Ask Lorraine – My Tamworth HMO and damage.

Ask Lorraine – We have been landlords of 2 apartments for 6 years now and have always had fantastic tenants. My husband talked me into adding to our portfolio and we are now running  a HMO. Wow, what a whole new ball game!

The HMO is our former much loved family home, we always had top of the range fixtures and fittings and it was  possibly much nicer than other HMO’s.

Shared House
Shared house

 

 

 

 

Our problem is that my husband seems to be at the property every week sorting issues out. Last night a tenant texted to say that the corner of the marble worksurface in the kitchen is badly chipped. Infact he states that he found a rather large piece of marble on the kitchen floor which he’s left on the hall table, should we need the piece to repair the worksurface.

We cannot understand how this could possibly have happened, surely this is not down to wear and tear?The problem is that it will be very difficult to prove who actually damaged the worksurface and to charge them.

Best Wishes Lily

Lorraine’s Answer – Hello Lily

You have my every sympathy, renting out your own former home is always a recipe for disaster.  No matter how careful the tenants are, they will they be harder on it than you ever were.

One piece of advice – make it nice for them but don’t go to the same expense as you would your own home. Tenants may not deliberately damage your things but as they haven’t had to pay for them the they won’t normally have the same feelings towards them.

The problem with HMO’s is that you cannot prove which resident damaged anything in the communal areas, so basically the landlord has to carry out the repairs and swallow any costs.

You’ve probably already found that running costs of a HMO are much higher than that of a normal AST type tenancy. If you are carrying out weekly repairs it may be in your best interests if you do your sums and decide if running a HMO is still good for you. After all you are running a business!

With the added costs, come the legislation on HMO’s, these  are a minefiled for even seasoned Landlords, maybe a headache too far?

Whatever you decide, I hope you enjoy your property journey.

Until next week

Thinking of Selling your property now or in the near future? Maybe you’re a landlord with property to Rent?

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Why Tenancy Agreements are Important to Tamworth Landlords

Yes, It is possible to create a tenancy without actually signing a tenancy agreement but who is crazy enough to do that?

Well you would be surprised –  Recently I  have been contacted twice by landlords who allowed tenants to move into their properties without having a tenancy agreement in place.

One of the landlords I am afraid to say does not want me to mention his case in my blog, apparently he is the butt of his friends jokes over his little issue. I have given him my advice and the rest is now up to him!Spit Handshake

The other landlord contacted me when his tenants failed to pay the deposit and rent. He allowed this “lovely” couple to take the keys and move in with the promise of paying the monies owed when they got paid, two days later.

When monies were not forthcoming and the landlord chased, he was told, this “lovely” couple were going to pay their rent in arrears and they knew nothing about any agreement to pay a deposit.

So we now have a frustrated landlord asking  “Can they pay their rent in arrears and what about the deposit?

Yes, they can, unfortunatley.

Under common law, rent is payable in arrears unless there is a tenancy agreement in place and the agreement states rent is payable in advance.

With regards to the deposit, the landlord has no recourse, where is the proof.

By using a properly drafted tenancy agreement Landlords go a long way to protecting their position. It is unwise to add and remove clauses without legal advice  as they can be classed as unfair terms .

For example a clause will normally be unfair if it takes away a right which a tenant would normally have in law.

If you want to prohibit something a tenant would normally be able to do, such as re-decorate the property, your clause must contain wording providing for the tenant to request permission to do whatever they are wanting to do and must state that “the permission will not be unreasonably refused”.

Countless landlords have invalidated their pets clauses by removing this wording on the basis that “no pets allowed in this property under any circumstances”.

A tenant can request permission for something but it does not mean that you have got to agree to it. It may be reasonable to refuse your permissionm, that is your right as a Landlord. But if you deny tenants the chance to request permission – this will invalidate the clause, meaning that there is nothing to stop them keeping whatever pets they like.

Tenancy agreements need to be fair and written in plain English, they can include clauses to protect the landlord’s position. i.e. –

Notifying tenants that you will provide their details to utilities if they default on payment. You should also note down that you may also use tracing agents if they leave owing you money.

Everyone living in the property, including all children are named in the tenancy agreement and there should be a clause saying that no one else is allowed to live in the property.

Remember doing business on spit and a hand shake is no longer good practice 🙁

until next week.

Landlords, would you like a second opinion on a potential Buy-to-Let property or do you have nagging concerns – please feel free to contact us on 01827 425195 or 07531484956.We are here to help you on your property journey.

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Tamworth’s £72,380,160 “Rentirement” Property Market Time Bomb

Yes, I said ‘rentirement’, not retirement … rentirement and it relates to the 488 (and growing) Tamworth people, who don’t own their own Tamworth home but rent their home, privately from a buy to let landlord and who are currently in their 50’s and early to mid-60’s.

The truth is that these Tamworth people are prospectively soon to retire with little more than their state pension of £155.95 per week, probably with a small private pension of a couple of hundred pounds a month, meaning the average Tamworth retiree can expect to retire on about £200 a week once they retire at 67.

The average rent in Tamworth is £618 a month, so a lot of the retirement “income” will be taken up in rent, meaning the remainder will have to be paid for out their savings or the taxpayer will have to stump up the bill (and with life expectancy currently in the mid to late 80’s, that is quite a big bill …  a total of £72,380,160 over the next 20 years to be paid from the tenant’s savings or the taxpayers coffers to be precise!

You might say it’s not fair for Tamworth tax payers to pick up the bill and that these mature Tamworth renters should start saving thousands of pounds a year now to be able to afford their rent in retirement.  However, in many circumstances, the reason these people are privately renting in the first place is that they were never able to find the money for a mortgage deposit on their home in the first place, or didn’t earn enough to qualify for a mortgage …and now as they approach retirement with hope of a nice council bungalow, that hope is diminishing because of the council house sell off in the 1980’s!

For a change, the Tamworth 30 to 40 somethings will be better off, as their parents are more likely to be homeowners and cascade their equity down the line when their parents pass away.  For example, that is what is happening in Europe where renting is common, the majority of people rent in their 20’s, 30’s and 40’s, but by the time they hit 50’s and 60’s (and retirement), they will invest the money they have inherited from their parents passing away and buy their own home.

So, what does this all mean for buy to let landlords in Tamworth?

Have you noticed how the new homes builders don’t build bungalows anymore … in fact some would said the ‘bungalow storey’ is over.  The waning in the number of bungalows being built has more to do with supply than demand.  The fact is that for new homes builders there is more money in constructing houses than there is in constructing bungalows.  Bungalows are voracious when it comes to land they need as because bungalow has a larger footprint for the same amount of square meterage as a two/three storey house due to the fact they are on one level instead of two or three.

That means, as demand will continue to rise for bungalows supply will remain the same.  We all know what happens when demand outs strips supply … prices (i.e. rents) for bungalows will inevitably go up.

if you would like to read more articles on my thoughts on the Tamworth property Market – please visit the Tamworth Property Market Blog

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Government Legistlation on Tamworth Landlords – Day 7

The  Deregulation Act 2015 – 1 October 2018  which is being debated in parliament could hugely improve the lives of many renters in England.

Latest news on the Homes  (Fitness for Human Habitation and Liability for Housing Standards) Bill 2017-19

The House of Commons voted for the Bill to be sent to a Public Bill Committee, they will scrutinise the Bill  – date to be announced.

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What laws are changing which will affect Tamworth landlords? – Day 6

With more and more people moving into rented accommodation, the government has put into law better protection for tenants. The law also provides landlords greater clarification on their responsibilities.

Deregulation Act 2015 – 1 October 2018 – Day 6 

The provisions as outlined below that came into effect for England on 1 October 2015 will apply to all tenancies from 1 October 2018 and not just new tenancies or renewals:

  • Requirement to have given an EPC in order to serve section 21 notice
  • Requirement to have given a gas safety record in order to serve Section 21 notice (no fault)
  • Government introduced a new standard form that landlords must use when evicting a tenant under the ‘no fault’ (section 21) procedure (form 6A)
  • No longer need to expire section 21 “after last day of a period”
  • Section 21 cannot be served for first four months and can no longer be used from six months after service
  • Apportioned rent rules after service of section 21 notice
  • Retaliatory eviction provisions

Note that the providing of the How to Rent Guide is excluded from the list and is not required for tenancies before 1 October 2015 unless renewed after.

 

Confused ?

confused
confused

 

Call us at Hall and Thompson (01827 425195) – Tamworth  if you’d like some extra  information on letting your property. Thanks

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Government Legislation for Tamworth Landlords – Day 5

In December 2015 the process of agreeing a new set of legislation ensuring the rights of EU residents  was completed. This was approved in 2016 and becomes enforceable on the 25th May 2018.

So to make it clear, significant changes are being made to the Data Protection rules.

GDPR

Day 5 – General Data Protection Regulations (GDPR)

This new legislation is designed to enable individuals to better control their personal data.

The changes will require you to audit what information about people you hold, what you do with it and how long it is retained.

Any processing of data based upon consent will significantly change and any consents obtained will need to be granular and opt-in.

What is “Personal Data”?

“Personal data” is defined in both the Directive and the GDPR as any information relating to an person who can be identified, directly or indirectly, in particular by reference to an identifier such as a name, an identification number, location data, online identifier or to one or more factors specific to the physical, physiological, genetic, economic, cultural or social identity of that person.

So in many cases online identifiers including IP address, cookies and so forth will now be regarded as personal data if they can be (or are capable of being) without undue effort linked back to the data subject.

To be clear there is no distinction between personal data about individuals in their private, public or work roles – the person is the person.

This new legislation is a minefield so I would recommend Landlords start to look at the data they hold.

More information can can be found on the Information Commissioners Office website

 https://ico.org.uk/for-organisations/guide-to-the-general-data-protection-regulation-gdpr/

 

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Amendment to Tamworth Landlords Regulations – Day 4

From 1st  or 6th April 2018 (conflicting dates  information) there is some good news for landlords.

gas man

Day 4 –  Gas Safety (installation and use)

A landlord will be able to have a gas safety record completed up to 2 months before the gas certificate date expires. Once completed the following record will not need to be from 12 months of the last check but instead the deadline date will remain for the following year. This allows landlords to get gas safety records completed up to two months earlier and not be penalised.

More information about this and the other changes being made can also be found on the HSE website.

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Tamworth Landlords Legislation for 2018 – Day 3

The news is currently full of government legislation for renting out residential properties and raising standards.

Day 3  – Energy Performance Certificates 

From 1st April 2018 there are minimum energy level regulations (MEES), any building which is to be rented on a new tenancy or a renewal, must have a minimum energy rating of “E”.

Energy performance certificate
EPC

Furthermore from 1 April 2020, the minimum level “E” applies to all tenancies, including existing.

There are a number of exemptions available and if one of those exemptions apply, the property must be registered on the National PRS Exemptions Register.

All residential properties require an EPC certificate if they are being sold or let, if you need one completed, please get in touch.

Hall and Thompson are still conducting viewings and letting properties. Please phone 01827 425195 if you are looking for a property. Almost fully booked for today but still have availability for tomorrow.

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With Tamworth Annual Property Values 11.3% Higher, This is My 2018 Forecast

 

Looking at the newspapers between Christmas and New Year, it seemed that this year’s sport in the column inches was to predict the future of the British housing market. So to go along with that these are my thoughts on the Tamworth property market.

With the average 5-year fixed rate mortgage at 1.98% (down from 3.47% in 2014) and 2-year fixed rate at 1.47% (down from 2.37% in 2014), mortgage interest rates offered by lenders are at an all-time low (even with the slight increase on the Bank of England base rate a few months ago). Added to this, there has been a low unemployment rate of 3.5% in Tamworth, which has contributed to maintain a decent level demand for property in Tamworth in 2017 (interestingly – an impressive 1,229 Tamworth properties were sold in last 12 months), whilst finally, the number of properties for sale in the town has remained limited, thus providing support for Tamworth house prices, meaning …

Tamworth Property Values are 11.3% higher than a year ago

However, moving into 2018, there will be greater pressures on people’s incomes as inflation starts to eat into real wage packet growth, which will wield a snowballing strain on consumer confidence. Interestingly though, information from the website Rightmove suggested over a third of property it had on its books in October and November had their asking prices reduced, the highest percentage of asking price reductions in the same time frame, over five years. Still, a lot of that could have been house-sellers being overly optimistic with their initial pricing.

In terms of what will happen to Tamworth property values in the next 12 months, a lot will be contingent on the type of Brexit we have and the impact on the whole of the UK economy. A lot of people will talk about the Central London property market in the coming year, and if the banking and finance sectors are negatively affected with a poor Brexit deal, then the London market is likely to see more of an impact.

Nevertheless, the bottom line is Tamworth homeowners and Tamworth landlords should be aware of what happens in the rollercoaster housing market of Central London, but not panic if prices do drop suddenly there in 2018. Over the last 8 years, the Central London property market has been in a world of its own (Central London house prices have grown by 89.6% in those last 8 years, whilst in Tamworth, they have only risen by 35.5%). So we might see a heavy correction in the Capital, whilst more locally, something a little more subdued.

Hindsight is always better than foresight and predicting anything economic is all well and good when you know what is around the corner. At least we have the Brexit divorce settlement sorted and, as the UK economy and the UK housing market are intertwined, it all depends on how we deal as a Country with the Brexit issue. However, we have been through the global financial crisis reasonably intact … I am sure we can get through this together as well?

Oh, and house prices in Tamworth over the next 12 months? I believe they will end up between 0.4% lower and 1.2% higher, although it will probably be a bumpy ride to get to those sorts of figures.

If you would like to read more articles on my thoughts on the Tamworth property Market – please visit the Tamworth Property Market Blog

If you want to learn about the Tamworth Property Market , one source for information is the Tamworth Property Blog authored by yours truly at https://www.tamworthpropertyblog.co.uk

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My thoughts on the future of the Tamworth Buy-To-Let Market

 I was recently reading a report by the Home website which suggested that hordes of landlords are selling their buy-to-let investments due to increasing burdens on them in the buy-to-let market. Their findings suggest the number of new properties that came onto the market nationally (for sale) jumped by 11% across the UK as a result.

Those increasing burdens include new tax rules coming in over the next 3 to 4 years and the announcement that all self-managing landlords (i.e. landlords that don’t use a letting agent to look after their buy-to-let property) will soon need to register with a compulsory redress scheme to resolve tenant arguments and disputes; as Westminster wants to heighten standards in the Private Rented Sector.

Interestingly I was chatting with a self-managed landlord from Bonehill, when I was out socially over the festive period, who didn’t realise the other recent legislations that have hit the Private Rented sector, including the ‘Right to Rent’ regulations which came in to operation last year. Landlords have to certify their tenants have the legal right to live in the UK. This includes checking and taking copies of their tenant’s passport or visa before the tenancy is signed. Of course, if you use a letting agent to manage your property, they will usually sort this for you (as they will with the redress scheme when that is implemented).

If you are a self-managed landlord though, the consequences are severe because if you let a property to a tenant who is living in the UK illegally, you will be fined up to £3,000. That same Bonehill landlord met me for coffee at Druckers  in the New Year, and I checked all his paperwork and ensured he was on the right side of the law going forward – and I offer the same to any landlord in the Tamworth area if you want me to cast my eye over your buy to let matters (and at no cost)

But what of all these extra properties being dumped onto the market in Tamworth? When I looked at the records the number of properties on the market in Tamworth now, as opposed to a year ago, the numbers tell an interesting story …

 

1st Jan 2017 1st Jan 2018
Detached 110 162 47%
Semi 90 105 17%
Terraced 43 35 -19%
Flat 33 45 36%
Plots +
Other
7 10 43%
Total 283 357 26%

Overall, Tamworth doesn’t match the national trend, with the number of properties on the market actually rising by 26% in the last year.  It was particularly interesting to see the number of detached increase by 47%, yet the number of terraced on the market drop by 19%.

However, speaking with my team and other property professionals in the town, the majority of that movement in the number of properties and the types of properties on the market isn’t down to landlords dumping their properties on the market. The whole property market has changed in the last 12 months, with the majority of the change in the number and type of properties for sale due to the owner-occupier market, not landlords (a subject I will write about soon in my Tamworth Property Market blog later this Spring?). You see, for the last ten years, each month there has always been a small number of Tamworth landlords who have been releasing their monies from their Tamworth buy to let properties – as is the nature of all investments!

Nationally, the number of rental properties coming on to the market to rent fell by 16% in Q4 2017 compared to Q4 2016 .. but that isn’t because there are 16% less rental properties to rent – it’s because tenants are staying in their rental properties longer meaning less are coming on the market to be RE-LET.

Nevertheless, some Tamworth landlords will want to release the equity held in their Tamworth buy to let properties in 2018. All I suggest is that you speak with your letting agent first, as putting a rental property on the open market often spooks the tenants to hand in their notice days after you put it on the market (because they don’t like the uncertainty and also believe they will become homeless!). This means you have an empty property, costing you money with no rent coming in.  However, some letting agents who specialise in portfolio management have select lists of landlords that will buy with sitting tenants in. If you have a portfolio in the Tamworth area and are considering selling some or all of them – drop me a line as I might have a portfolio landlord for you (with the peace of mind that you won’t have any rental voids).

If you want to learn about the Tamworth Property Market , one source for information is the Tamworth Property Blog authored by yours truly at https://www.tamworthpropertyblog.co.uk

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