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Thursday 26 February 2015

Did you know that 4.4 million homes are rented privately in England?

The English Housing Survey has just released its report on the housing market for 2013/14 with some interesting findings:
·         For the first time the proportion of households who own outright was larger than the proportion who owned with a mortgage. Of the 22.6 million English households, 63% were owner occupiers, of which 33% (7.4 million) owned outright and 31 % (6.9 million) bought with a mortgage.
·         The private rented sector remained larger than the social rented sector. 19% of all households (4.4 million) were rented privately, up from 11% in 2003, as against 17% (3.9 million) in the social housing sector.
·         Almost half (48%) of all households aged 25 – 34 rented privately up from 45% in 2012/13. And it has more than doubled from 21% in 2003/04.
·         In 2008 – 09, 19% of social renters in work received housing benefits, increasing to 32% in 2013 /14. For working households in the private rented sector the proportion increased from 7% to 14% in the same period.
Clearly the private rented sector (PRS) is growing and will continue to do so until we improve the supply of new homes. The PRS is a fundamental part of housing for young people and again that is a trend that looks unlikely to change. Although these numbers are averages across England I do feel they are representative of what is happening here in Southampton.

Fire Brigade backs National Landlords Association fire safety guide

The London Fire Brigade has urged private landlords to take advantage of a new guide issued by the National Landlords Association (NLA).
The Association’s ‘Fire Safety Logbook’ will help landlords to protect their tenants and ensure they don’t fall foul of fire safety laws, the London Fire Brigade has said.
The guide is aimed predominantly at small private landlords and provides a fire safety check list and a year long planner for mandatory checks on essential fire safety equipment such as smoke detectors, extinguishers and emergency lighting.
It also allows landlords to record fires, false alarms and defects to any fire safety equipment.
Neil Orbell, The London Fire Brigade’s Assistant Commissioner for Fire Safety Regulation, commented: “Making sure that landlords understand their fire safety responsibilities is a priority for the Brigade and the NLA’s new fire safety log book will allow them to keep a record of their fire safety precautions in one document. It will also allow them to demonstrate to fire safety regulators and enforcers that they have the correct measures in place to control fire risks within their properties.
“We would also like to see local authority staff, such as environmental health and housing officers, promote the guide to the landlords that they regularly liaise with.”
This year’s National HMO Network Conference, which takes places this Friday (27th February) will be hosted at London Fire Brigade Headquarters and will be attended by landlords and landlord associations from all over the UK.
The NLA’s Logbook, which has been reviewed by the London Fire Brigade, can be downloaded here.
or we can post one to you just email us at

Housing market: confusion reigns

Two wildly contradictory sets of figures show just how confusing the housing market outlook has become. 
The Halifax Housing Market Confidence Tracker said that house price optimism fell to its lowest level for 18 months in January, as lending got off to a sluggish start in 2015. But that downbeat picture was contradicted by new research from Clydesdale and Yorkshire Banks which suggested confidence in the housing market actually hit a three-year high in January!
To add to the contradictory messages, the Halifax House Price Index found prices increased an impressive 2% in January alone to hit £193,130. Halifax also found that 60% of consumers expect the average property price to be higher in one year’s time, although optimism has fallen to its lowest level since June 2013. A further 14% said they want to sell their house in the coming year.
Craig McKinlay, mortgages director at Halifax, said that despite the uncertainty market fundamentals, seasonal patterns remain in place. “Traditionally, a slow start builds to the summer before another lull and then a further period of increase followed by a gradual easing at the end of the year.”
As well as showing housing market sentiment at a three-year high, Clydesdale and Yorkshire's figures showed that one in four homeowners plan to change their current property either by extending or carrying out home improvements.
Confidence is at its highest in London where 64% believe their property will increase in value in 2015, whereas in Wales the figure falls to just 24%.
Steve Fletcher, head of Clydesdale and Yorkshire Banks Retail Network, said: "We have seen optimism returning to the property market over the last few years and this seems to be growing with more people planning house changes whether it is to move, make home improvements, pay off their mortgage or even help a family member to get onto the property ladder.”
Fletcher said its survey supported the latest findings from the Council of Mortgage Lenders which reported that 2014 lending levels were the highest since 2007. But the CML also found that gross mortgage lending slumped in January.
The housing market is at a watershed, but nobody can agree where it will go next. All you can do is make sure you really understand your local market and talk to an independent property expert before investing.

Wednesday 25 February 2015

Southampton Landlords isn't it time you moved letting agent?

The Property Ombudsman (TPO) has just released its first report since the introduction of new legislation which gives every landlord and tenant the legal right to have complaints reviewed through free and independent redress in the event of a dispute with a lettings agent. This legislation came into effect on the 1st of October 2014.

In the three months following the introduction of the legislation 2246 letting queries were logged with the TPO, this represented 57% of all queries lodged. These queries covered disputes concerning rental deposits, letting fees, property viewings, rent collection, tenancy agreements, inventories and reference checks. Agents who sign up to the TPO scheme follow a code that has been through a rigorous process, so businesses and consumers working with the TPO can be assured that if there is an issue with a letting agent it will be resolved independently and fairly.

During the three months following the government's new lettings redress legislation (Q4 2014), TPO helped consumers with:
  • 64% (1,444) enquiries were raised by tenants, while 36% (802) enquiries were made by landlords requesting TPO's free, fair and impartial dispute resolution service
  • 368 formal lettings complaints (which represented 57% of the 644 property complaints reviewed by TPO, covering lettings, sales and other property disputes)
  • 69% of lettings complaints investigated were supported by the Ombudsman
  • A huge variety of disputes - the biggest issues reported by tenants and landlords were:
    1. Communication failure (23%)
    2. Repairs and maintenance (16%) - inc. inventories
    3. Deposit handling (12%) - inc. holding deposits
    4. Rent (9%)
    5. Duty of care (9%) e.g. Failure to meet contract pre conditions
 We meet a lot of landlords who are unhappy with their agent, some can't get their rent paid over, others can't get invoices etc for tax returns and most suffer poor communication. If you are experiencing any of these problems them talk to a letting specialist who understands the real needs of landlords and tenants. As the sales market continues to pick up the traditional estate agents will move resources from lettings to sales and the level of service you experience may get worse. So if you are unhappy take action now or you could become part of the TPO's next quarterly report!

Monday 23 February 2015

Buy-to-let landlords: act now or lose £1,500 tax perk

Buy-to-let landlords are being warned to act now before a tax perk on home improvements that could help them meet new green targets is abolished.
There are just a few weeks to apply for £1,500 tax relief, per property, on works to boost energy efficiency such as insulation or a new boiler.
A further £5,600 of Green Deal cashback is available, but the application process can be chaotic, so landlords should apply as soon as possible if they want to claim.
Landlords have three years in which to make home improvements before new energy efficiency rules come into force. Their costs could run into tens of thousands of pounds and are most likely to affect Victorian and Edwardian properties, thought to make up 10pc of the rental market.
From April 2018, all rental properties must have an energy rating of Band E or higher, otherwise they will be unlawful to let. The Government says tenants pay up to £880 more per year for energy if they live in a property whose rating is below Band E. When the new rules take effect it will be illegal to attempt to rent out inefficient properties, and landlords could be fined or even prosecuted if they are unaware that their home is not “green” enough.
However, the regulations exempt properties where works are deemed “too expensive” or if it is impossible to make the property more efficient.
The targets are among rental reforms that also make it illegal, from April 2016, for landlords to “unreasonably refuse” requests from their tenants to make a home more comfortable.
Currently, landlords can claim income tax relief using the Landlords Energy Saving Allowance, but the perk is due to expire on April 6 .
Commentators have criticised the expiry of the tax break just as landlords are being told to improve their homes. “We should not let this policy expire and die just when it could be really useful,” said David Weatherall of the Energy Saving Trust.
The British Property Federation, Energy Saving Trust, Citizens Advice and National Landlords Association (NLA) are all appealing for the Government to renew the tax relief.
The NLA said it was good business practice for landlords to improve their homes but questions remained over what constituted “unreasonable” works exempt from the rules.
There are also fears that Green Deal cash will be scrapped by a possible Labour government, meaning that landlords would be expected to pay for the improvements themselves. Currently landlords can effectively install their measures free of charge by using a Green Deal loan that is repaid through energy bills. The principle is that the bills will never be higher than before the works were carried out.
Chris Norris of the NLA said: “Landlords are going to have to pay a significant amount themselves. Depending on the outcome of the election, that could be a lot of money.
“Under Labour’s plans there is an expectation that landlords will be able to foot the bills. These bills are easily five figures in many cases.”

Government funds and tax perks have a short shelf-life, so landlords should claim now

Do I need to improve – and how can I do it?
All rented homes must have an Energy Performance Certificate, which tells you how efficient a building is on a scale of A (very efficient) to G (inefficient).
To spell out the options, we have used the example of a G-rated Victorian property that requires double-glazed windows (£4,000), loft insulation (£300), a heat-proof door (£100) and cavity wall insulation (£5,000) to meet the new requirements. The total cost of the works is £9,400.
1. £1,500 from landlord tax breaks. You could deduct the cost of the works from your annual taxable income. Claim the perk via your self-assessment tax return.
2. £5,600 from Green Deal Cash for home improvements is available through the Green Deal on a first-come, first-served basis, with the next release of funds expected in April. The remaining costs could be financed through a Green Deal loan, repaid through your tenants’ energy bills.
To qualify, landlords must first book a Green Deal assessment. An official report from this details the works needed and can be used to apply for vouchers. We explain the process here.
You either pay for the works upfront and claim the cash later or pay once you receive the vouchers. This is decided with your installer.
3. More money from a grant. You might be eligible for funding elsewhere. The main source is the Energy Companies Obligation (ECO), which funds £1.3bn of energy improvements each year.
ECO runs out on March 31 and, although it is expected to continue, its funding will be drastically cut. The budget for the Carbon Emissions Reduction Obligation, for example, which includes funding for insulation and heating systems, will be reduced by a third.

Bassett Green property will yield 6.2% for sale at £155k

This 3 bed end of Terrace property has just come on the market. It is well located in the Leaside Way area of Bassett Green. It appears to be in great condition and could be put on the rental market straight away. It's a little generous to say it’s a 3 bed as this room measures less than 6' x 6' – but makes a good study or store room. The property is located close to Southampton Uni, The Avenue for access to the city centre, Southampton International Airport and the road network. The property will appeal to a couple, young family, sharers and post grad students at the uni. It will secure a rent of £800pcm which will return a Gross Yield of 6.2%.

Sunday 22 February 2015

Southampton 1 bed buy-2-let yields 7.3% for sale at £90k

A one bed unit in this ex council scheme has just come on the market at £90k. It is in very good condition and has the benefit of a garage. It extends to 522 sq. ft. and is on the top floor. It is well located off Weston Lane and is close to Southampton City centre, Southampton water and the road network. It is also well serviced by local buses. It will appeal to a varied tenant pool and will command a rent of £550pcm  - we are checking a tenant into the block opposite in a few days at that rental level. Gross yield is good at 7.3% and the properties requires no work. You will need to check the length of the lease and services charges should be low. This is a nice buy 2 let, maybe one to start your portfolio with!