By Steve Roulstone

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

Location Location.

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

Few changes.

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

Close second

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

Where did they go?

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

Conclusions drawn.

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

By Steve Roulstone

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

Good call.

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

Without knowledge.

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

The correct way.

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

Professional Decorators.

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

Confirmation is everything.

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

By Steve Roulstone

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

Initial intent.

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

Renting on the increase.

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

Legal options on the decrease.

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

Every Agent in town.

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

Here is an irony!           

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

By Steve Roulstone

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

UK is larger than the South East.

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

Supply and demand.

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

Family needs catered for.

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

The difference.

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

A good shout well made!

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

 

By Steve Roulstone

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

Endesleigh understand!

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

The Telegraph does not!

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

Complicated process.

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

Facts do not lie.

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

By Steve Roulstone

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

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

 

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

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

By Steve Roulstone

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

The Facts.

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

Freedom of choice.

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

Change in pattern.

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

The bigger picture.

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

By Steve Roulstone

It has been a week of issues that repeat themselves at differing times in our Stafford office and the length of time that we are able to hold property has once again come to our attention.  We always receive calls from people who have decided to rent for a period after selling a home and the advice is usually the same. ‘Call us back at the most, six weeks before you are ready to move’. I have written before about the differences between Renting and selling property and what must be appreciated to understand the Landlords and agents requirements but there is still a lot of misunderstanding about how long a Landlord will hold a property for a prospective Tenant.

Change of mind.

One of the issues that rarely gets mentioned, is the way in which the law operates for Tenants and the fact that they can proceed with the intention of moving in to a property for months, and then have a change of mind for whatever reason, the day before without any penalty. What needs to be understood is that the Landlord has to start the process all over again and stand the loss of rent caused by the Tenant pulling out of the commitment. Experienced tells us that the shorter the period between the Tenant choosing a home and the day they sign the agreement (the day they move in) the less chance of a change of mind.

Normal circumstances.

It is also accepted by the majority of people renting, that apart from the need to give notice in the house they currently rent, by far the majority will move within a three week period. In fact it is still far more common for us to have Tenants wishing to move within one week than Tenants wanting to move in over six weeks! So the market itself produces a normal scenario and this is what most Landlords will expect. Therefore, when we do get asked to hold a property for a longer than normal length of time, as we must always ensure we follow the Landlords wishes, it is very rare for a Landlord to agree, rather, allowing any subsequent Tenants who wish to progress at an earlier date to rent the property instead.

Risk is inherent.

It is when a Landlord does indeed choose a Tenant wishing to move at an earlier date that the problems arise, because even though we confirm that we cannot accept the application for an extended wait, advising people that they have lost the property concerned understandably causes upset. We always ensure that we do not take any payment or accept referencing forms until we are able to commit any Tenant to the process, but even then, by following the Landlords wishes, as we are bound to do by our contract with the Landlord, as the Agent it is our staff that get the brunt of the disappointment, but it does explain why we always try to stop people looking for anything more than six weeks before they wish to move.

By Mike Edwards

A West London agent has been fined £250 with £250 costs, by the Courts for erecting a For Sale board in a conservation area and the story shows just how careful agents need to be and the lesson has to be, never assume! The agency was charged with the fine after admitting the offence at West London Magistrates Court yesterday [August 16]. The agent claims the fee was the minimum possible due to the court accepting that the crime was a genuine error and not a deliberate disregard for the law.

Following Instructions.

The incident happened in May, when a client asked the agent for a board to be erected in the same place as it had been seven months previously, which the estate agent duly completed. However, during the interim seven months, Hammersmith & Fulham Council had designated the road in question as a conservation area. The agent claims it was omitted from the list of estate agents notified of this change by the planning office and the offence was reported on May 9 and the board removed 24 hours later, after which the agent assumed the matter was closed. However, at the end of July the managing director received a court summons relating to the offence, which consisted of 34 pages of evidence, including the council’s claim for costs incurred for three hours of investigation and over three hours of legal fees.

MD Reaction.

The agent was stunned by the turn of events, and while admitting to having been in the wrong, said they thought the prompt removal of the board had resolved the matter at the time. It was not a fly board making false claims of success nor a board left up for months it was simply placed in a road where until October 2010 boards were permitted and erected at the request of a landlord who was also unaware of the new restrictions. The MD is convinced the council intended to make an example of his firm feeling that a simple fixed penalty system would save valuable time and resources with prosecution in the Courts reserved for repeat offenders and warns fellow agents that ignorance is no defence.

Summary.

Agents need to ensure that they regularly check their Local Authority Planning website and read public notices in local papers. ‘The onus is on the agent to check, not the Local Authority to inform.’ The council had sought a fine of £2,500 plus £500 costs, he said, but after hearing him speak, the court levied a fine of just £250 on the firm plus £250 costs so in the end not as onerous as the agent expected, but the guilty verdict did confirm where responsibility lay.

By Steve Roulstone

 

One issue that continues to raise its head from time to time is the condition of property when the Tenant moves in. Not when it has been left in any poor state by the outgoing Tenant, because any agent knows how to deal with that problem. After all it is in the agents power to do what is needed to deal with the state and condition of a property when it is the outgoing Tenant that has caused the problem and of course the Agent will also be aware when the work is going to be carried out and when the next Tenant is due to move in. No the problem I am referring to is when the property is new to the market, or new to the Agent and it is the Landlord who is not carrying out the work they have promised and the work is therefore NOT in the control of the Agent.

First impression.

 

It is not common for Agents to criticise Landlords, but when this happens it is the Agent that bears the brunt of the complaints from the new Tenant and let’s be honest, why shouldn’t they complain, if the first thing they have to do is clean the property from top to bottom because work they have been promised has not been carried out! I know how I would feel under such circumstances and even if it is just one room, because of say decoration, it matters not, because most Ladies will then feel the whole house has been left in a poor state. Now most of the time, one persons ‘clean’ is a matter of conjecture rather than a definitive condition, but the problems caused by allowing this situation to arise for the rest of the Tenancy can be very damaging.

No choice!

 

Of course the big problem for any incoming Tenant is the lack of options most would have when faced with a dirty house. In the majority of cases everything depends on the move and having either left another rented or property that has been sold, no other options exist and this is when bad feelings really set in because nobody likes to be left with a ‘fait accompli’ that they have no say in or no other choice. Left to fester, the Landlord immediately has a problem on his hands and I would venture to suggest that if the property is being self managed (Tenant find for the Agent) then it is highly possible that the whole Tenancy will fair badly from that moment onwards.   

 

Check it out!

 

There is no doubt when the Tenants do leave it is going to be very difficult for the Agent or Landlord to prove any damage or cleanliness issues caused by the Tenant and even if let’s say the garden is not looked after with an uncut lawn, heels will be dug in if it mentioned because of the state of the house when they moved in. The other area commonly causing problems is the furniture not wanted by the Tenant being left at the property. Put simply, just because the Landlord does not want it, why should the Tenant have to put up with it?

Start well – end well.

 

Compare that situation to a house presented in excellent order, clean and ready to be occupied. Then the Tenant starts the Tenancy well and knows that they are not the only ones who want or need to look after the property. Over the years we have had many situations like this, where the solution is not in our hands (We cannot employ cleaners or move furniture without permission) and the disappointment is that it continues to happen. Best advice is not always listened to, but the follow up from the Tenants is always heard, because we are the Agent of the Landlord and are duty bound to look after his interests it is our job to do so: But it does not mean we enjoy it!