turn the key.

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By Steve Roulstone

We have seen several items in the press yesterday about the 95% mortgage starting to appear again and of course it has received mixed reviews. However the BBC report on Radio 2 during the lunchtime Jeremy Vine show hosted by Vanessa Feltz was nothing more than an attempt to get as many negative comments about the Banking world from the general public and lacked any real depth, however they did attract several sensible comments about how if housing sales are to start to improve again, a move to ease the deposit burden was bound to be the sensible solution.

Renting options.

The show focused on the options available to those who could not afford to purchase and it was nice to hear one commentator point out that renting is a perfectly viable and acceptable option now and certainly offers a plentiful and varied option of places to set up home (I say this as a Tenant myself) and indeed this same topic was discussed during the finance slot on BBC Breakfast show yesterday.  It is a fact that the rental market has shown consistent growth in demand over the last two years and I have commented many times through these pages that our market is very healthy at present.

Mortgage options.

Now to me these two facts point clearly to the need for better mortgages for Landlords as a way of easing the market and supplying rental property for current demand at the same time. This is another subject that I have mentioned before and I do not apologise for doing so again! It was clear however from the comments made during the show that Mortgages are an emotive issue  with one (poorly advised) person thinking any easing of Mortgage availability was just a way for banks to ‘line their pockets again’. Of course the facts are that Mortgages need to be made easier to obtain before the market starts to move again, no matter what sector of the market is considered.

Differant options.

One area that I do not agree with however is the split option of shared ownership, which has been trialled before (as the problem for first time buyers is not a new one) The problem for me is that no matter how long you own the property, when you come to leave you are still only left with half of the collateral built up in the property during your time under shared ownership. Now most people who use this scheme as a starter home, need to move on having got married, started a family and as is normal need more space. This means that moving to a bigger house can present just as many problems as finding a house in the first place, because shared ownership is only encouraged for started homes. Therefore, assumptions are being made that everybody will be able to improve their circumstances (income) during the period the initial property is shared. Experience tells me this is not the case and guess what? Most co-owners will not allow renting as a method of financing the next move!

One option stands out.

It is a little ironic that the same scheme is being championed again when in the past the rental market was seen as the solution to the eventual problem most shared owners find themselves in! With the current trends which are not only financial but also lifestyle choices for the majority of Tenants the rental market yet again shows itself as the market that can trigger an increase in house sales, if the proper Landlord tool was made available. Surely this is where the Mortgage Companies should be looking alongside any easing of deposits required; after all, buy to let properties have the additional support of that income behind them!

27May 2011

Franchise News: Franchise Networking days producing rewards.

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By Steve Roulstone

At Castle Estates we have regular Network Days where all of our Franchise offices get together and discuss our Industry at length. They give Franchisees the chance to discuss various issues with their compatriots, talking over problems that have occurred, sharing successful ventures and opportunities and trading methods and trends with each other. When we put these days together, we always try to have a central theme running through them, so that our offices can review what they have seen and review an area of trading all in one day. In the past these themes have been Web awareness, Property Insurance and associated products, Changes in legislation and Advertising.

Making the most from contacts.

This was the theme from this week’s get together and the success of the day has prompted me to put ‘finger to typepad’ and comment in this way. The contact and support that flow through these days mean that they become a seminal part of being a Franchisee. This, I believe is one of the major reasons that Franchising offers such a popular route to business success. Every Franchisee appreciated just how important it was for their colleagues to purchase a Franchise and respect is automatically granted. This is then shown through the discussions and ideas that flow through the day. They need to be seen to be understood, but I have never witnessed a similar scenario in any other type of Business meeting and I have attended many conferences and seminars over the years.

Property Portals

We had two portals represented on the day and both offer a different view to the market place. Gumtree only offer the Lettings Market on their site and are therefore important both as a lettings portal and by the way in which they attract the best type of prospective Tenant, whilst Rightmove as the market leader are a site that any self-respecting Letting Agent has to be seen on! As a result of the presentations, all of our offices now understand the options and services each portal offer, for as a punter you would only see the front end of the sites, whereas as a customer, there is a whole sea of reports and functionality available to us to help us understand where and why our prospective Landlords and Tenants visit us. The problem being just how difficult it is for everybody to understand the nature and power of the services these functions provide. It is safe to say that this style of day ensured that everybody left with much enhanced knowledge and will now utilise the functions to their benefit.

Landlord Insurance

Specialist Insurance is something that I have spoken about and something I recommend all Landlords to use, but again, following a procedure that has lasted a full 18 months and as a result of a Rental Industry  supplier that has listened to what we have told them and offices that have taken on board what their peers have recommended (length of service and experience being paramount) we now have a situation where the whole group is moving forward in an innovative way, using this crucial Landlord requirement.

The future.                                                                                                                 

Add the specialist software designed to ensure we make the most from website visitors that we discussed and the meeting was heralded by all to be a great day and this is the point. Only with Franchising are such progressive steps made so easily, because of the willingness from all present to share, assist and develop everybody’s business, not just their own. It is in the interest of every Franchisee to see progress for all offices in the network and there, in finishing this article, is that word again:

 Network: only truly available through Franchising!

24May 2011

Current Porperty News: TDS Legislation under threat.

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By Steve Roulstone

There have been reports in the press recently about the recent judgement in the Court of Appeal on the Gladehurst Properties Ltd v Hashemi. This case will undoubtedly have an effect on the Tenancy Deposit protection legislation, but rather than being a decision that will drive a nail in the coffin of the intended protection for Tenants, I believe that it will leave the door open for the matter to be addressed by the Government in the upcoming  Localism Bill and indeed this decision may encourage further legislation which could impose further requirements on the Industry as it is highly possible that such ‘holes’ will attempt to be plugged as well as any perceived problems brought to light by this judgement are considered as well.

Joint action required.

The case failed in the full award of the penalty as prescribed in the bill (Three times value of deposit as a fine) because of two problems the first being that this was a joint Tenancy and the action was bought by one Tenant (Hashemi) without the knowledge of the second (Johnston) (For clarity Gladehurst Properties Ltd were the Landlords) The implications of this are that Tenancies involving more than one person, such as Student or any joint Tenant situation, especially for example if one Tenant is not accessible (left the area, left with debt to the other parties) as it would become impossible for the second / remaining Tenant/s to take any action to recover the deposit. This is the kind of area I mean the Government may want to get involved in addressing. Then if the Tenants disagree? Well let’s just leave that one hanging!

Part returned Deposit.

Another area that could invite further legislation is the situation where some of the deposit has been returned, but not the whole. This is of course a common occurrence, especially for Private Landlords, as agents we should be aware of the implications, which will be clear no matter which scheme is used for Deposit protection. So the Landlord does not register, returns half the deposit and leaves the Tenants with no comeback or protection. This is where the main ‘hole’ will need to be fixed, but there is no doubt again that the Government will look at other areas where legislation could further protect the Tenants rights as intended under the initial legislation.

Further appeal.

I have also heard that many feel the case should be referred to the Supreme Court because of the long term implications to the TDS legislation but because of the sums involved this could be a none starter. But I think it is important to state and for Tenants and Landlords to understand that the implications are not yet fully known but it is not a case of the legislation being filed in the draw marked bin just yet! There is no doubt that it will be addressed and re-enforced by the Government 

There have been reports in the press recently about the recent judgement in the Court of Appeal on the Gladehurst Properties Ltd v Hashemi. This case will undoubtedly have an effect on the Tenancy Deposit protection legislation, but rather than being a decision that will drive a nail in the coffin of the intended protection for Tenants, I believe that it will leave the door open for the matter to be addressed by the Government in the upcoming  Localism Bill and indeed this decision may encourage further legislation which could impose further requirements on the Industry as it is highly possible that such ‘holes’ will attempt to be plugged as well as any perceived problems brought to light by this judgement are considered as well.

Joint action required.

The case failed in the full award as prescribed in the bill (Three times value of deposit as a fine) because of two problems the first being that this was a joint Tenancy and the action was bought by one Tenant (Hashemi) without the knowledge of the second (Johnston) (For clarity Gladehurst Properties Ltd were the Landlords) The implications of this are that Tenancies involving more than one person, such as Student or any joint Tenant situation, especially for example if one Tenant is not accessible (left the area, left with debt to the other parties) as it would become impossible for the second / remaining Tenant/s to take any action to recover the deposit. This is the kind of area I mean the Government may want to get involved in addressing. Then if the Tenants disagree? Well let’s just leave that one hanging!

Part returned Deposit.

Another area that could invite further legislation is the situation where some of the deposit has been returned, but not the whole. This is of course a common occurrence, especially for Private Landlords, as agents we should be aware of the implications, which will be clear no matter which scheme is used for Deposit protection. So the Landlord does not register, returns half the deposit and leaves the Tenants with no comeback or protection. This is where the main ‘hole’ will need to be fixed, but there is no doubt again that the Government will look at other areas where legislation could further protect the Tenants rights as intended under the initial legislation.

Further appeal.

I have also heard that many feel the case should be referred to the Supreme Court because of the long term implications to the TDS legislation but because of the sums involved this could be a none starter. But I think it is important to state and for Tenants and Landlords to understand that the implications are not yet fully known but it is not a case of the legislation being filed in the draw marked bin just yet! There is no doubt that it will be addressed and re-enforced by the Government

18May 2011

Current Property News: Buy to Let market grows in strength.

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By Steve Roulstone

Recent reports indicate that the Buy To Let market is, as I have been reporting for some time, growing in strength and therefore returning despite all the gloom and doom reports that the Financial Crisis would see an end to Private Landlords investing in property using this specialist mortgage.

Misrepresentation of Landlords.

This report raises several issues for me, the most glaring being the overall suggestion that Landlords buy property to get rich quick and that they will not do so ‘Under current circumstances’. Well excuse me for pointing out that this is obvious and the error in the unstated indication that ‘Getting rich quickly’ is why Landlords purchased property in the past. Well as one of these Landlords and as somebody who speaks to and knows many others, can I point out that by far the majority of Landlords chose and indeed choose property as an investment, because it has traditionally given a conservative return, but never actually lost money!

Markets will always dictate.

I have pointed out on these pages recently, that it is the market itself which will dictate both the number of properties available and the need for Landlords to supply that demand. We have seen Tenant demand rise steadily over the last three years and the % of rented UK housing stock confirms both the need and the ability for Property owners to supply the demand. What has happened however is that droves of new Landlords are being created by the inability of the Sales market to provide purchasers and the realisation that by renting property instead, they have been able to move on with their lives and plans. I myself now rent and have rented my main home for the next five years for the same reasons.

Rising rents, really?                     

The main push of this article is to concentrate on the amount of income generated from the rent and I find the statement that Landlords are being enticed because of the possibility of rising rents to be a little thin! Firstly, this totally ignores the more down to earth reasoning given above that owners are renting simply because they can, when they are finding it very difficult to sell, allowing them to get on with their lives, but the assumption still ignores the main reason for Landlords to buy or invest in bricks and mortar, which is historical, because property in the long term always gains in value and this is very much linked with the conservative expectation, set against the risk of either Currency or Stocks and Shares.

Tarred with the same brush.

It seems to me that the writer has looked at Property Landlords in a ‘one view take all’ approach, where the reality is so much different and far less simplistic. Is it my view alone that people who invest in property are more conservative than those who invest in more traditional methods? Either way, the market is driving this increase in new Landlords and what is not my belief alone is that it is both sustainable and shows no sign of decline for the foreseeable future!