Tamworth Tenant’s Deposits held total £2,458,500

With the Government preparing to control tenant’s deposits at five weeks rent, Tamworth landlords will soon only be protected in the event of a single month of unpaid rental-arrears, at a time when Universal Credit has seen some rent arrears quadrupling and that’s before you consider damage to the property or solicitor costs.

It can’t be disputed that the deposits Tamworth tenants have to save for, certainly raises the cost of renting, putting another nail in the coffin of the dream of home ownership for many Tamworth renters. At the same time, those same deposits being unable to provide Tamworth landlords with a decent level of protection against unpaid rent or damage to the property.

In fact, the total of all the tenants’ deposits in

Tamworth, deposited or protected, is £2,458,500

When you consider the value of all the privately rented properties in Tamworth total £705,361,800, the need for decent landlord insurance to ensure you are adequately covered as a Tamworth landlord is vital.

However, I want to consider the point of view of the Tamworth tenant.  Several housing charities believe spending more than a third of someone’s salary on rent as exorbitant, yet for the tenants they find themselves in that very position.  I feel especially sorry for the Tamworth youngsters in their 20’s who want to rent a place for themselves, as they face having to pay out the rent and try and save for a deposit for a home.

The average 22 to 29-year-old in Tamworth spends 33% of their typical salary on a one bed rental property

….and 39% of their salary for a 2-bed home in Tamworth.

40 years ago, British people who rented spent an average of 10% of their salary on rent, and only 14% in London.  Looking in even greater detail, according to the ONS, over the past 60 years the proportion of total spending on all housing (renting and mortgages) has doubled from 9% in the late 1950’s to 18% today.  Whilst on the other hand, the proportion of total expenditure on food has halved (33% to 16%), as has the proportion of total spending on clothing (10% to 5%) … it’s a case of swings and roundabouts!

Yet landlords also face costs that need to be covered from rents including mortgages, landlord insurance (especially the need for the often-inadequate deposits to cover the loss of rent and damage), maintenance and licensing.  In fact, rents in the last 10 years have failed to keep up with UK inflation. So in real terms, landlords are worse off when it comes to their rental returns (although they have gained on the increase in Tamworth property values – but that is only realised when a property sells).

There are a small handful of Tamworth landlords selling some/or all of their rental portfolio as their portfolios become less economically viable with the recent tax changes for buy to let landlords, which will result in fewer properties available to rent.

However, this will reduce the supply and availability of Tamworth rental properties, meaning rents will rise (classic textbook supply and demand), thus landlords return and yields will rise.  Yet, because tenants still can’t afford to save the deposit for a home (as we discussed above) and we are all living longer, the demand for rental properties across Tamworth will continue to grow in the next twenty to thirty years as we turn to more European ways where the norm is to rent rather than buy in the 20’s and 30’s age range. This will mean new buy-to-let landlords will be attracted into the market, buy properties for the rental market in Tamworth and enjoy those higher yields and returns … isn’t it interesting that things mostly always go full circle?

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Ask Lorraine – I’m renting to my cousin surely I don’t need to complete The Right to Rent Checks?

ASK Lorraine:
“Hello Lorraine,
I’m a Tamworth Landlord, manage my own property portfolio and have done so for a number of years.  My question is, these recent guidelines that I read about called  ‘Right to Rent check’ –  must I now do this for any new tenant, is this compulsory? Why I’m asking is that I’m considering renting out a property to my cousin. Surely the Right to Rent check does not include family and friends.
Thanks
Alan”
Lorraine’s Answer:
Hi Alan,
The Right to Rent checks were introduced to Tamworth as of 1st February 2016. It’s part of the Immigration Act 2014 which is to ensure that no Landlord or agent permits any adult to occupy a dwelling unless they have a ‘Right to Rent’ in the UK.
The responsibility for these checks has been passed down from the Home Office to the Landlord or agent acting on behalf of a Landlord. Checks MUST be carried out prior to the start of the tenancy. All adults must be checked regardless of nationality,ethnicity or blood group, so even though you are looking to rent to your Cousin you should keep on file a copy of his/her passport. Under age children do not need checking, you should verify their age and keep a note on file. All pertaining  paperwork should be retained on file for as long as required. 
It is a criminal offence if you are seen to be making exceptions to the checking process i.e people who appear to be English.  So if you make it statutory as part of your business process to check every man and his dog,  you will not fall foul of the law.

Passport
So who has the right to rent?

 

 

1/A British citizen.
2/A European Economic Area (EEA) or Swiss national.
3/Has a right to rent in the UK e.g has a valid visa which expires after the proposed tenancy end date.
There are a number of documents which can be used to check the Right to Rent, the usual ones being passports, identity cards and visas, for more information and a full list , check out the governments website.

Should you not feel confident to carry out  the checks yourself, there are many referencing companies who will complete these checks on your behalf.

If you have any further questions, feel free to drop me an email or give me a call. Email me on lorraine@hallandthompson.co.uk or  call on 07531484956.
Don’t forget to visit the links below to view back dated deals and Tamworth Property News.
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Ask Lorraine – What Documents do I need for my Tamworth property before renting it out?

🙋  Landlord’s Question: 

“Dear Lorraine,

I have just bought my first buy to let property in Tamworth, it’s  a two bed semi detached in Amington.  I’ve find out what type of tenants I can attract to the property and also what rent I can hope to achieve.

I’m still rather perplexed with all the legislation over renting and what documents I need inorder to rent my property out.

What documents and checks do I need to do before I can move my  tenants in?

Angel’’

What Documents do I need for my Tamworth property before renting it out?
What Documents do I need for my Tamworth property before renting it out?

 

 

 

 

 

 

 

 

 

Lorraines Answer

Congratulations, you’ve taken the first step of becoming a landlord, however with it comes lots of legal hoops to jump through to ensure the property you are renting is safe for your tenants to live in.

You will find some  are some legally required while others at present, are recommended as best practice.

Gas Safety Certificate

As a landlord, you have a legal responsibility to instruct a Gas Safety registered engineer to carry out the checks and provide the certification. You need to give this certificate to the tenant when they move in. You also need to make sure that  the gas  safety check is carried out annually with a copy being given to the tenant.

Legionella Risk Assessment

Landlords are responsible for keeping properties safe and free from health hazards, including from the risk of  legionella.

Legionellosis which is found in water  is the collective name given to the pneumonia-like illness caused by legionella bacteria. This includes the most serious legionnaires’ disease, as well as the similar but less serious conditions of Pontiac fever and Lochgoilhead fever.

As a landlord, your responsibility is to have a competent person carry out a risk assessment to assess the risk of exposure to Legionella. Many landlords choose to carry out the assessment  themselves, however the buck then stops at their doorstep. If you decide to carry out the risk assessment yourself please ensure you know what you are doing. For the sake of approx. £50 It may be safer to use a contractor to carry this out.

Energy Performance Certificate (EPC)

The energy performance certificate is required if you sell or rent a property. You should have one from the purchase of your recent buy to let property.

The certificate is to check the energy efficiency of your property. They last for ten years and grade your property on their efficiency.

Regulations came into force as of  1st April 2016, whereby tenants can request consent from their landlords to carry out energy efficiency improvements to their properties. The request should have no cost implications to the landlord, unless of course, the landlord agrees to pay towards the works.

From April 2018, your property will need to have a minimum rating of E, which means a lot of older and poorly insulated properties may struggle to achieve the  E or above rating.

Electrical Certificates or PAT Tests

Electrical Certificates are  currently best practice, however it is legally required that any electrical installation is safe and in full working order at the beginning and during the  length of the tenancy.

Recommendations suggest having a professional carry out the electrical certificate every five years.

In single let residential property, there is no current  legal requirement  to carry out a PAT test. If you do supply portable appliances and don’t have a PAT test carried out, you should carry out visual inspections to ensure there are no cracks or burn marks to sockets and the wiring is not damaged.

Smoke and Carbon Monoxide Alarms

A smoke alarm is required on each floor level, they must be checked to ensure they are in proper working order at the start of a new tenancy.

Carbon Monoxide (CO2) alarms are only legally required where there is a solid fuel burning appliance . As gas is not a solid fuel, there is no legal requirement. Best practice would be to install a CO2 alarm within close proximity to a gas boiler, manufacturers instructions will advise.

So a lot to think about and sort before renting out your Tamworth property.

Good luck Angel and enjoy your property journey.

Until Next Week.

If you are looking for an agent with experience that can help you prepare your property and find the best tenants for it, then contact us to find out how we can get the best out of your investment property.

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Living on a Narrowboat in Tamworth – The Ups & Downs

My good friend Paul Morris who is an Estate Agent for  narrowboats, yes really there is such a job! Anyway Paul was trying to convince me, why living on a narrow boat is such a wonderful carefree experience and why he would choose a narrowboat over a house.

I asked him to write a blog putting his side forward as to why owning or renting a narrow boat is preferable over a static house, does it convince me?

rosie and jim
rosie and jim

 

 

 

 

 

 

“Is it cold in winter? Where do you go to the loo? The two most commonly asked questions of people who live on narrowboats. To answer the first, No, it’s great as long as you have a log burner. Added to which you’ll find people will be GIVING you wood to burn, a bit different from British Gas? To answer the second question, usually it’s a cassette toilet, a portable loo, you have to empty into a tank every week or so. It’ not pleasant, but like changing nappies it’s something you get used too.

Other down sides include the lack of space So if you’re a hoarder think about decluttering or putting extra stuff in storage. On the upside you don’t have to pay Council Tax on a rental narrowboat.

If you don’t like your neighbours or change jobs you can pull up the proverbial anchor and sail on somewhere else (check with your landlord/landlady) If you’re a nature lover nothing can be better than being on the canal with moor hen, yin, and swans as your neighbour.

Plus if you fancy a day trip/weekend you can take the boat out, without worrying about accommodation.

Much like renting a house it’s the ‘unseen’ bills that can cause problem. It depends on the deal you set up with your landlord/landlady. Like renting a house you’ll be liable to be credit reference checked and pay a returnable deposit.

As well as mooring fees, which is the charge to park the boat long-term at a marina, there are other costs which you might be liable for.

Canal & River Trust Licence: This is the canal and river version of road tax. The amount paid varies on the size of the boat but it can cost  hundreds of  pounds a year.  For more information see:

https://canalrivertrust.org.uk/enjoy-the-waterways/boating/licensing-your-boat/choosing-and-buying-your-licence:

Boat Safety Certificate

This certificate is required to prove that the boat you are renting is safe to live on. The cost of this should be met by your landlord/landlady

Insurance

The narrowboat should be insured against fire/damage etc by your landlord/landlady. But you might want insure your possessions on the boat with some of your own contents insurance.

Utilities

Electric usually comes from a plug in type arrangement at the marina, and is payable by the renter. Most cookers run on Calor Gas bottles which the renter buys. Water is usually included in the mooring fees. For internet/Wifi, there’s no phone point so you would need a mobile Wifi solution.

Editor ….Paul Morris 

I can certainly see why living on a narrowboat ticks quite a few boxes, perhaps Tamworth Council should think about narrowboats for renters, after all they aren’t building nearly enough houses.

Does one have to purchase a TV licence on a narrowboat??

It appears that Landlords of narrow boats also have  lots of regulations to comply with, why not contact Paul if you need advice.

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Tamworth’s housing affordability hits a ratio of 6.75 to 1

A Tamworth homeowner emailed me last week, following my article posted in the Tamworth Property Blog about the change in attitude to renting by the youngsters of Tamworth and how they thought it was too expensive for first time buyers to buy in Tamworth.  There can be no doubt that buy to let landlords have played their part in driving up property values in Tamworth (and the UK) and from that made housing a lot less affordable for the 20 and 30 somethings of Tamworth.

In the email, they said they thought the plight of the first-time buyers in Tamworth was like a novice tennis player, playing tennis with Andy Murray. If you played him once you will unquestionably lose and if you were to play him 100 times you would lose 100 times. That is what they thought it was like for all the 20 something’s first time buyers of Tamworth going against all the buy to let landlords.

They went on and asked if the Bank of England (BoE) should be tasked to control house price inflation in the same way as the BoE controls inflation.The BoE has a target for the annual inflation rate of the Consumer Prices Index of 2%, whilst it is also required to support the Government’s economic policy, including its objectives for growth and employment.  So, should BoE be charged with containing buy to let housing market, by possibly changing the rules on the loan-to-value (LTV) ratio’s?

So, let’s look at how affordable Tamworth is?  The best measure of the affordability of housing is the ratio of Tamworth Property Prices to Tamworth Average Wages, (the higher the ratio, the less affordable properties are).   (i.e. looking at the table below, for example in 2014, the average value of a Tamworth property was 6.27 times higher than the average annual wage in Tamworth).

1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 (EST)
3.19 3.62 4.62 5.87 6.71 6.21 6.21 6.02 6.27 6.75

Ratio of Tamworth property prices to Tamworth average wages
Ratio of Tamworth property prices to Tamworth average wages

 

 

 

 

 

 

This deterioration in affordability of property in Tamworth over the last couple of years has been one of the reasons why the younger generation is deciding more and more to rent instead of buy their own house.

… but it’s not the only reason.

A quick look on Money Supermarket today found 169 lenders prepared to offer 75% LTV Buy to let Mortgages and none at 85% LTV.  Lenders have self-imposed a high level of entry for buy to let landlords (i.e. putting down at least 25% of the purchase price in cash).  The BoE don’t need to meddle there!  Also, the Tories have certainly done lots to level the playing field in favour of first time buyers.  For nearly a year now, Landlords have had to pay an additional 3% in stamp duty on any buy to let purchase and over the coming four years, tax rules on landlord’s claiming mortgage interest relief will affect their pocket.  Neither, it doesn’t help that the local Authority sold off council houses in the Thatcher years and so for many on low incomes or with little capital, owning a home has simply never been an option (today or in the past).

It’s easy to look at the headlines and blame landlords.  First time buyers have been able to access 95% LTV mortgages since 2010, meaning even today, a first-time buyer could purchase a 2 bed terraced in Tamworth for around £130,000 and only need to find £6,500 deposit.  Yes, a lot of money, but first time buyers need to decide what is important to them.  Either save up for a couple of years to save the deposit and go without two annual foreign holidays, the full Satellite or Cable TV package with Sports and Movies costing three figures a month, the latest mobile phone and out socialising … or not as the case maybe?

I think we as a Country have changed … renting is returning to be the norm.  So my opinion is, landlords have it tough.  Let’s not blame them for the ‘perceived’ woes of the nation … because to be frank … we haven’t always been a country of homeowners.  Roll the clock back to 1964, and nationally, 30% of people rented their home from a private landlord – today – its only 15.3% nationally.

History of tenure in UK - 1918 to today.
History of tenure in UK – 1918 to today.

 

 

 

 

 

 

 

 

If you are an existing landlord or someone thinking of become a first-time landlord looking for advice and opinion and what (or what not to buy in Tamworth), one source of information is the Tamworth Property Blog  www.tamworthpropertyblog.co.uk

Why not join me at the Moathouse, Tamworth for a cuppa and a cosy chat, on the Tamworth property market?

lorraine@hallandthompson.co.uk   or 077531484956

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Ask Lorraine – I’ve become an accidental landlord and the Tamworth property I’ve inherited has a woodburner

🙋  Landlord’s Question: 

”Dear Lorraine,

I’ve become an accidental landlord and the Tamworth property I’ve inherited has a wood burner . Should I get rid of this before I consider renting out this property. In a nutshell what  are responsibilities if I leave the wood burner?

Wood Burner advice
Wood Burner advice

 

Lorraine’s Answer

You must install a  carbon monoxide alarm in the room where the wood burner is situated. Apart from that, currently there is no legislation requiring any specific periodic inspection.
A check should be made at the start of each new tenancy by a competent person, that the appliance is safe to use and has not been tampered with or the flue is not blocked. It’s surprising how many people try to burn plastic bags and other combustible materials.  I’ve been reliably informed  that  burning ‘wet’ wood produces acidic moisture that will condense and corrode the flue.
So the wood used should be from a reputable source rather than collecting cheap old doors and windows that may have been treated with varnish or other sealants.
It also worth noting that the backplate, seals and ropes will need to be checked  on a regular basis, so if you think having a wood burner in a tenanted property is not going to work, then I would recommend having a contractor uninstall the appliance.

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! lorraine@hallandthompson.co.uk or 07531484956

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How The Rented Sector Has Transformed The Property Market In Tamworth

The Tamworth housing market has gone through a sea change in the past  decades with the Buy-to-Let (B-T-L) sector evolving as a key trend, for both Tamworth tenants and Tamworth landlords.

A few weeks ago, the Government released a White Paper on housing. I have had a chance now to digest the report and wish to offer my thoughts on the topic. It was interesting that the private rental sector played a major part in the future plans for housing. This is especially important for our growing Tamworth population

In 1981, the population of Tamworth stood at 65,200 and today it stands at 77,100.

Currently, the private rented (B-T-L) sector accounts for 10.9% of households in the town.  The Government want to assist people living in the houses and help the economy by encouraging the provision of quality homes, in a housing sector that has grown due to worldwide economic forces, pushing home ownership out of the reach of more and more people. Interestingly, when we look at the 1981 figures for homeownership, a different story is told.

55.5% Tamworth people owned their own home in 1981

41.24% Tamworth people rented from the Council or Housing Association in 1981

and 3.27% Tamworth rented from a Private Landlord

The significance of a suitable housing policy is vital to ensure suitable economic activity and create a vibrant place people want to live in. With the population of Tamworth set to grow to 80,000 by 2037 – it is imperative that Tamworth Borough Council and Central Government all work actively together to ensure the residential property market doesn’t hold the area back, by encouraging the building and provision of quality homes for its inhabitants.

Population of Tamworth

Population of Tamworth 1981 – 2037

One idea the Government has proclaimed is a variety of measures aimed at encouraging the Build-to-Rent (B-T-R) sector (instead of the B-T-L sector). These include allowing local authorities to proactively plan for B-T-R schemes, and making it simpler for B-T-R developers to offer inexpensive private rented homes.

To do this, the government will invent a distinct affordable housing class for B-T-R, called ‘Affordable Private Rent’, which will oblige new homes builders to at least 1 in 5 of a new home developments at a 20% discount on open-market rents and three year tenancies for tenants. In return, the new home builders will get better planning assurances.

Private landlords will not be expected to offer discounts, nor offer 3-year tenancies – but it is something Tamworth landlords need to be aware of as there will be greater competition for tenants.

Over the last ten years, home ownership has not been a primary goal for young adults as the world has changed. These youngsters expect ‘on demand’ services from click and collect, Amazon, Dating Apps and TV with the likes of Netflix. Many Tamworth youngsters see that renting more than meets their accommodation needs, as it combines the freedom from a lifetime of property maintenance and financial obligations, making it an attractive lifestyle option.

Private rented housing in Tamworth, be it B-T-L or B-T-R, has the prospective to play a very positive role.

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! lorraine@hallandthompson.co.uk  or 07531484956

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Ask Lorraine – A couple have rented my house and the man who was the only one on the tenancy has done a runner, help

🙋  Landlord’s Question: 

”Dear Lorraine,

I’m a private Tamworth landlord. A couple have been renting my house since 2009 and the man who was the only one named on the tenancy has left the property, help!

I’m too old for this hassle and I’ve decided to sell up. The lady doesn’t hold a contract so can I just tell her to go. He left 3 months ago and she’s been struggling to pay the rent ever since, she has no idea where he’s living.

I'm a Tamworth Landlord
I want my property back

 

Lorraine’s Answer

It sounds as though you have created a verbal tenancy with the lady as you have been accepting her rent. I would suggest serving a section 21 notice giving  at least  2 months notice to quit.

You will need to ensure that the gas safety certification, EPC,  “how to rent guide” is served first, don’t forget to get the ladies signature confirming receipt of said documents.

The section 21 cannot be served during the first four months of a tenancy so you will need to wait another month, at least.

In the meantime try to help the lady find alternative accomodation, after all it’s not her fault that her partner has left her in this mess.

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!

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