Live in Tamworth? About to Retire and Privately Rent? You Could be £4,100 a Year Worse Off!

You read the personal finance pages of the newspapers and it all seems to be the impending pensions crisis … where people aren’t saving enough for their retirement. But it’s not the lack of Tamworth peoples’ future pension incomes that are my immediate concern. The fact is that so many of the future retirees in Tamworth over the coming decade, who never bought their home in the Millennial years of the 1990’s and 2000’s, will have to make some tough decisions regarding what house they live in when they retire anytime between now and 2038.

In Tamworth, there are 488 privately rented households, where the head of the household is between 50 years and 64 years of age (meaning they will be retiring anytime between now and 2038). They are working now and easily paying the rent, yet what happens when they retire?

A Tamworth retired couple, who currently privately rent and who have paid their fully qualifying NI stamp over the last few decades are likely to retire with the couples State Pension of £1,091 per month plus a tiny bit of private pension if they are lucky. Given that the average rent in Tamworth is £741 a month – a lot of that pension will be lost in rent. This means taxpayers will have no alternative but to step in and top up the rent payments with Housing Benefit, yet…

The maximum housing benefit for a couple in Tamworth is currently £393.90 per month … leaving a significant gap when you consider the average rent in Tamworth is £741 per month

It is most people’s opinion that retirees are either council tenants or own their home outright. Looking at these figures though, it looks like both these ‘mature’ private renters could be having to make some decisions on their lifestyle and where they live, possibly looking at downsizing the home they rent to make things more affordable in their old age. Also, the government will be in for a horrible surprise as more of Tamworth people retire and continue to rent from a private landlord. Numerous Tamworth private renters, with little or no savings, will have to rely on Housing Benefit, which will put greater pressure on the public purse.

The average Tamworth retiree will need to find £4,165 pa to stay in their privately rented home after retirement

A recent report from Scottish Widows suggested that 1 in 8 OAP’s will be privately renting by 2032, up from the current one in 15.47 OAP’s whom currently private rent (or 6.47%). In fact, in that report they said the equivalent of more than one-third of the whole annual NHS budget would be spent on Housing Benefit for OAP’s in retirement living in private rented property.

What does this mean for mature Tamworth homeowners? I see many using equity release schemes to stay in their homes to pay for a better retirement and others more open to downsizing, selling their large home to a family that needs it and moving into a smaller apartment or bungalow … yet lets be frank – they aren’t building bungalows in large numbers in Tamworth anymore.

And for the Tamworth landlords? Well with the younger Millennials showing no appetite in jumping onto the homeownership bandwagon anytime soon, it can only result in the demands on the buy to let market from Tamworth tenants rising substantially. Of course, many Millennials will inherit money from their home owning parents in the coming few decades, yet a lot won’t as it will be spent on nursing home care and any leftovers (if any) split between siblings.

The solution to all this is to build more homes, of course. Last year we created/built just over 217,000 households in the UK, up from a post Millennial average of just under 150,000 households a year. We need to get back to the building booms of the late 1960’s and early 1970’s when on average 300,000 households were built … but back to reality … that won’t happen so it looks like we are turning into a nation of renters, which is of course good news for Tamworth buy to let landlords!

For those retiring in post 2050/2060, there is better news as official reports suggest those retirees will enjoy a State Pension approximately similar to today’s pensioners with auto-enrolment into top-up private pensions through their employer.

Tamworth Buy to Let deals can be found on the Tamworth Property Blog. If you haven’t signed up to receive instant updates well – YOU are missing out! Join the 1,900+ people with a simple one click sign up. JOIN TODAY at www.tamworthpropertyblog.co.uk

https://www.facebook.com/hallandthompsonestateagents

https://www.facebook.com/hallandthompsonestateagents

Ask Lorraine – Letting Agent is asking for lots of information

ASK Lorraine

I was talking this weekend to a couple, I will call them Sandra & Jim. Apparently this couple were looking to move to Tamworth and had decided to try and rent through another private landlord, “Agents ask too many questions and charge too much in fees”.

So here is a little story………Parts of it are true other parts embelished to show that there are laws to renting out property!

Sandra went on to inform me that when they moved into their current property 3 months ago, they paid no fees to their kindly landlord and only 1 months rent as a deposit. The discounted council tax was paid in cash to the landlord. He ensured it was paid to the council, after all it was one less thing to have to think about, right!

What a shame that this kindly person is actually a rogue Landlord.

The landlord asked no questions and made no fuss! What he should have done was ask the right questions, carried out the Right to Rent checks as specified in the Immigration Act 2016.

So this rogue landlord had allowed the couple to rent a property. In actual fact if he had undertaken the correct checks, he would have found out the couple were not British citizens, nor citizens of a country in the EU or EEA, nor citizens of a country with no time limits on permission to live in the UK. Sandra and Jim should not have been allowed to rent a property.

The landlord did not provide his new tenants with the How to Rent booklet, annual gas safety inspection certificate, an energy performance certificate and a smoke alarm.

Sandra had found the new house very cold as the boiler was “waiting for a new part”. So the kindly landlord had given them an old coal fire and a big bag of coal as a temporary measure.

At least they would be warm in the living room with the coal fire blazing away and as the coal was cheap enough, they could easily leave the fire burning all night. It had been so nice of the landlord to offer this coal fire and weren’t they lucky they had a chimney place suitable for the coal fire.

They did not know that the landlord should have provided a carbon monoxide alarm.  (The Smoke and Carbon Monoxide Alarm (England) Regulations 2015). 

The Landlord asked for cash each week for the couple’s rent he never offered receipts or even a rent book. Sandra and Jim were unaware of their rights. The Landlord was either unaware or unwilling to comply with the 1988 Housing Act that if rent is paid weekly a rent book must be provided.

Sandra had set up a little nail business in the spare bedroom and was doing very well, she was hoping the business would be equally successsful in Tamworth.

The landlord was not happy when the elderly lady next door started complaining about lots of visitors coming at all hours of the day and night. The garden gate was often left to bang shut and this caused a nuisance to the elderly neighbour.

The landlord decided that he was going to evict using a Section 21 – but the tenancy must run at least 4 months before a notice could be served. What he has not realised, at the expiry of the notice, he will be expected to take them to Court, where his case would be thrown out because he did not serve the How to Rent booklet, or the Energy Performance Certificate, or the Gas Safety Certificate, nor did he protect the deposit. Had Jim and Sandra known more about the law and been in the property legally, they would have realized they could have visited the Citizens Advice Bureau and taken the landlord to Court for three times the deposit amount.

Legislation has a purpose; it seeks to provide a good standard of accommodation for all, to ensure that rent is paid for properties fit for purpose. Sandra and Jim may have had a low expectation of rental properties and did not know their rights however as Asylum Seekers, they needed to seek the assistance of the Home Office, not a landlord who risks a hefty fine or even a prison sentence. The landlord would also have HMRC chasing him for not declaring his rental income.

Hall & Thompson Tamworth  –  Estate/Property Lettings Agents.

From tenant find only, right through to a fully managed service, Hall & Thompson offer a personal property experience. We can be involved in letting a property and can take away the trials and tribulations that landlords often encounter when dealing with this themselves.

Residential lettings can provide attractive returns on investment and we can advise.

Our wide range of lettings services can help you to achieve your letting property investment goals, at a fraction of the cost of most high street letting agencies.

Call or message me today to have a natter. lorraine@hallandthompson.co.uk

or call 01827 425195

https://www.facebook.com/hallandthompsonestateagents

https://www.hallandthompson.co.uk

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

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

https://www.facebook.com/Hallandthompsonestateagents/

https://www.youtube.com/channel/UCyF9OUR3g6E8HywCx7tU4DA

https://www.linkedin.com/in/lorrainethompson2/

http://www.hallandthompson.co.uk

https://twitter.com/hallandthompson

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.

https://www.facebook.com/Hallandthompsonestateagents/

https://www.youtube.com/channel/UCyF9OUR3g6E8HywCx7tU4DA

Ask lorraine – My Tamworth tenants may have sub let, what are my responsibilities?

Energy Performance Certificate – How will this effect Tamworth’s Landlords?

In April 2018, residential private properties will need to have a minimum energy performance certificate (EPC) rating of E or it will be illegal to rent them out to tenants. The change from April 2018 will only apply to new tenancies and renewals. For existing tenancies the regulations will not apply until April 2020.

Local authorities will be responsible for enforcing the regulations, whether Tamworth BC have the time or manpower to do this added task,  I hardly think so! The local authorities  will have the power to serve a notice and request that a landlord provides documentation to prove compliance. Landlords who do not comply with these new regulations could find themselves with a hefty £5,000 fine.

Energy Performance Certificate
Energy Performance Certificate

 

 

 

 

 

 

 

 

Properties where the EPC rating is an F or G  are considered substandard  and will either need improvements carried out or will have to cease to be rented out. With only 8 months away to legislation, landlords are reminded to look at implementing improvement works sooner rather than later.

Works need to be cost effective for the landlord and permissible but landlords are at liberty to carry out works to an even higher standard, should they wish. 
As always there are exemptions to the rule –
  • The landlord’s tenant withholds consent for the works.
  • The landlord  was required to obtain a third party’s permission to undertake improvements, and the permission was denied. Or the third party imposed unreasonable conditions.
  • A qualified independent surveyor considers that the works will cause a capital devaluation of the property of more than 5%.

Exemption for listed buildings or buildings in a conservation area has not been made clear but it is hoped, when the  Government publish specific guidance for landlords in October this year, it will  confirm that listed building are exempt from the change. 

As with all Government policies until they are actually published there is no saying what they have deferred and if further exemptions are to be applied. So landlords it is a waiting game but  if you do decide to commence with improvements, it would probably be best not to commit lots of money and big improvements until all has been made clear.

 

Unhappy with your Property Manager? The best time to switch Letting Agents is mid-tenancy. Take us up on our offer and allow us to take care of the switching process. http://www.hallandthompson.co.uk or call Lorraine, Jackie or Jody on 01827 425195.

If you enjoyed reading my article, feel free to take a look my other online resources below:

https://www.facebook.com/Hallandthompsonestateagents/

https://www.tamworthpropertyblog.co.uk

https://www.youtube.com/channel/UCyF9OUR3g6E8HywCx7tU4DA

https://www.linkedin.com/in/lorrainethompson2/

192 Tamworth Households Occupied by OAP Renters

Recent statistics published by the Office of National Statistics show that there are 267,704 private rented households in the Country that are occupied by people aged 65 and older, meaning 4.39% of OAP’s are living in private rented property.

It got me thinking two things. How many of these OAP’s have always rented and how many have sold up and become a tenant?  In retirement, selling up could make financial sense to the mature generation in Tamworth, potentially allowing them to liquidate the equity of their main home to enhance their retirement income.  I wanted to know why these older people rent and whether there was opportunity for the buy to let landlords of Tamworth?

The Prudential published a survey recently that said nearly six out of ten OAP renters had never owned a home.  Two out of ten OAP renters were required to sell up because of debt, just about one in ten OAP renters sold their property to use the money to fund their retirement and the remaining one out ten OAP renters, rented for other reasons.

Funding retirement is important as the life expectancy of someone from Tamworth at age 65 (years) is 18.4 years for males and 20.7 years for females (interesting when compared to the National Average of 18.7 years for males and 21.1 years for females).  The burdens of financing a long retirement are being felt by many mature people of Tamworth.  The state of play is not helped by rising living costs and ultra-low interest rates reducing returns for savers.

So, what of Tamworth?  Of the 7,239 households in Tamworth, whose head of the household is 65 or over, not surprisingly 5,236 of households were owned (72.33%) and 1,631 (22.53%) were in social housing.  However, the figure that fascinated me was the 192 (2.65%) households that were in privately rented properties.

Tenure: Owned; Tenure: Shared ownership (part owned and part rented); Tenure: Rented from council (Local Authority Tenure: Private rented; Tenure: Living rent free;
72.33% 0.26% 22.53% 2.65% 2.22%

Anecdotal evidence, by talking to both my team and other Tamworth property professionals is that this figure is rising.  More and more Tamworth OAP’s are selling their large Tamworth homes and renting something more manageable, allowing them to release all of their equity from their old home.  This equity can be gifted to grandchildren (allowing them to get on the property ladder), invested in plans that produce a decent income and while living the life they want to live.

These Tamworth OAP renters know they have a fixed monthly expenditure and can budget accordingly with the peace of mind that their property maintenance and the upkeep of the buildings are included in the rent.  Many landlords will also include gardening in the rent! Renting is also more adaptable to the trials of being an OAP – the capability to move at short notice can be convenient for those moving into nursing homes, and it doesn’t leave family members panicking to sell the property to fund care-home fees.

Tamworth landlords should seriously consider low maintenance semi-detached bungalows on decent bus routes and close to doctor’s surgeries as a potential investment strategy to broaden their portfolio.  Get it right and you will have a wonderful tenant, who if the property offers everything a mature tenant wants and needs, will pay top dollar in rent!

If you are looking for an agent with experience that can help you find the right tenant for your property, then contact us to find out how we can get the best out of your investment property. Email me  on lorraine@hallandthompson.co.uk or give me a call on 07531484956. We can always meet up for a chat and a coffee, we can even walk the dog.

My work experience person.

 

If you enjoyed reading my article, feel free to take a look my other online resources below:

Follow The Buy-To-Let Property Investment Market in Tamworth

Lorraine’s Tamworth Property Market LinkedIn Page

Hall and Thompson Estate Agents Tamworth Facebook Page

Tamworth Hall and Thompson Estate Agents Twitter Page

 

 

 

 

 

 

 

 

 

 

 

Ask Lorraine – My tenant is refusing me access so that I can do my annual checks. What can I do?

🙋 Landlord’s Question: 

”Dear Lorraine,

My tenant is refusing access so that I can do my annual checks. What can I do to ensure they give me access?”

Lorraine’s Answer:

At this time of year, we often receive calls from landlords about problems they are facing in gaining access to rental properties.

When a landlord lets a property he is agreeing to give the tenant exclusive possession of that property and quiet enjoyment.

Check your tenancy agreement that you have a section which covers right of entry. Without the tenants permission or unless of course there is a real emergency you could be charged with trespass and the tenant could well claim damages against you or your agent. Not a nice thought when you are only trying to do your job!

Access is only permitted in one of two ways – a provision in the tenancy agreement or where the law grants a right of access, for instance, an emergency or to inspect or carry out repairs.
Landlords and agents should always give tenants notice of their impending visit, check your tenancy agreement as to the amount of notice you have to give. If the amount of notice is not stipulated on the tenancy agreement, landlords can use s11, Landlords and Tenant Act 1985 which allows access for repairs as long as landlords or agents give 24 hours notice prior to entering a rented property.

Landlords and agents should always look to give reasonable notice for access, keeping on friendly terms with tenants does help, however if the tenant is being unreasonable and constantly refusing access then the landlord or agent faces a very difficult situation. Speak to the council they may be able to help, after all if the tenant makes a complaint about the disrepair of the property to them, the council are quick to act then. Last and my least favourable option, due to the expense is to seek an injunction in the court to force your access.

It won’t hurt to be a good and friendly landlord, after all a bit of sugar goes a long way.

Until next week.

If you are a landlord or thinking of becoming one for the first time and you want to read more articles like this about the Tamworth Property Market, together with regular postings on what I consider the best buy to let deals in Tamworth (out of the many of properties on the market, irrespective of which agent is selling it) then feel free to get in touch!

Email me on Lorraine@hallandthompson.co.uk or call on 07531484956.

If you enjoyed reading my article, feel free to take a look my other online resources below:

Follow The Buy-To-Let Property Investment Market in Tamworth

Lorraine’s Tamworth Property Market LinkedIn Page

Hall and Thompson Estate Agents Tamworth Facebook Page

Tamworth Hall and Thompson Estate Agents Twitter Page