News

Thousands of landlords with buy to let properties in Wales will be forced to sign up for a new buy-to-let licensing scheme before they can rent out a home.

The new reform applies to every landlord letting property in Wales, regardless of where they live.

Buy to let and house in multiple occupation landlords will have to show they are ‘fit and proper’ to hold a licence and must not rent out a home until they have successfully registered.

Once registered, the landlord must follow a code of practise aimed at improving living standards.

The proposal is included in a housing white paper launched by the Labour-controlled Welsh Assembly Government.

Housing minister Huw Lewis said: “This is about much more than putting a roof over someone’s head. Housing issues affects people’s health and wellbeing and their ability to find and keep a job.

“For children, it is the foundation for the rest of their lives. Housing is fundamental to delivering many of our goals as a progressive government.

“This paper reflects our strong commitment to equality and social justice and our desire to do all we can to help people to meet their housing needs. We will be ambitious, innovative and collaborative to deliver real change to help reduce poverty, tackle the inequalities that exist between some of our communities, increase skills and jobs, tackle climate change and help improve health and well-being.”

The code of practise will also be applied to letting and management agents across Wales.

“Some people have to endure poor conditions, insecurity and, sometimes, threats of eviction,” said the white paper.

“The latter, combined with the lack of other options, means that many people, often vulnerable people, put up with the questionable practices of some landlords and lettings and management agents.”

“Accreditation will secure full registration status, which is effectively a licence to operate as a private landlord in Wales.

“Failure to do so could result in penalties or other sanctions, proportionate to the failings in compliance. Codes of practice will be developed for landlords and agents.”

Camelot are hosting a Free one-day conference to help property managers protect and generate income from empty properties – 26 June 2012

With hundreds of thousands of properties lying empty across the UK, Camelot Europe, is hosting its annual Vacant Property Conference in London on 26 June 2012, to tackle the challenges faced by property owners, investors and administrators in protecting, managing and generating income from vacant property.

The free conference organised by Camelot Europe, the UK’s vacant property specialists, will take place from 10am-4.30pm at One Drummond Gate, Victoria, London.

Bringing together key experts from the UK’s property management industry, guest speakers will include Wayne Eldridge, CEO of One Life UK, Mark Higgin, head of rating at Montagu Evans and Will Palin from SAVE Britain’s Heritage – discussing topics such as how to save 80% on empty property rates, and successful property strategies.

Rosemarie Hammond from Camelot Europe will provide guidance on how to generate income from vacant commercial property, and John Mills, chief operating officer, will provide a unique insight in vacant property management gained from Camelot Europe’s 10 years experience in the industry.

John Mills, Camelot Europe’s COO, said: “Empty properties are a huge problem. Not only are they at risk of metal theft, vandalism, squatters and dilapidation, vacant properties also reduce in value, cost a lot to maintain, and are also a blight on the environment – often causing a destructive and destabilising effect on the community. This conference is designed to provide people with the tools and knowhow to employ the very best vacant property strategies to tackle these very real issues.”

Camelot Europe will also present its Vacant Property Management Award 2012 – donating £2000 to an empty property cause of the winner’s choice. The award aims to recognise and celebrate the social successes of innovative vacant property management. Nominations are now being accepted and the announcement will take place at the conference on the 26 June.

John Mills, concludes: “This conference presents a great opportunity to network and meet face-to-face with the UK’s very best vacant property experts, to find out how to implement cost effective and socially responsible empty property strategies that not only protect property, but enable vacant property to be put back to use, and generate revenue.”

To find out more about the Vacant Property Conference 2012 and to register for free, click here

When: 26 June 2012, 10am-4.30pm with refreshments and lunch provided

Where: One Drummond Gate, Victoria, London

Who: Owners, investors and administrators of vacant property

Register for FREE: Cameloteurope.com/conference

Camelot Europe has been the innovative market leader in Europe for the protection of vacant properties since 1993. Camelot protects vacant real estate, commercial, industrial and residential properties from vandalism, theft of contents and fittings, fly-tipping, squatting and dilapidation with our unique ‘Live-in Guardian’ system of property protection. Additionally, we can provide 24hr security guards, security patrols, boarding, facility management, key holding, maintenance, cleaning, gardening, building clear outs, and a squatter eviction service. You may wish to hand over all property management, share management with Camelot or make use of individual services. The Camelot Solution can be in place within 48 hours!

A buy to let property firm made misleading claims about investing as a landlord in a radio ad, according to a ruling by the Advertising Standards Authority.

Aldermartin Baines and Cuthbert (ABC Estates), of Bushey Heath, Hertfordshire, was banned from running the ad again and must broadcast unregulated property investment ads through specialist financial media.

The ASA delivered a verdict on the advert broadcast on local radio in January after three complaints.

The advert said: “The bank may be the safest place for your money, but Aldermartin Baines and Cuthbert estate agents would argue that it’s not the most sensible place.

“If you have cash on deposit in the bank, you may be getting only half a per cent interest on your money and inflation will be working against you by eroding your savings. So, what’s the alternative?

“Here at ABC Estates we’d like to suggest investing in property, good old bricks and mortar. Put your savings in a buy-to-let investment instead and you could generate a five per cent return on your investment, maybe more. Inflation would then actually work for you by eroding the value of your mortgage debt.”

The ASA disagreed and felt the adverts understated the risks involved in buy to let investment.

“We considered the ad misleadingly presented buy-to-let investment as low risk, in that it suggested it was an alternative, or a preferable option, to saving and did not make clear the potential risks associated with such an investment,” said the ASA.

“Ads for investments not regulated or permitted under the Financial Services and Markets Act 2000 (FSMA) may be broadcast on specialised financial channels, stations or programming only. Buy-to-let is not regulated under FSMA but considered the ad, which appeared on a non-specialist channel and emphasised an investment opportunity, promoted an investment. Because the ad promoted an investment not regulated by FSMA, we considered it should not have been broadcast on a non-specialist channel, regardless of whether or not it made clear the potential risks involved in buy-to-let investment.”

Aldermartin Baines & Cuthbert claimed they offered properties yielding between 7% and 12%, but had been advised a 5% yield made a better claim in the advert.

“We do not accept the ad misleadingly presented buy-to-let as a low risk investment. The ad did not mention ‘low risk’ but focused on inflation eroding the value of money, either on deposit or as the debt of a mortgage. This was obvious and would not mislead to anyone. The investments were low risk, because they gave an independent insurance backed rent guarantee,” the ASA was told.

“If a deal was considered risky, banks would not lend on it particularly in the current economic climate.”

Low yields and too few quality homes to buy are the biggest barriers to institutional investors entering buy to let, according to new research.

Fund managers perceive residential buy to let yields are an average 20% less than those offered by commercial property and the business model of low income and capital appreciation reverses the returns they seek.

The seven leading banks and funds approached by property firm Hamptons International also felt that a minimum £500 million investment would be needed to make any residential fund work and doubted the 2,500 or so quality properties required for a portfolio are not available.

The largest recent property deal was a 574 home portfolio that changed hands for £75 million.

The report concludes build-to-let is the likely solution to encourage insitutional investors in to the UK buy to let market.

“Build to Let will allow 100% private rented blocks to be built efficiently and at scale, offering higher net yields as well as the ability to acquire a large number of units in a single transaction,” said the report.

The report also urges the government to promote make the planning process easier for large build to let projects – and to especially look at the demand from local councils for developers to include low-cost social housing in their developments.

Adam Challis, head of research at Hamptons International, said: “This report offers a fascinating insight in to the challenges faced by institutions who are considering investment in the residential property sector, a topic which has long been a focus of the government.

“The results of this report are a clear message to government that if it wants to see institutions invest in the residential market, it needs to make build to let a viable option for investors.  The ability to create modern, efficient and bespoke private rented buildings constructed at scale without the burden of restricted planning policies will have a fundamental and positive impact on institutional investment in residential property.”

With so many favourable articles of late proclaiming the positive merits of investing in buy to let properties, a novice landlord might be forgiven for thinking that owning a rental property is an easy way to make cash.

But the reality is somewhat different—the potential for earning a healthy profit is almost certainly there, but there are also many pitfalls on the road to becoming a successful landlord. So before you acquire a massive headache, learn how to avoid common landlord mistakes:

1. If you know nothing about letting property, consider paying a professional letting agency to manage your property. The fees will bite into your profit margin but in the event of any problems, they are first in the firing line.

2. Never make the mistake of assuming a bad tenant is better than no tenant—an empty property might be highly undesirable, especially if rental payments are required to cover a mortgage, but a bad tenant could end up costing you thousands in damages, plus they may run up huge rent arrears and then abscond.

3. On a similar note, ALWAYS check references thoroughly. Just because a tenant appears to be nice and respectable, it does not automatically mean they ARE nice and respectable!

4. If your property is subject to a mortgage, ensure the lender is aware you are letting it—this is a common mistake people make when letting their home for periods of time. A failure to do so could invalidate any insurance policy you have on the property.

5. Do not be tempted to cut corners on landlord insurance—a good policy might prove to be essential if you fall victim to #2 on our list.

6. Always ask for a decent deposit to cover the cost of potential damage to the property—expensive cleaning and repair bills at the end of a tenancy are a big problem for many landlords.

7. Overdue rent is a very common issue faced by landlords, so make sure you have a clear tenancy agreement drawn up with the rent due date highlighted to avoid confusion. If a rent payment is late, take immediate action to resolve the problem.

This article has been provided by Amer Siddiq from PropertyPortfolioSoftware.co.uk They provide award winning property management software to help landlords get better organised.

A leading company in building links between the private-rented sector and local government are launching a range of new products which change the way landlords, tenants and local authorities work together.

“Our aim is create a framework that prevents homelessness, builds sustainable tenancies, and reduces the financial burden carried by government, both locally and nationally”, said Alan Elborough, Co-Director and Founder of Settled Housing Solutions. “At the moment we see homelessness up by 14% according to the latest Department of Communities and Local Government figures. The use of bed and breakfast accommodation by local authorities has grown by 37% over the previous year.

The government has allocated £400 million for homelessness in the current Spending Review period. The private-rented sector is providing more and more accommodation and local authorities are straining under the growing number of people who find themselves without a home or on housing benefit. What we have set out to do is to bring all the various elements together, landlords, tenants, and local authorities so as to produce a system that is coherent and works well at the front-line of housing need”.

The first product is Settled Sure. This is a unique insurance scheme to cover housing benefit. Its aim is to tackle the growing concerns of landlords have on providing accommodation for housing benefit tenants by providing an insurance safety net for landlords which protects their income. That helps tenants by releasing properties in the private-rented sector that might not otherwise be available to them. It assists local authorities in tackling homelessness by helping potential tenants into accommodation. A key element is that the insurance premiums would be based on local rental market levels.

Settled Tenant addresses those barriers that hamper landlords working with local authorities on housing tenants on lower incomes. Using an interactive workshop format, it helps and trains tenants to consider and recognise their responsibilities within a tenancy and as part of their local community. It encourages them to plan and budget and thus can be used as a form of tenant accreditation.

This should help create an environment where landlords have the confidence to negotiate longer tenancies which give security both to them and their tenants. Local authorities gain as fears about the growth of transient populations in some of their areas should be eased and the cost of intervention in tenant-related matters should fall.

Settled Agency is a scheme that works to professionalise local authority lettings-services by training, advice and IT software in conjunction with the Guild of Letting and Management Ltd and IT PROz. This should lead to the development of a ‘Social Letting Agency’ Model that brings local authorities and their local landlords into a more professional relationship. By going this route, rather than the traditional regulatory path, standards could be raised across the sector.

Alan Elborough went on to say, “We believe that these new products could iron out a number of the problems that bedevil the private-rented sector. Taken as a whole package they could build longer and more stable tenancies which is in the interest of both landlord and tenant. For local authorities they will save money by removing some people from the revolving door they face now, going from homelessness to hostel to short-term tenancy and then possibly round again. It helps change the role of local authorities from being enforcers into partners engaging with their local landlord which chimes in the Government’s Localism Act and welfare reforms. We believe that this package offers practical solutions for the problems facing the private-rented sector now”.

Settled Housing Solutions are the leading practitioners in building successful partnerships between the private rented sector and front-line local government services. The primary aim of their service is to harness the potential of the private rented sector market so it can play an important role in providing affordable housing for those on low incomes.

The bewildering complexity of self-regulated consumer protection offered to landlords seems to simply comes down to professional jealousy.

Landlords could be forgiven for thinking that the power-that-be at the august Association of Residential Letting Agents (ARLA) extended their concerns about rip off rogue agents beyond a turf war.

The cat was let out of the bag by ARLA president Tim Hyatt who candidly explained that his organisation could not work with rivals SafeAgent because a competitor administrated the scheme.

That competitor is the National Approved Letting Scheme (NALS).

SafeAgent chairman John Midgley immediately grabbed the moral higher ground from ARLA with a conciliatory statement.

“The suggestion that we change the way we are administered could prove very expensive, but would also have the risk that we become just another trade body. That is not our aim,” he said.

“SafeAgent is not about allegiance to any of the existing bodies. We are an independent body and here to inform members of the public. We have no plans to remove NALS. Our view is that it is irrelevant who administers the scheme.”

The Safeagent scheme has mushroomed to several thousand members in a short time. Backers include the government, National Union of Students, Shelter, Citizens Advice and the Residential Landlords Association.

At stake is landlord and tenant money collected and held in trust by letting agents. Client money protection stops landlords shutting up shop and disappearing with cash either through poor business management or dishonesty.

The latest unprotected firm to crash has debts of more than £410,000 in unpaid rents to landlords. Liquidators have told landlords they are unlikely to see a penny of their cash.

Hyatt is about to give up at the helm of ARLA and has one big regret – that the organisation does not have an elevator pitch to sell their letting agency licensing scheme that simplifies their service for the public.

Buy to let mortgage lending was down 5% in the first quarter of the year to £3.7 billion, according to the latest figures from the Council of Mortgage Lenders (CML).

Despite the bluster talking up the market from parties with a financial interest, buy to let is failing to make as much headway as the pundits suggest.

Confidence surveys from Paragon Mortgages and the Association of Residential Letting Agents suggest landlords want to spend on enlarging their property holdings, but these seem unfulfilled hopes held back by lending restrictions rather than completed deals.

The underlying data shows that despite 32,300 new buy to let mortgages agreed so far in 2012, lending is still more than 60% down on the peak years of 2006-07 with borrowing to buy rental properties 9% down and remortgaging 1% down on the last quarter of 2011.

However, the CML does indicate lending in 2012 is up around 30% in comparison to the first quarter of 2011. Buy-to-let mortgages total just over 1.4 million, with a total value of £159.4 billion.

Banks and building societies are shifting their focus slowly away from owner-occupier mortgages to buy to let. Market share has slowly grown from 12.2% 12 months ago to 12.8% in 2012.

CML director general Paul Smee said: “Even though buy-to-let lending is running at only around a third of its peak levels, the sector is continuing its gradual expansion. It has become an important part of the overall landscape of housing provision in the UK.”

Typical buy to let mortgages were at 75% loan-to-value with 125% rent cover – criteria that have remained unchanged for around three years.

Around 1,700 rental properties were repossessed in the quarter (0.12%), while around 23,500 buy to let mortgages are in arrears of three months or more (1.7%).

1. Landlords will be made liable for the unpaid water bills left behind by their tenants unless they give the water company details of the tenants, including their full name, date of birth, and the date the tenancy began—all of which is information landlords should have anyway.
2. The second option is a more ‘softly softly’ approach and landlords will be asked to provide the same information, but voluntarily.

How can I protect myself from a tenant’s debts?

The best way to cover your back is to take meter readings (where applicable) at the beginning and end of a tenancy and ask your tenant to sign a form agreeing the readings are correct. You should also inform all utility companies of any changes in tenant as a matter of course, as this makes it easier for the water companies to target the right debtors.

This article has been supplied to LandlordZONE by Amer Siddiq from PropertyPortfolioSoftware.co.uk. They provide award winning property management software to help landlords get better organised.

1. Landlords will be made liable for the unpaid water bills left behind by their tenants unless they give the water company details of the tenants, including their full name, date of birth, and the date the tenancy began—all of which is information landlords should have anyway.
2. The second option is a more ‘softly softly’ approach and landlords will be asked to provide the same information, but voluntarily.

How can I protect myself from a tenant’s debts?

The best way to cover your back is to take meter readings (where applicable) at the beginning and end of a tenancy and ask your tenant to sign a form agreeing the readings are correct. You should also inform all utility companies of any changes in tenant as a matter of course, as this makes it easier for the water companies to target the right debtors.

This article has been supplied to LandlordZONE by Amer Siddiq from PropertyPortfolioSoftware.co.uk. They provide award winning property management software to help landlords get better organised.

European politicians are trying to thrash out an agreement to regulate mortgages have missed another key milestone.

The vote on the progress of the mortgage directive was cancelled for the fourth time today by the European Parliament’s economic and monetary affairs committee (ECON) – and has been pushed back to May 14.

The vote was originally set for December.

The most likely hold-up is horse-trading between the committee members to resolve a final text for the directive.

The directive aims to impose a pan-European mortgage regime to increase consumer protection and tighten up lending criteria.

On of the main issues for the UK is buy to let mortgage regulation.

The directive does not differentiate between standard residential mortgages and investment mortgages and lenders in the UK fear buy to let loans will disappear unless an exemption is introduced in to the new rules.

If the directive comes in to force without the exemption, buy to let loans will face the same underwriting rules as standard home loans – including limiting borrowing within the landlord’s income rather than basing loans on rental income.

Most countries are unaffected by the buy to let issue as they either have no property investment market or offer buy to let as commercial lending.

“I do not know the precise cause of the delay,” said an ECON spokesman. “They usually occur because the groups do not have enough time to establish strong compromises, so they are still working on finalising the changes to the commission’s text.”

The Council of Mortgage Lenders, the UK’s trade body for banks and building societies, has lobbied against the directive for months, claiming the legislation is unnecessary and too expensive to implement in the UK.

The CML has also issued a ‘hands off’ warning over buy to let to the European Parliament.

Grand Designs Live, London ExCeL, One Western Gateway, Royal Victoria Dock, London E16 1XL Saturday 5th May – Saturday 12th May 10am-6pm Sunday 13th May 10am-5pm

Grand Designs Live, London ExCeL, One Western Gateway, Royal Victoria Dock, London E16 1XL Saturday 5th May – Saturday 12th May 10am-6pm Sunday 13th May 10am-5pm

Greenbuild Expo 2012, Manchester Central, Petersfield, Manchester M2 3GX 9th & 10th May 09:30-16:00
Sustainable refurbushment and building event

Greenbuild Expo 2012, Manchester Central, Petersfield, Manchester M2 3GX 9th & 10th May 09:30-16:00
Sustainable refurbushment and building event

Commercial property values have plunged in to the deepest decline recorded, according to new research.
Loan-to-values are also balancing at a crucial point as an 80% loan-to-value (LTV) mortgage taken out on a secondary property in 2007 is now 143% LTV borrowing.

Commercial prices were down 0.7% in the first three months of 2012, marking a second successive quarter of falls.

Values are now 31% below 2007 levels, which leaves many property investors in financial uncertainty as those seeking to refinance are now in negative equity, says the Investment Property Databank.

IPD reckons commercial investors have secured £300 billion of debt to their property and £114 billion is in a dead zone for refinancing on current terms and that 40% of all borrowing is at 80% LTV or more.

Analysts at IPD said this downturn is twice as bad as the last in the early 1990s. Then, five years after the initial crash, which is where the UK is in the current cycle, values had recovered to within 15% of pre-crash levels.

The decline is worse for the rest of the UK when London is excluded from the data. Without the capital’s more buoyant market, values have fallen by 1.8% across three quarters in a row.

The gap between prime and secondary property values is similar as have fallen by 6.1% in the past  six consecutive quarters to the widest margin between the two since the early 1990s.

Malcolm Frodsham, IPD research director said “The UK has fallen back into a technical recession largely due to a lack of business demand and a construction slump. As property values continue to decline, investors are unlikely to want to develop, which will lead to further pain.

“Regulators need to avoid any actions that will amplify the cycle further. Increasing bank and insurance company capital requirements at this point in the cycle for example will only further depress prices, which in turn creates adverse outcomes for other institutions holding real estate assets and further contraction in economic activity in the sector.”

Buy to let mortgage lenders are shaking up the market as they ready for the forthcoming rules to tighten up the criteria for borrowers.

The Co-Op Bank has confirmed that landlords can still opt for interest-only loans even though the lender has scrapped them for residential borrowers.

Platform – the Co-Op’s buy to let subsidiary – will offer interest only mortgages for buying and refinancing to landlords, said a spokesman, but has pulled all deals for homeowners through the Co-Op, Platform and Britannia.

As an indicator of how banks and building societies are viewing buy to let when the rules change, the Co-Op explained that buy to let is viewed as a business with rents underwriting interest payments and increasing property values in the long-term accepted as a repayment vehicle.

Lloyds Bank has also changed lending policy – interest only loans were withdrawn for residential buyers some weeks ago, but remain in place for landlords.

The latest move is to reduce loan exposure by cutting mortgage lending by 3% – and this could spell problems for property investors as Lloyds is one of the leading buy to let lenders via subsidiary BM Solutions.

The bank says borrowing costs on wholesale money markets are too high, so is reining in fund raising.

Instead, Lloyds wants to raise more cash from savers to underwrite lending – and wants to raise deposits by 3% .

Another big player in the buy to let market, The Mortgage Works (TMW), owned by The Nationwide, has added some new mortgages for landlords.

TMW’s has added three  new two-year fixed rates for mortgages and remortgages:

• 3.39% up to 60% loan to value (LTV)  with a 3.5% arrangement fee

• 4.99% up to 75% LTV with a 1.5% fee

• 4.99% up to 80% LTV with a 3.5% fee.

Interest rates on current two-year buy to let deals are also trimmed by up to 0.25% on loans to 75% LTV.

Tracie Pearce, head of group mortgages at Nationwide, said: “These improved rates are great news for landlords looking for a new purchase or remortgage deal. Our new two-year fixed rates start from just 3.39%, helping to maximise landlords’ monthly income.

“We regularly review our mortgages to ensure their relevance and competitiveness in the market and these changes are a further example of that.”

AFS AND UNIPOL Run to Landlord Accreditation Roadshow in 8 University Towns around the UK

Landlords invited to hear about benefits of AFS/Unipol Code

(London, 3/5/12) Accommodation for Students (AFS) (www.accommodationforstudents.com), the UK’s No 1 student accommodation website, and Unipol (www.unipol.org.uk), the charity devoted to educational advancement via the provision and improvement of student accommodation, are following up the launch in September last year of their student landlord accreditation scheme, the AFS/Unipol Code, with a roadshow inviting student landlords in 8 university towns to hear about the benefits of being accredited.

The roadshow starts in York on May, 8th, followed by Liverpool two days later. Dates in May have also been set for Cardiff (18th), Exeter (23rd), Edinburgh (25th) and Hull (29th), with Bristol and Brighton still to be finalized. Representatives from both parties, AFS and Unipol, will give presentations to local student landlords and take questions about the Code.

Simon Thompson, co-founder and director of AFS, said:

“Since our launch last September we already have over 200 private student landlords seeking accreditation, and over 24,000 bed spaces in accredited accommodation. In addition, we want to take our message to the landlords in their own areas, hence this roadshow, initially in 8 cities across the UK.

By providing service standards that cover all key areas of student accommodation the AFS/Unipol Code provides peace of mind to students and parents. Accredited landlords, identified by our ‘thumbs up’ logo on the website, will be preferred by our customers. The roadshow will also explain all the other elements of the scheme that are beneficial to them.

Two recent landlord forums that we have run have shown a great enthusiasm for this initiative, 60% believing it a good idea.”

Martin Blakey, Chief Executive of Unipol, said:

“The Code sets a number of specific professional standards for rented student properties and their management. It covers all the key areas of student accommodation: comfort, facilities, safety, security and service and is designed to help students (and their parents) make a more informed choice about accommodation and its quality.

Most importantly and uniquely, these standards are physically checked by visits from our team of independent professional assessors, as part of the initial application, and three-yearly thereafter, when membership comes up for renewal.

We have chosen to partner AFS because, as the No 1 student accommodation website, they will provide the widest access to landlords across the UK.”

Blakey and Thompson were both guest speakers at the recent ANUK (Accreditation Network UK, the body for accreditation schemes in the UK) Conference in London on 17th April, where the Office of the Mayor of London was represented, Boris Johnson, having recently stated his intention to introduce a London Rental Standard, to accredit private landlords in London. The AFS/Unipol Scheme is also partnered by the NUS who will promote the scheme to its student members.

With the Olympics fast approaching many individuals have decided to rent out their property and take advantage of what has been termed the “Olympic gold rush”.

Those thinking about renting out their homes have two options: pay an agent specialising in short term lets and pay the 10-15% commission charge or do it yourself.

For those who decide to go it alone this fact sheet is a must read, going through all the factors you will have to think about.

INVENTORY
An inventory detailing a list of furniture and equipment provided with the property and recording the condition of the property should be drawn up. For extra security take pictures to verify condition. Having an inventory can help resolve any disputes at the end of the let if you consider a property has been damaged or items are missing.

LOCK UP VALUABLES
It would be a good idea to place all items of value and sentiment in a lockable cupboard or put them into storage.

MORTGAGE AGREEMENT
Most likely you will not have a buy-to-let mortgage. If you are planning to rent out your property (even for a short term let) be sure to check with your bank that your mortgage agreement allows you to do this without incurring a charge.

LIVING IN A BLOCK
If your property is on a complex or in a block you would do well to check that your lease allows short term lets. You may need to notify the landlord/managing agents to get written consent.

LETTING CONTRACT
This may seem obvious but it is important that such agreements are put in writing setting out the dates, price agreed, payment dates, deposit amount and in what circumstances the deposit will be retained.

GAS & ELECTRIC CHECKS
You will need to ensure that your home is safe and complies with all gas and electric regulations. It would be a good idea to have a gas safety check before your tenants arrive, just to make sure everything is in good working order. You should also go round making sure that all appliances are in good working order.

INSURANCE
You should check with your insurers that you do not need any additional cover for the duration of the letting period. Most household policies do not cover commercial rents.

Our Property department at Osbornes Solicitors would be happy to provide you with more assistance in making sure you have taken all appropriate measures to ensure you are ready for the games. We can also draw up a short-term letting contract on your behalf. For more advice please contact us.

OSBORNES SOLICITORS | LIVERY HOUSE | 9 PRATT STEET | CAMDEN | NW1 0AE
www.osbornes.net | 020 7485 8811 | enquiries@osbornes.net

This article is provided for information only and should not in any way be regarded as the giving of legal advice.

Guy Osborn, Partner
guyosborn@osbornes.net

Shilpa Mathuradas, Partner
shilpamathuradas@osbornes.net

With the Olympics fast approaching many individuals have decided to rent out their property and take advantage of what has been termed the “Olympic gold rush”.

Those thinking about renting out their homes have two options: pay an agent specialising in short term lets and pay the 10-15% commission charge or do it yourself.

For those who decide to go it alone this fact sheet is a must read, going through all the factors you will have to think about.

INVENTORY
An inventory detailing a list of furniture and equipment provided with the property and recording the condition of the property should be drawn up. For extra security take pictures to verify condition. Having an inventory can help resolve any disputes at the end of the let if you consider a property has been damaged or items are missing.

LOCK UP VALUABLES
It would be a good idea to place all items of value and sentiment in a lockable cupboard or put them into storage.

MORTGAGE AGREEMENT
Most likely you will not have a buy-to-let mortgage. If you are planning to rent out your property (even for a short term let) be sure to check with your bank that your mortgage agreement allows you to do this without incurring a charge.

LIVING IN A BLOCK
If your property is on a complex or in a block you would do well to check that your lease allows short term lets. You may need to notify the landlord/managing agents to get written consent.

LETTING CONTRACT
This may seem obvious but it is important that such agreements are put in writing setting out the dates, price agreed, payment dates, deposit amount and in what circumstances the deposit will be retained.

GAS & ELECTRIC CHECKS
You will need to ensure that your home is safe and complies with all gas and electric regulations. It would be a good idea to have a gas safety check before your tenants arrive, just to make sure everything is in good working order. You should also go round making sure that all appliances are in good working order.

INSURANCE
You should check with your insurers that you do not need any additional cover for the duration of the letting period. Most household policies do not cover commercial rents.

Our Property department at Osbornes Solicitors would be happy to provide you with more assistance in making sure you have taken all appropriate measures to ensure you are ready for the games. We can also draw up a short-term letting contract on your behalf. For more advice please contact us.

OSBORNES SOLICITORS | LIVERY HOUSE | 9 PRATT STEET | CAMDEN | NW1 0AE
www.osbornes.net | 020 7485 8811 | enquiries@osbornes.net

This article is provided for information only and should not in any way be regarded as the giving of legal advice.

Guy Osborn, Partner
guyosborn@osbornes.net

Shilpa Mathuradas, Partner
shilpamathuradas@osbornes.net

Mortgage lenders have waded in to the row over flood insurance for homes raging between the government and insurance firms.

Hopes for a quick resolution of the argument are sinking for landlords and lenders as time runs out for insurers and ministers to reach an agreement.

Insurers have threatened to pull the plug on home cover from July 2012 if the government fails to renew a pledge to fund flood defences in at risk areas.

Spending on protection has been cut as part of the government’s austerity measures to save money.

As huge areas of England are swamped with floods from heavy rains in April – the bank and building society trade body the Council of Mortgage Lenders is warning many that millions of homes could become unmortgageable.

The current ‘statement of principles’ between insurers and the government ends in June 2013, but landlords with homes in areas at risk from floods could pay more or lose cover from July, as new policies will cover the date the agreement ends.

“In the absence of a clear direction from the government, it is difficult to ascertain what the flood insurance market will look like, how many households will be affected and to what extent,” said a CML spokesman.

“This week, we have therefore written to the under-secretary of state for the environment, Richard Benyon, emphasising that the continued availability and affordability of insurance is a key factor in ensuring a stable housing market in areas where there is a higher risk of flooding.

“Lenders need to analyse their existing stock of loans and how mortgages may be affected by the unavailability or unaffordability of flooding insurance. If borrowers are unable to get cover, they risk breaching the terms and conditions of their mortgage and may find they are unable to refinance.

“A prospective purchaser of the property may also be unable to obtain finance. Even if insurance is available, high premiums or excesses could compromise the affordability of the mortgage or of repairs to the property.”

Business tenants and corporate landlords can find common ground, says Simon Murphy, property management partner at leading law firm Taylor Vinters

Whether a retailer, an e-retailer or a MegaBox store – space has got to be rented somewhere and business is tough right now. If you are struggling to make the rent, orders are slipping and you’re not sure you are going to make your next payroll, then it’s time to ask:

What kind of help can you get from your landlord?

Many retailers are facing the pinch, with Game the latest in a long line of high street chains to go into administration. Landlords can sometimes help to prevent their tenants descending into administration if they are prepared to accommodate some realistic requests from the tenant, so as to keep their investment values and occupancy levels up.

The landlord may be prepared to re-gear the lease, if rent levels have fallen. If done on the basis of an exchange of side letters (i.e. on a personal basis for the current tenant) so that there is no effect on rent review, then this is sometimes an easier pill to swallow for the landlord.

Landlords can be more flexible with tenants concerning improvement works. Where there is an internal only lease with a service charge, significant capital works can be delayed so that payments required of the tenant can be kept to a minimum.

Where underletting of part is prohibited by the lease, but the tenant does not require all of the space, landlords can be persuaded to be more flexible. This works provided that any underletting is excluded from the security of tenure provisions of the landlord and Tenant Act – so that the landlord doesn’t end up with an undesirable tenant at the end of the lease.

If you’re having trouble persuading your landlord to agree to re-gear, it may be appropriate to offer personal guarantees or a rent deposit if you can stretch to it, so that the landlord has some security in relation to the reduced rent. There is simply no point in the Landlord agreeing to a reduced rent from a tenant who does not have the ability to even pay the reduced rent.

The key to all negotiations, as one would expect, is reasonableness. Although landlords (but probably not landlords in Cambridge) are likely to be prepared to be flexible in order to keep their tenants, they are not likely to want to affect their investment value, unless there is some likelihood that the reduced rent will be paid, and that the tenant will remain solvent and will comply with the tenant’s covenants under the lease.

What can the landlord do to maintain asset values?

In order to maintain investment values, it’s clearly important to retain tenants, especially those that the market perceives to have good covenant strengths. However, as indicated, there is no point in retaining a tenant whose covenant is very weak.

If you suspect that your tenant is insolvent, or is likely to become insolvent in the next couple of years, it is important that you make sure that the property is as re-lettable as possible. While tenants are likely to want you to put off major capital works during the hard times, it’s essential that premises are not allowed to get into disrepair and become harder to re-let.

Make sure your leases contain the right to enter and carry out repairs, so that if the tenant is not complying with its repairing covenants, you can enter the property, undertake the work yourself, and charge the tenant the costs as a debt. If there is a strong likelihood that your tenant will become insolvent, it is important that you exercise this remedy as soon as possible, to give yourself the maximum chance of recovering the debt from the tenant.

If you do re-gear, and you are unsure whether your tenant will have the ability to pay even a lower rent, make sure that you get a substantial rent deposit, to cover default.

If your tenant does go into administration, make sure that if the administrator uses the premises for the purposes of the administration, and trades from the premises, they pay all of the passing rent due and owing. Even if the administrator vacates the premises, remember that while the tenant in administration is liable under the lease, the premises are nil-rated for business rates purposes. It is often better to obtain permission from the administrator to remarket the premises, and hold keys, without this amounting to a surrender and/or forfeiture of the lease, so that you are not liable for void business rates, on top of unpaid rent. The lease can then be surrendered with the consent of the administrator when and if a new tenant is found.

If your premises is too large for the current market, take advice straight away on the sort of tenants likely to take on the capacity, and if it looks like there are no suitable tenants for the property, get planning advice from the local planning authority so that a strategy for redevelopment can be put in place sooner rather than later.

Simon Murphy is a property management partner at Taylor Vinters. He manages a team of dedicated property management lawyers who advise on all aspects of commercial, residential and agricultural property management issues. Simon advises on a wide range of property issues from lease renewals, possession claims, service charge disputes and dilapidations claims, to advising on rights and liabilities affecting freehold land and adverse possession.

Founded in Cambridge, and now with offices in London and Singapore, Taylor Vinters employs more than 220 highly qualified staff to offer a broad range of legal services to private, commercial and not-for-profit clients.

Taylor Vinters is a progressive law firm headquartered in Cambridge, with offices in London and Singapore. Employing over 220 highly qualified staff who help businesses, individuals and not-for-profit organisations, across the UK and internationally, with a broad range of legal services. Clients range from high net worth individuals and university spin-out companies through to national charities, small to medium sized enterprises, FTSE listed businesses and Fortune 500 multinationals. www.taylorvinters.com

Business tenants and corporate landlords can find common ground, says Simon Murphy, property management partner at leading law firm Taylor Vinters

Whether a retailer, an e-retailer or a MegaBox store – space has got to be rented somewhere and business is tough right now. If you are struggling to make the rent, orders are slipping and you’re not sure you are going to make your next payroll, then it’s time to ask:

What kind of help can you get from your landlord?

Many retailers are facing the pinch, with Game the latest in a long line of high street chains to go into administration. Landlords can sometimes help to prevent their tenants descending into administration if they are prepared to accommodate some realistic requests from the tenant, so as to keep their investment values and occupancy levels up.

The landlord may be prepared to re-gear the lease, if rent levels have fallen. If done on the basis of an exchange of side letters (i.e. on a personal basis for the current tenant) so that there is no effect on rent review, then this is sometimes an easier pill to swallow for the landlord.

Landlords can be more flexible with tenants concerning improvement works. Where there is an internal only lease with a service charge, significant capital works can be delayed so that payments required of the tenant can be kept to a minimum.

Where underletting of part is prohibited by the lease, but the tenant does not require all of the space, landlords can be persuaded to be more flexible. This works provided that any underletting is excluded from the security of tenure provisions of the landlord and Tenant Act – so that the landlord doesn’t end up with an undesirable tenant at the end of the lease.

If you’re having trouble persuading your landlord to agree to re-gear, it may be appropriate to offer personal guarantees or a rent deposit if you can stretch to it, so that the landlord has some security in relation to the reduced rent. There is simply no point in the Landlord agreeing to a reduced rent from a tenant who does not have the ability to even pay the reduced rent.

The key to all negotiations, as one would expect, is reasonableness. Although landlords (but probably not landlords in Cambridge) are likely to be prepared to be flexible in order to keep their tenants, they are not likely to want to affect their investment value, unless there is some likelihood that the reduced rent will be paid, and that the tenant will remain solvent and will comply with the tenant’s covenants under the lease.

What can the landlord do to maintain asset values?

In order to maintain investment values, it’s clearly important to retain tenants, especially those that the market perceives to have good covenant strengths. However, as indicated, there is no point in retaining a tenant whose covenant is very weak.

If you suspect that your tenant is insolvent, or is likely to become insolvent in the next couple of years, it is important that you make sure that the property is as re-lettable as possible. While tenants are likely to want you to put off major capital works during the hard times, it’s essential that premises are not allowed to get into disrepair and become harder to re-let.

Make sure your leases contain the right to enter and carry out repairs, so that if the tenant is not complying with its repairing covenants, you can enter the property, undertake the work yourself, and charge the tenant the costs as a debt. If there is a strong likelihood that your tenant will become insolvent, it is important that you exercise this remedy as soon as possible, to give yourself the maximum chance of recovering the debt from the tenant.

If you do re-gear, and you are unsure whether your tenant will have the ability to pay even a lower rent, make sure that you get a substantial rent deposit, to cover default.

If your tenant does go into administration, make sure that if the administrator uses the premises for the purposes of the administration, and trades from the premises, they pay all of the passing rent due and owing. Even if the administrator vacates the premises, remember that while the tenant in administration is liable under the lease, the premises are nil-rated for business rates purposes. It is often better to obtain permission from the administrator to remarket the premises, and hold keys, without this amounting to a surrender and/or forfeiture of the lease, so that you are not liable for void business rates, on top of unpaid rent. The lease can then be surrendered with the consent of the administrator when and if a new tenant is found.

If your premises is too large for the current market, take advice straight away on the sort of tenants likely to take on the capacity, and if it looks like there are no suitable tenants for the property, get planning advice from the local planning authority so that a strategy for redevelopment can be put in place sooner rather than later.

Simon Murphy is a property management partner at Taylor Vinters. He manages a team of dedicated property management lawyers who advise on all aspects of commercial, residential and agricultural property management issues. Simon advises on a wide range of property issues from lease renewals, possession claims, service charge disputes and dilapidations claims, to advising on rights and liabilities affecting freehold land and adverse possession.

Founded in Cambridge, and now with offices in London and Singapore, Taylor Vinters employs more than 220 highly qualified staff to offer a broad range of legal services to private, commercial and not-for-profit clients.

Taylor Vinters is a progressive law firm headquartered in Cambridge, with offices in London and Singapore. Employing over 220 highly qualified staff who help businesses, individuals and not-for-profit organisations, across the UK and internationally, with a broad range of legal services. Clients range from high net worth individuals and university spin-out companies through to national charities, small to medium sized enterprises, FTSE listed businesses and Fortune 500 multinationals. www.taylorvinters.com

Belvoir CEO Dorian Gonsalves reports on the impact of a double dip recession on the lettings industry

As figures released by the Office for National Statistics confirm that the UK economy has returned to recession, Belvoir Lettings says the rental industry continues to buck the trend.

“In financial terms Belvoir has not experienced a single dip recession in the lettings industry, let alone a double dip,” says Belvoir CEO Dorian Gonsalves, but warns landlords of the importance of a realistic approach to rental increases.

“A double dip recession means that unemployment will continue to rise, which in turn may assist with the dampening of any rental increases seen in previous years,” he says. “As I predicted in December 2011 rents are likely to rise moderately, remaining more or less in line with inflation and salary increases. Rental fluctuation is likely to be very regional with some areas such as the South East likely to see a higher increase as rental prices force people out of London into the Home Counties. The current crisis is clearly making consumers nervous, affecting both the BTL and mortgage market

“My predictions were completely accurate and our franchise owners continue to report increased tenant demand. However unlike reports in the national press, any rental increases are likely to be modest and occurring only in pockets of the UK, with some areas experiencing no increase at all.

“In recent weeks there have been reports claiming that housing sales have increased, but the double dip recession is likely to have a negative impact on this. However, this then produces a market that is ripe for opportunist investment landlords who are able to secure property purchases that represent real value for money. Belvoir offices are already reporting increased activity from BTL landlords and investors.

“As I also predicted last December there is a shift towards more people renting as a preferred lifestyle choice rather than from necessity. People who rent can plan their spending more accurately and have flexibility to follow job offers etc. This is becoming increasingly important in the current financial climate.

“Feedback from franchised offices across the network shows that tenants are now staying longer in properties and there are various reasons for this. Even modest rental increases, which were heavily published in the national press, tend to give tenants the impression that without very good reason it makes no financial sense to move to a larger or different type of property.

“Because of regional variations in rental yields it is vital for landlords to talk to specialists who understand the local market, as buying in the wrong area could be very costly. With 140+ offices spread across the UK Belvoir can provide an accurate picture of the rental market in different regions and from a property investment perspective this can be very helpful. There is no doubt that if potential investors seek the right advice the returns can be extremely lucrative.”

Belvoir Lettings now have more than 140 offices nationwide. To find your nearest Belvoir office, visit www.belvoirlettings.com

Belvoir CEO Dorian Gonsalves reports on the impact of a double dip recession on the lettings industry

As figures released by the Office for National Statistics confirm that the UK economy has returned to recession, Belvoir Lettings says the rental industry continues to buck the trend.

“In financial terms Belvoir has not experienced a single dip recession in the lettings industry, let alone a double dip,” says Belvoir CEO Dorian Gonsalves, but warns landlords of the importance of a realistic approach to rental increases.

“A double dip recession means that unemployment will continue to rise, which in turn may assist with the dampening of any rental increases seen in previous years,” he says. “As I predicted in December 2011 rents are likely to rise moderately, remaining more or less in line with inflation and salary increases. Rental fluctuation is likely to be very regional with some areas such as the South East likely to see a higher increase as rental prices force people out of London into the Home Counties. The current crisis is clearly making consumers nervous, affecting both the BTL and mortgage market

“My predictions were completely accurate and our franchise owners continue to report increased tenant demand. However unlike reports in the national press, any rental increases are likely to be modest and occurring only in pockets of the UK, with some areas experiencing no increase at all.

“In recent weeks there have been reports claiming that housing sales have increased, but the double dip recession is likely to have a negative impact on this. However, this then produces a market that is ripe for opportunist investment landlords who are able to secure property purchases that represent real value for money. Belvoir offices are already reporting increased activity from BTL landlords and investors.

“As I also predicted last December there is a shift towards more people renting as a preferred lifestyle choice rather than from necessity. People who rent can plan their spending more accurately and have flexibility to follow job offers etc. This is becoming increasingly important in the current financial climate.

“Feedback from franchised offices across the network shows that tenants are now staying longer in properties and there are various reasons for this. Even modest rental increases, which were heavily published in the national press, tend to give tenants the impression that without very good reason it makes no financial sense to move to a larger or different type of property.

“Because of regional variations in rental yields it is vital for landlords to talk to specialists who understand the local market, as buying in the wrong area could be very costly. With 140+ offices spread across the UK Belvoir can provide an accurate picture of the rental market in different regions and from a property investment perspective this can be very helpful. There is no doubt that if potential investors seek the right advice the returns can be extremely lucrative.”

Belvoir Lettings now have more than 140 offices nationwide. To find your nearest Belvoir office, visit www.belvoirlettings.com