February 7th, 2012:

Sale and rent property firms have been forced to close following an investigation by City regulator the Financial Services Authority.

Around 22 firms in the market place have either agreed to stop taking on new business or have stopped trading.

Firms in the sector faced floods of complaints for offering last-chance below market value deals to home owners facing bankruptcy and repossession.

The firms proposed cut-price deals to the home owners, often at 30% less than the market value, while promising to let them stay in their homes as tenants.

In many cases, the home owners who could not afford their debts or mortgages also failed to pay rents and were evicted.

The FSA branded the controversial deals as ‘unsuitable or unaffordable’, while claiming they should never have been sold.

One of the firms is also under investigation for buy to let fraud.

By 2009, at least 50,000 below market value sale and rent back deals were agreed with about 1,000 property investors, claims the FSA.

The market was regulated by the FSA in 2009, and only 60 deals have completed since.

“The FSA has referred one firm to its enforcement division while others have either stopped taking on new business or cancelled their permissions,” the FSA said.

“Effectively, this means the entire sale and rent back market is temporarily shut.”

The FSA said the investigation revealed a massive dossier of complaints, errors and bad practice across the sector.

“The resulting temporary closure of this market could have been avoided if sale and rent back firms had taken the time to fully understand their regulatory responsibilities and customers’ needs,” said the FSA.

“It seems most were more focussed on their own commercial success rather than the welfare of the customers, with one firm even resorting to fraud.”

Sale and rent property firms have been forced to close following an investigation by City regulator the Financial Services Authority.

Around 22 firms in the market place have either agreed to stop taking on new business or have stopped trading.

Firms in the sector faced floods of complaints for offering last-chance below market value deals to home owners facing bankruptcy and repossession.

The firms proposed cut-price deals to the home owners, often at 30% less than the market value, while promising to let them stay in their homes as tenants.

In many cases, the home owners who could not afford their debts or mortgages also failed to pay rents and were evicted.

The FSA branded the controversial deals as ‘unsuitable or unaffordable’, while claiming they should never have been sold.

One of the firms is also under investigation for buy to let fraud.

By 2009, at least 50,000 below market value sale and rent back deals were agreed with about 1,000 property investors, claims the FSA.

The market was regulated by the FSA in 2009, and only 60 deals have completed since.

“The FSA has referred one firm to its enforcement division while others have either stopped taking on new business or cancelled their permissions,” the FSA said.

“Effectively, this means the entire sale and rent back market is temporarily shut.”

The FSA said the investigation revealed a massive dossier of complaints, errors and bad practice across the sector.

“The resulting temporary closure of this market could have been avoided if sale and rent back firms had taken the time to fully understand their regulatory responsibilities and customers’ needs,” said the FSA.

“It seems most were more focussed on their own commercial success rather than the welfare of the customers, with one firm even resorting to fraud.”

Chancellor George Osborne has said he will give powers back to the Bank of England through a new Financial Policy Committee (FPC) to allow them to vary what mortgages clients are able to get in order to prevent another housing bubble.

Unrestricted mortgage lending before the credit crunch, some up to or even over 100% of property values, by banks and building societies, lead to many unsustainable mortgages with some landlords and home owners unable to maintain their payments.

This will probably mean larger deposit amounts needed to buy can be varied according to the state of the property market – if the market starts to boom the deposit required would increase.

The reverse would also be true: when markets slow mortgage packages could be made more attractive and deposit amounts needed for mortgage approvals may be lowered, perhaps to as low as 5 or 10 per cent.

MPs were told as they discussed the second reading of the Financial Services Bill that the new FPC committee (already set-up but not in force until January 2013) would be led by the Governor. Osborne said: ‘Its job is not just to try to moderate a credit boom but to try to alleviate a credit bust,’

Speaking in the debate Osborne said that “light-touch” regulation had led to an ‘unmitigated disaster’ for the economy and the committee would be ‘entrusted with the stability for the whole financial system’.

Specialist provider of Buy-to-Let cover, Total Landlord Insurance, is pleased to announce that they will be sponsoring the inaugural UK Landlord Accreditation Partnership (UK LAP) awards.

The event which takes place on Thursday March 1st 2012, will celebrate the professionalism of London’s landlords and agents. Eleven awards will be given to those landlords, agents and partners who have excelled in their service to the private rented sector.

Steve Barnes, Broking Manager, for Total Landlord Insurance, said:

“We fully support initiatives that improve standards in the private rented sector, and as such wholeheartedly endorse everything that the UK Landlord Accreditation Partnership stands for.

“The UK LAP is not only there to recognise good landlords but also offers support and training to new landlords to ensure that they can build a successful and well run business, and give all of its members access to the latest legislation.

“We are delighted to be a sponsor of such a prestigious event and wish all the nominees the best of luck on the night.”

Two new accreditation programmes will also be launched at the event.

The Green Landlords’ Accreditation Scheme which will train landlords to be more energy and water usage conscious for the sustainability of their businesses, and to the benefit of their tenants and the environment.

The Tenant Accreditation Scheme will also be launched which will advise tenants on how to be responsible residents. The benefits of gaining accreditation will make tenants more knowledgeable as to their rights and responsibilities, and, they will be more desirable to landlords as they will have shown their commitment to being ideal tenants.

Dave Princep, chair of both the London Landlord Accreditation Scheme and the UK Landlord Accreditation Partnership, said: “We are seeking nominations from the capital’s best accredited landlords and agents. The time is right to award professional landlords and agents and to encourage others to follow their excellent examples.

“The launch of the two new accreditation schemes, in addition to the range of Continuous Professional Development courses that UK LAP offers, shows that the UK Landlords Accreditation Partnership is committed to supporting and training private landlords with the many and varied skills required from legal obligations to general duties as a landlord. By supporting landlords the UK LAP enables them to provide good quality housing for their tenants with minimum intervention from the authorities.”

The Future of Housing in the Private Rented Sector will be hosted at

The Thistle Hotel, Edinburgh Suite, Bryanston Street, London W1H 7EH. For more information go to www.llas-conference.org.uk.

For more information on Total Landlord Insurance and our products go to www.totallandlordinsurance.co.uk or call 0800 63 43 880.

Total Landlord Insurance is a trading name of HFIS plc. HFIS plc is authorised and regulated by the Financial Services Authority.

For general information about Total Landlord Insurance visit our web site at www.totallandlordinsurance.co.uk or telephone on 0800 63 43 880

I Just Bought a House to Rent Out. What Next?

Buying a house to let is exciting; but it comes with many responsibilities. From preparation to let, routine home maintenance and renovations to Landlord insurance; there is a lot to think about. Here are some important steps to take after purchasing a house.

1. Landlord Insurance

If you have a mortgage you are required by your lender to carry property insurance. If you do not have a mortgage, Landlord insurance is still essential for financial protection. You have the option to choose any insurance carrier you wish. After you have let your house and your tenants are settled; take the time to compare insurance rates to make sure the policy you are carrying offers adequate coverage at the most affordable price.

Be sure to do this regularly, at least once a year, to make sure you are always getting the best coverage at the best price. Bundling your property insurance with other policies like block policies and auto insurance is one way to save. Insurance companies sometimes offer multi-policy discounts. Having a monitored alarm system and other security measures installed is another way to get a discount.

2. Maintenance

There might be some work that needs to be done to your new house, or it might be move in ready. Just keep in mind that even after any initial work you complete when you first buy your house, a house will continue to require regular maintenance to provide a safe environment for your tenants and retain its value.

Even if your home does not currently need any work done to it, plan to set aside money each month to cover maintenance issues that come up. You will find a range of recommendations for how much to set aside for home maintenance; but it will depend in part on personal factors like the age and condition of your buy-to-let and the cost of living. You will probably want to set aside somewhere between one and four percent of the house’s value per year to be used for maintenance. One year you might not spend anything, another year you might be faced with a costly roof replacement.

3. Organise

You will be left with a ton of paperwork following the purchase of your house. It is important to file this properly as you will need it again for tax purposes when you sell. Take the time during lettings to organize all of the important paperwork like insurance documents, warranties and loan documents. Also be sure to keep and know where to find all of the manuals for your appliances; whether they were already in the home or you purchased them during move in – do copies of these for tenants.

Knowing where all of this information is can save you time and money. Warranty documents will help you to know when a repair is covered and what exactly is covered. Appliance manuals are important for making sure your tenants are operating appliances properly and maintaining them to help them last as long as possible – you could be liable if there is an accident and you have not supplied tenants with operating instructions.

4. Find Resources

Even if you do not currently have any issues in your house that need to be fixed; chances are there will come a time when you need services like a plumber, electrician, heating or air conditioning repair, landscaping and other services.

Talk to local friends and neighbours and check reviews to find reliable service providers in the area, and make a list for you to keep in a convenient place. Landlords should try to develop contacts for tradesmen they can call on in an emergency. Sometimes it’s more important to get someone quickly than having the cheapest service, so pay them quickly and well and they will always give you good service. This will save time and stress when you are in need of a home repair or service.

From searching for a house investment, securing a mortgage, going through the closing process and moving your tenants into your new house; buying a house is a time consuming, sometimes stressful, but worthwhile experience.

Make sure to take the time after things settle down to get organized and take important steps to protect your large investment. These simple steps can save you time, money and frustration over time.

I Just Bought a House to Rent Out. What Next?

Buying a house to let is exciting; but it comes with many responsibilities. From preparation to let, routine home maintenance and renovations to Landlord insurance; there is a lot to think about. Here are some important steps to take after purchasing a house.

1. Landlord Insurance

If you have a mortgage you are required by your lender to carry property insurance. If you do not have a mortgage, Landlord insurance is still essential for financial protection. You have the option to choose any insurance carrier you wish. After you have let your house and your tenants are settled; take the time to compare insurance rates to make sure the policy you are carrying offers adequate coverage at the most affordable price.

Be sure to do this regularly, at least once a year, to make sure you are always getting the best coverage at the best price. Bundling your property insurance with other policies like block policies and auto insurance is one way to save. Insurance companies sometimes offer multi-policy discounts. Having a monitored alarm system and other security measures installed is another way to get a discount.

2. Maintenance

There might be some work that needs to be done to your new house, or it might be move in ready. Just keep in mind that even after any initial work you complete when you first buy your house, a house will continue to require regular maintenance to provide a safe environment for your tenants and retain its value.

Even if your home does not currently need any work done to it, plan to set aside money each month to cover maintenance issues that come up. You will find a range of recommendations for how much to set aside for home maintenance; but it will depend in part on personal factors like the age and condition of your buy-to-let and the cost of living. You will probably want to set aside somewhere between one and four percent of the house’s value per year to be used for maintenance. One year you might not spend anything, another year you might be faced with a costly roof replacement.

3. Organise

You will be left with a ton of paperwork following the purchase of your house. It is important to file this properly as you will need it again for tax purposes when you sell. Take the time during lettings to organize all of the important paperwork like insurance documents, warranties and loan documents. Also be sure to keep and know where to find all of the manuals for your appliances; whether they were already in the home or you purchased them during move in – do copies of these for tenants.

Knowing where all of this information is can save you time and money. Warranty documents will help you to know when a repair is covered and what exactly is covered. Appliance manuals are important for making sure your tenants are operating appliances properly and maintaining them to help them last as long as possible – you could be liable if there is an accident and you have not supplied tenants with operating instructions.

4. Find Resources

Even if you do not currently have any issues in your house that need to be fixed; chances are there will come a time when you need services like a plumber, electrician, heating or air conditioning repair, landscaping and other services.

Talk to local friends and neighbours and check reviews to find reliable service providers in the area, and make a list for you to keep in a convenient place. Landlords should try to develop contacts for tradesmen they can call on in an emergency. Sometimes it’s more important to get someone quickly than having the cheapest service, so pay them quickly and well and they will always give you good service. This will save time and stress when you are in need of a home repair or service.

From searching for a house investment, securing a mortgage, going through the closing process and moving your tenants into your new house; buying a house is a time consuming, sometimes stressful, but worthwhile experience.

Make sure to take the time after things settle down to get organized and take important steps to protect your large investment. These simple steps can save you time, money and frustration over time.