UK Rental Market Update: Insights into the Current Landscape

Welcome to our Property Market blog, where we provide you with comprehensive insights into the current trends shaping the UK housing market. In this edition, we'll dive into key headlines of the current Rental Market - including supply and demand dynamics, challenges faced by investors, rental growth versus earnings, and regional snapshots. Let's explore the latest findings!

 

- Annual rental inflation for new lets in the UK remains high at an average of 11%, slightly down from 12.3% in mid-2022.

- Rental growth continues to outpace earnings growth, raising concerns about affordability for renters.

- The demand for rental properties remains significantly higher than the five-year average, while the supply of privately rented homes in Great Britain has seen a minimal 1% increase over five years.

 

Supply and Demand Imbalance:

- The stock of homes available for rent is 33% below the five-year average, highlighting the significant supply and demand imbalance.

- According to the recent ARLA Propertymark Report, the demand for rental properties recorded by member agents in April 2023 was 24% higher than the previous year, further exacerbating the supply shortage.

- Factors such as rapid growth in overseas students and high net immigration contribute to sustained demand for rental properties. This follows the Government shake-up of Visa rules in 2021 to help attract more skilled workers to the UK.

 

Challenges for Investors:

- The number of privately rented homes has only increased by 1% since 2016, as new investment is offset by properties leaving the rental sector.

- Tax changes, growing regulations, higher borrowing costs, and tighter lending criteria have prompted landlords to reassess their portfolios and investment strategies.

- Mortgage rates have increased, impacting the equity or deposit levels required for new buy-to-let purchases, along with stricter lending criteria and stress tests.

 

Rental Growth and Existing Tenancies:

- Existing tenancies have seen rental increases at an average of 4.4%, significantly lower than the market average for new tenancies.

- Landlords are encouraged to review their rents periodically, especially considering challenges such as tax changes and higher mortgage rates, as rent increases can positively impact investments.

 

Breakdown of the Private Rental Market:

- The core private rented sector, comprising long-term lets, accounts for 66% of the market, offering lower hassle and workload.

- Sub-sectors such as holiday and short lets or HMOs may provide higher yields but come with additional costs, workload, and regulations.

 

Regional Snapshot:

- In the West Midlands region, average rents have seen a year-on-year increase of just under 10%, with Birmingham ranking among the top five cities for rental growth.

- Manchester, Edinburgh, Glasgow, and Nottingham also demonstrate strong growth in rental prices.

 

Conclusion:

The UK rental market continues to experience robust demand, outpacing earnings growth and raising concerns about affordability. The supply shortage persists, presenting challenges for both tenants and landlords. Investors face changing dynamics, including higher mortgage rates and stricter lending criteria. Regular rent reviews are encouraged to ensure investments remain financially viable.

Thank you for reading our Rental Market Update blog. If you are a landlord or property investor and would like some advice or to share your views, please contact me anytime...

 

Ali Durrant MARLA

Director of Concentric Sales & Lettings 

ali@concentricproperty.co.uk

UK Sales Market Update

Welcome to our Property Market blog, where we provide you with insightful information on the latest trends in the housing market. In this edition, we'll focus on the sales market, highlighting key statistics and offering valuable insights for both buyers and sellers.

 

1. Transaction Stats:

In January 2023, there was a 10% reduction in property sales recorded year on year, while new home purchases saw a 9% rise in completions. Mortgage approvals experienced a significant 46% reduction, with gross lending down approximately 7%. The decrease in mortgage approvals from the second half of the previous year largely explains the significant difference in lending statistics.

 

2. Buyer Demand:

According to the latest ARLA Housing Insight Report, there was a 30% fall in the number of prospective buyers registered across member branches in April 2023 compared to April 2022. Additionally, member branches reported a 70% increase in properties available for sale year-on-year. These figures indicate a drop in buyer demand, likely influenced by higher mortgage rates and economic challenges affecting affordability.

 

3. Market Activity and Pricing:

Rightmove reported that agreed sales numbers are currently just 3% behind the pre-pandemic market of 2019. The average price of properties coming to the market experienced a 1.8% month-on-month increase in May, reflecting robust activity levels and confidence. Sales agreed in May showed positive growth, and the level of negotiation from the asking price to the sale agreed price remained steady at around 3%.

 

4. Mortgage Rates and Affordability:

Despite an increase in the Bank of England base rate, mortgage rates have remained steady. The average 5-year fixed rate with a 15% deposit is now 4.56%, significantly lower than the 5.89% recorded last October. This decrease in mortgage rates contributes to maintaining home mover confidence in the market outlook.

 

5. House Price Growth and Market Activity:

The Zoopla house price index reveals a year-on-year price growth of 1.9%, the lowest in recent times compared to the 9.6% recorded a year ago. Prices have fallen by an average of 1.3% in the last 6 months due to higher mortgage rates and rising living costs. However, buyer confidence has improved, resulting in an increase in sales agreed, primarily driven by falling mortgage rates during the Spring.

 

Regional Property Price Movements:

The West Midlands region has seen year-on-year price growth of 3.5%, surpassing the national average of 1.9%. Birmingham ranks second among major cities, with a growth rate of 3.8%, just behind Nottingham at 3.9%. These figures indicate a significant difference compared to last April when the year-on-year price increase approached 10%.

 

The Outlook for the Sales Market:

Market activity in the UK sales market remains comparable to pre-pandemic levels. However, predictions suggest that mortgage rates may increase in the second half of the year, impacting affordability and pricing. It is anticipated that the year-end may see approximately 20% fewer transactions than the previous year. Sensible and realistic pricing is crucial for sellers, while buyers should not be discouraged as long as the numbers align. As the year progresses, increased stock levels may provide negotiation opportunities.

 

Conclusion:

The UK sales market demonstrates resilience, with activity levels approaching pre-pandemic norms. Understanding market dynamics, considering pricing strategies, and staying updated on mortgage rate changes are vital for both buyers and sellers. Seek professional advice and remain adaptable to navigate the ever-evolving property market successfully.

Thank you for reading

The Must-Known Legislation To Let A Property Compliantly

Landlords, are you aware of the two main pieces of legislation that you need to comply with to remain safe and compliant? 

In the ever-changing private rented sector, it can be difficult to keep up with the latest laws and regulations that govern this space. However, failing to meet the government’s requirements can result in serious consequences in the form of; notices, fines and prosecution.

That’s why we at Concentric Sales and Lettings are focused on helping you get the compliance information you need on all aspects of Landlord law. In this blog, we’re going to dive deeper into the two pieces of landlord legislation designed to ensure the safety of your tenants within your private rented properties. These two laws are The Landlord and Tenant Act 1985 and the more recent Homes for Fitness & Habitation Act 2020.

 

The Landlord and Tenant Act 1985

Section 11 of the Landlord and Tenant Act 1985 details a landlord’s obligation for repairs. Simply put, as a Landlord, you must ensure the safety of your rented properties.

Specifically, you must ensure that the air, space, water, and heating of the property are properly maintained and kept safe. The law also clearly states that you must carry out repairs on your properties as and when they are due. 

This brings up the question – when are repairs due? 

The legislation states that repairs should be carried out on a “reasonable timescale” based on when you are first notified of the repair requirement. “Reasonable” is somewhat subjective and difficult to define but generally depends on factors such as (a) whether or not the tenant is living in the property and (b) whether or not the severity of the repair warrants an urgent response.

Major repairs (as in water gushing through a ceiling) are required to be acted upon immediately. You, as a Landlord, should take all reasonable steps to carry out any maintenance work or repairs to the best of your ability. Some repairs may take time to be rectified, but as long as you have taken the steps that you can take, the law will consider it reasonable. 

 

Protect Yourself Against Claims

We recommend that you always act as quickly as possible when carrying out repairs for your tenants. This is not just for the comfort of your tenants within your rented property. It is also one of the best ways to protect yourself from potential claims that the tenant may choose to pursue against you. 

Under the law, tenants have the right to report any outstanding maintenance issues to the local authority. The council may then decide to carry out a full inspection which can often lead to a much longer list of repairs. 

It’s important to remember that you are not the only person given responsibilities under Section 11. Tenants are also obligated to “behave in a tenant-like manner”, meaning that they are required to take care of the normal maintenance activities that keep the property clean and functional. This includes things like changing lightbulbs, keeping the drains clear, cleaning the gutters, and other similar activities. Now that we’ve covered the first piece of legislation for landlords let’s cover the second, more recent law. 

 

Homes for Fitness & Habitation Act 2020

This law does not replace the one we’ve discussed but creates additional rights and responsibilities. Generally, it focuses on areas that are not necessarily covered under the Landlord and Tenant Act 1985. There are two key factors you should be aware of when it comes to this law. 

First, this act gives tenants the right, for the first time, to take a Landlord to court for not maintaining their repairing obligations. The government has removed the requirement to first go to the local authorities and has enabled the tenant to go directly to the courts. Landlords must be aware of this change.

Secondly, Landlords are now responsible for hazards and repairs within communal areas throughout the tenancy. You are obligated from the moment the tenancy begins through to the conclusion of the tenancy to ensure that the property is fit for human habitation at all times. The only way to achieve this is through regularly inspecting the property. You must not rely on tenants to report repairs because they do not always do so. 

 

Final Thoughts

Your main focus as a Landlord should be to ensure that your tenants are safe at all times. Failure to comply with these laws can result in; prosecution by the tenant in court, penalties issued by the local authority, fines, and improvement notices that can restrict your right to gain possession of your property. 

With over 170 different pieces of legislation regulating the private rented sector, you may be wondering how to be compliant as a Landlord. 

Fortunately, we have created several resources to help you stay safe, compliant, and up-to-date. That’s why we run a quarterly webinar hosted by Dawn Benett, where we spend 2 hours diving deep into various pieces of legislation that you need to know about. Click here to register for FREE today!

Should Your Address Be On A Tenancy Agreement?

Landlords, did you know that there are over 170 separate pieces of legislation that directly impact the private rented sector? Here at Concentric, one of our big goals is to help educate you to be able to navigate this maze of rules and regulations so that you can stay safe and compliant. 

While you may prefer not to share your residential address with your tenants, did you know that there are laws that govern whether or not you are permitted to withhold your address? The two main rules that apply to your address are Section 47 and Section 48 of the Landlord and Tenant Act (1985). Let’s get into them. 

 

What Section 47 Means To Your Tenancy Agreements

Let’s start with Section 47. Section 47 of the Landlord and Tenant Act of 1985 states that a landlord’s address must be present on all documents that are, in fact, a demand for payment. The document that most commonly falls within the purview of this legislation is your tenancy agreement. This means that you, as a landlord, have a legal obligation to include your residential address on your tenancy agreement. Is your address present on your agreement currently? If not, you could be falling foul of this regulation. What does this mean? 

Your tenants are not legally liable or responsible to pay any rent they may owe you until you have shared your residential address. The law is clear. If you’re using an agent, you are not permitted to use your agent’s address. Rather, the address on the agreement must be the landlord’s residential address, wherever that is in the world. The reason this legislation applies to the tenancy agreement is that it is, in the eyes of the law, a demand for payment. Until and when you have provided your residential address, the tenant does not legally have to pay. It makes sense that you, as a landlord, may feel some reservations about having to share your home address with your tenants. However, in the private rented sector, this is a given right that the tenants have been legally granted. Section 47 grants tenants the right to identify the person from whom they are renting. 

Moreover, if the tenant makes a formal demand, in writing, to you as the landlord or your agent, each party is obligated to respond to that request within 21 days. As we have already mentioned, failure to supply the information within that timeframe could result in the tenant refusing to pay rent until the information requested has been provided. In that situation, the tenant would be in their full legal rights to withhold payment from you, the landlord. 

 

Why You Need To Know About Section 48

The other significant rule that impacts whether or not a landlord must share their address is Section 48 of the same law. Again, this section focuses entirely on the landlord’s address. However, in this case, the legislation refers to an address being given to a tenant in England or Wales for the sole purpose of serving notice to that tenant. In this case, landlords have more flexibility, as the address can be that of your agent or your place of business, depending only on your preference. If you are a company landlord, then the address to provide tenants, under this section, would be the registered address of the business.

Ultimately, these sections of the Landlord and Tenant Act of 1985 do not carry penalties or fines if you are in violation. However, that does not mean that they are inconsequential. The ultimate penalty could be that your tenant simply chooses not to pay the rent. In that event, the law would not require the tenant to pay until the residential address of the landlord was provided. 

 

Conclusion

To recap, Section 47 places a clear obligation on landlords to provide their residential address to their tenants on their tenancy agreement and on any other documents that are payment requests. Section 48 requires that landlords share their business address (or the address of their agent) when serving notice to tenants, only when the tenants reside within England or Wales. 

We hope that you’ve found this information useful. It’s important to always stay informed about legislation so that you can remain in compliance and continue to serve your tenants. If you’re curious about where you can get more information on the latest and most important legislative updates, our very own Dawn Bennett hosts a quarterly webinar where she drills down into a variety of the many pieces of legislation that apply to our industry. 

What you need to know about the immigration act 2016 (2022 changes)

Are you aware of the changes that were made to the Immigration Act 2016 that just came into force in April 2022? The laws surrounding the private rented sector are changing all the time. As a landlord, it can be difficult to keep up with the many hundreds of different laws. However, you understand that there can be serious consequences if you fail to do so. Lettings law is serious. Here at Concentric Sales and Lettings, our goal is to help you by keeping you up to date with all the changes. We’re here to give you the knowledge and practical tips you need to always remain compliant.

So, without further ado, let’s get into the Immigration Act and the 2022 changes.

 

What is the Immigration Act of 2016?

The Immigration Act is a piece of legislation that applies to landlords and letting agents and came into force in England on February 1, 2016. The goal of the law is to ensure that properties are not rented to tenants or occupiers who do not possess a right to rent in the UK. Specifically, the legislation states that a landlord and/or a letting agent must be able to prove any occupier’s right to reside within the property throughout the tenancy. This means that landlords must check that any tenant or occupier within the property has the right to rent in the UK before the tenancy starts. This law applies to every adult who is 18 or more years old and who is living within the property, whether they are named on the tenancy or not. 

How to verify the right to rent

The most important part of the Immigration Act is the requirement that you verify your tenant’s right to rent in the UK. You mustn't discriminate when checking the occupant’s right to rent. Ask each of your tenants, regardless of their backgrounds, to provide the same evidence – namely, that they have the right to reside on the property. The easiest way to prove the right to reside in the UK is by presenting a passport. If it is a UK passport, you have all the evidence you need to prove that the tenant has the right to rent for the duration of the tenancy. If your tenant is from the EU, the process is a little different. In this case, their right to rent can be verified through the government website online. To do this, all you need to do is ask for a share code from the tenant or occupier. Using this code, along with their full name and date of birth, you can conduct an online rent check. Here is where you can do that. Finally, if your occupier is from outside the EU, other documentation will be required to verify their right to rent. Often, tenants from outside the EU prove their right to rent by showing a passport with a supporting Visa that shows the data the tenant or the occupier entered the UK and the expiry date of their visa. For any tenant or occupier that has a limited time to remain, you are required by law to conduct a follow-up check after completing the original right-to-rent check. The follow-up will need to be carried out either upon the date that the visa expires or 12 months after you carried out the initial check, whichever comes last. What this means is that you could, in theory, legally move a tenant into a property today, when their visa expires tomorrow. This wouldn’t be a violation of the law, but it might not make sense for you as a landlord. Therefore, you need to consider all the facts about a tenant’s right to rent before starting the tenancy. Some tenants may not be able to fulfil the fixed term of their tenancy. 

Landlords must keep documentation and evidence that the right-to-rent checks were carried out at the start of the tenancy. Also, landlords should keep records of any follow-up checks that were conducted while the tenant or occupier was living on the property. Finally, the right-to-rent requirements apply to all occupiers as well, so we recommend conducting further checks to ensure that no unauthorised occupants are living on the property.

Two big changes in 2022

Originally, the Immigration Act required these right-to-rent checks to be held face-to-face. However, due to recent events, for the past two years, we have been able to conduct right-to-rent checks via video call. The first big change to the act is that this amendment has been extended to the 30th of September 2022. The second big change is the alterations that have been made regarding biometric residence permits. Biometric residence permits are documentation that we have now used for many years for any tenant or occupier that has a set amount of time to reside. Based on the 2022 changes, these documents are no longer sufficient to demonstrate a right to rent in the UK. Tenants or occupiers that rely on these permits will also need to provide a share code just like EU nationals so that you, as the landlord, can verify their right to rent online. 

Stay compliant, stay safe

Although landlords are not immigration officers, this law is an essential piece of property law that you must comply with. This regulation carries with it fines of up to £3,000 per occupier and, potentially, a prison sentence. However, by ensuring that you are checking both your tenants and occupiers for their right to rent in the UK, you can remain safe and compliant. The Immigration Act of 2016 is just one piece of legislation in our private rented sector that you as a landlord should be aware of. If you’d like to learn more, feel free to join our FREE quarterly webinar hosted by our very own Dawn Bennett, where you can get more detailed information about the laws and regulations that you need to know.

 

Spring Newsletter – Property Market Update

Sales Focus

I think it is safe to say that 2020 was a year like no other for obvious reasons! And from a property market point of view certainly a year which has defied expectations – with the UK experiencing its strongest annual price growth recording since the summer of 2016. To close out 2020, December alone saw over 129,000 homes change hands which is 32% higher than December of 2019 – this only added to what is always a mad rush in the middle of the month to hit clients exchange deadlines so they could enjoy Christmas with peace of mind.

The Mortgage Market has recovered with the bank of England reporting approvals to be up 3.7% on the previous year. Already this year we have seen more mortgage products released again, particularly on 90% loan to value mortgages which of course will be a big help to first-time buyers. And with an estimated 10% more sales agreed in 2020 than in 2019, the start of 2021 has been incredibly positive. The New Year itself was reported as being the busiest ever start to a year by our friends at Rightmove with visits to the website up by 30% and sales property enquiries up by 11% compared to the same period a year ago.

They have also reported that sales agreed in January are up 9% year on year. However – we have seen a new supply of properties coming to market reduce by 12% and the total number of homes for sale down by 6% as new sellers remain cautious while lockdown restrictions remain. This has caused a supply/demand imbalance and is only likely to maintain upward pressure on prices. But with surveys suggesting a large percentage of would-be sellers are holding off due to the pandemic, perhaps we can expect a surge of new supply towards the summer as lockdown measures are eased. Many sales are currently in the conveyancing process, in fact, there are approximately 650,000 transactions currently going through and the process has been a lot slower meaning a heightened level of stress for a lot of home movers – especially those who were pushing for the stamp duty deadline that was previously set for the end of this month. 

But that stress has been lifted for so many with the latest budget announcement as the stamp duty holiday has been extended to the 30th June – so there is some breathing space and opportunity. The chancellors budget announcement was on the 3rd March and represents a number of changes and factors for the housing market. Here are my 4 key takeaways: Starting with Stamp duty – so it is a 3-month extension from the end of March to the end of June meaning that stamp duty is only payable above the threshold of £500,000 which represents savings of up to £15,000 on purchases. This excludes the 3% second property surcharge for anybody who is unsure. – furthermore, to avoid a ‘cliff edge’ when this period ends, the tax-free threshold will then drop from £500,000 to £250,000 for a further three months before finally returning to the normal level of £125,000 from October 1st. This is huge news as savings of up to £5,000 can still be had for completions across the summer months.

Secondly, 95% mortgage guarantee scheme. – I said earlier that the return of 90% LTV mortgages has helped more first time buyers get back into the market with a 5% rise in demand from said buyers in the first 6 weeks of the year. And sales of between £100,000 and £250,000 have seen an increase of around 18% in the first couple of months of this year which is in keeping as buyers of lower value properties tend to be more reliant on the availability of finance – especially at higher loan to values.

So this mortgage guarantee scheme is part of a government initiative to turn generation rent into generation buy and means that the lenders who sign up for it (so far the likes of Lloyds, Santander, Barclays and HSBC are all involved) can purchase insurance from the government to cover some of their losses if the property is repossessed. A bit like an indemnity policy. So a safety net for the lenders to be comfortable offering high loan to value products to buyers again. And this is not just for the first-time buyer but also existing homeowners and those trying to re-mortgage with low equity. (this of course excludes buy to let mortgages which remain at a minimum 25% deposit required)

The third takeaway is Tax thresholds being frozen – a number of tax thresholds including those for capital gains tax and inheritance tax, will be frozen until April 2026. – Capital gains threshold will be held at £12,300 for the 21/22 tax year whilst inheritance tax remains at £325,000 (meaning tax payable only kicks in above those amounts.

So who does this affect?

The move to freeze CGT means anyone selling an investment property or a second home will have to pay capital gains tax of 28% on any increase in the property’s value since they first bought it above £12,300.

Couples who jointly own a property can combine their CGT allowance to £24,600. Inheritance tax is paid at 40% on all assets worth more than £325,000 that are not left to a spouse or civil partner, although this threshold increases to £500,000 if you leave your home to your children or grandchildren. Of course, the speculation over a hike in capital gains tax has already seen some landlords act and we have seen a spike in the sale of previously rented homes. With the 5 year freeze this may well reduce the number of landlords thinking of selling again.

And finally, the extension to the furlough scheme will be extended until the end of September. I have put this in here for 2 reasons: firstly if the government is continuing to support people’s incomes who can’t currently, work then they are less likely to struggle to keep up mortgage payments meaning we are less likely to see a spike in forced sales or repossessions that some have been speculating. And secondly, for all of you landlords with tenants who are being supported by the furlough scheme it means they are less likely to struggle to upkeep your rent payments! That’s a definite positive for all of us! It really is no surprise that reports are stating that we are experiencing one of the busiest ever Spring markets!

 

Lettings Focus

To start with we are still seeing average rents across the UK rising with a 1.4% increase across the last year. Interestingly though Zoopla reports some major cities to have decreased with London most notably dropping by around 8% and more locally Birmingham is apparently down by almost 1% year on year. So taking London out of the equation and the UK increase would in fact be more like 2.5% year on year. And this is expected to continue for the foreseeable future. 

So, guys, I would always encourage regular tenancy compliance checks and a rent review is something I personally tie in with those checks as its always good to know where you stand versus current market rates. A few other interesting points to note starting with a look at where the demand is at its strongest and it appears that commuter belts are stronger than main cities themselves right now. So take our area for example...

Rents in central Birmingham fell by -3.4% in the year to December 2020, but average rents across neighboring boroughs, including Bromsgrove, Sandwell, and Wolverhampton rose by an average of 5.3%. And as my area is Wolverhampton, I just want to advocate why our area is great to invest in for anybody who is actively looking...

1)We are seen as the best value commuter area outside of Birmingham – this takes into account the average cost of rent or mortgage payment plus annual train ticket. Second to us is Cannock! 

2)The average Gross rental yields are now above 6%

3)Tenant demand is unbelievably high right now and there is a real supply issue in the local rental market. – We have personally seen a further 50% increase in the number of tenants registered as looking for a property so far this year and Rightmove reported an increase or 22% in enquiries on properties for let in the New Year. All perfect ingredients for a buy-to-let and I will leave that there but if anybody wants to discuss further I do have a Buy-to-let advisory service which you can contact me if you want some help or are interested!

So that concludes the Spring property report and I do hope you found it useful or at least interesting! If anybody wants to share their views or opinions with me or perhaps would like some advice, please do contact me – I would love to hear from you!

 

Ali Durrant

Branch Manager of Concentric Sales & Lettings

ali@concentricproperty.co.uk

How To Get Better Tenants

Who is your perfect tenant?

Let’s think about how we define our perfect tenant. It might differ from landlord to landlord and will depend on what’s important to you. You’ll also consider the type of property you own and the area you’re in – for example, is it a HMO? Are you located in a city centre full of professionals? Or is it an area popular with families?

The type of person you are able to target will determine how you categorise them, such as:

Nice to meet you

The best way to get a feel for a prospective tenant is to actually meet them. As humans, we have an in-built ability to make hundreds of judgments based on seeing and talking to another human being, so what better way to get an idea of whether a person is right for your property?

This creates the opportunity to ask them questions about their situation, such as their reasons for moving, past rental situations, their jobs, and even their hobbies. It’s a great way to get a feel for who they are in a more natural and less formal way.

Don’t make promises at this stage, though. It’s perfectly ok for you to tell them that you’re not ready to make a decision yet and that you’ll be in touch, especially if you’re not getting a good vibe from them. You don’t have to take the first tenant you meet – in fact, you probably shouldn’t.

Check them out

Make sure that you do all the proper checks. Having a credit check, verifying their income, and immigration checks, will all determine whether they are the right tenant for you, and whether they can afford to pay their rent. However, be careful not to discriminate – letting things like race or colour, religion, or even benefit claims cloud your judgement is a big mistake, and as well as being unfair, is illegal.

Something else you might consider; using Google. Many people use social media, whether that’s Facebook, Twitter, or Instagram, and it’s surprising what you can find out about a person just by searching their name. It’s a useful tool if you want to make sure that the person applying to rent your property is right for you, as you can often get a good feel for their background, friends and opinions, which could all give you an indication of how they will be as a tenant.

Go with your gut

Above all, trust your instincts. If you want better tenants, it really is worth making the effort to meet them, talk to them, and don’t be afraid to do a bit of basic research into their background. Ask questions, and take the time to get a real feel for who they are. And be brave enough to admit if you don’t like them – there’s absolutely nothing wrong with admitting they are not a good fit for you, and looking for someone who is. So many landlords are in such a rush to get someone into their property that they just sign up the first person who takes an interest – and then have regrets when they create problems in not maintaining the property, or worse still causing damage or complaints.

Hopefully, this post has given you a little bit more confidence to go out there and seek out your perfect tenant. Making that little bit of extra effort can save you so much heartache in the long term.

Things you should consider before you rent out your property (Part. 1)

When you are preparing your property for rental, what’s the first thing that comes to mind? What are the things that you look for when you are checking the home for potential tenants? Is it the standard of the décor? The appearance of the carpets and flooring? It’s likely that you will be looking at these things, envisaging it through the eyes of the tenant – but before you even take those things into consideration, you should be thinking about safety.

When a tenant looks around the property, they won’t be able to see whether or not the electrics are up to standard. They won’t be wondering whether the boiler has been serviced. Because they will expect that you, as the landlord of the property, to have done all of the work required to make sure that the property is safe. Don’t let those things escape your attention, as these are the things that could cause you the most problems down the line.

Our advice, particularly to first-time landlords, is to focus your attention on the safety first, before anything else. It really doesn’t matter if the property isn’t ultra-modern in its décor or furnishings – first and foremost, it needs to be completely safe.

Make sure that you take the time to check your compliance with Gas Safety Regulations, that you have adequate smoke alarms placed in key places throughout the property (and that they are in full working order), and that you have fitted carbon dioxide sensors in places where there are risks.

Touching a bit more on that – if your property has an open fireplace, regardless whether it is used or not, it is essential that a carbon dioxide sensor is fitted nearby – if, as has happened in the past, the tenant decides to go against your advice and use the fireplace, then you as the landlord would be liable.

All aspects of safety for the property are the responsibility of the landlord. Keep all safety checks, such as electric and gas etc. up to date – that way you have proof if something were to go wrong.

Make sure it’s clean

This seems pretty obvious, but always make sure that the property you are renting out is clean before you show it to potential tenants. There is nothing more off-putting than walking into a home which has a bad odour, grubby door handles, and unsightly marks on the carpets.

The cleanliness of a property is the first thing your potential tenants will notice, so if you are unable to get it up to standard yourself, make sure you get a professional cleaner in to get the jobs done for you.

Key things are:

Remember; if the property is in a clean and tidy state when the tenant moves in, then they are more likely to keep it that way. And of course, you can insist that when they vacate the property, they leave it in the same condition as when they moved in – this will be noted in both your contract and your inventory.

Present to suit your market

This is something else that is often overlooked – presenting your property to attract the type of tenant you want. You’ll want to take into consideration the kind of area the property is in, and the demographic. If you’re in an area of town where there are a lot of retirees, then you should make sure that the property is set up and decorated in such a way to attract an older clientele. If it’s somewhere that tends to attract professional couples, then they will be more attracted by modern décor and slick modern appliances. And families will have different requirements again.

Something else to consider is, how will you attract the kind of tenant that you want? For example, if your property is a bit run down, hasn’t had any investment in the overall décor, kitchen, bathroom, then think about the grade of tenant that you’re likely to attract.

And to add to that, the more you are willing to invest in getting your property modernised, the higher rent you’re likely to get for it, as people are willing to pay for the convenience of having modern appliances, adequate storage, a good number of plug sockets to suit their needs, and any little modern touches that will make their lives within the home easier and more comfortable.

Of course, these are just a few of the many things that you as a landlord will want to consider when you rent out your property – join us for part 2 of this series where we will guide you through some more of the requirements and legalities you will face when looking to fill your property.

Need advice? Call our office on 01902 421405 where we will be happy to help you to get the right tenants for your property.

Alternatively, download our FREE 'SELL YOUR HOME FAST' guide here.

Looking For A Higher Rental Yield? These Are The Top Areas To Buy Rental Properties

There’s no denying that the lettings market has had it tough over the past 12 months. We’ve seen massive changes in legislation, not least the Tenant Fee Ban, which has mad things harder, both in terms of workload and income. As landlords, it’s difficult to know which path to take – how can we continue to grow and even thrive in this new landscape? And where should we be looking if we want to expand our portfolio to get the best return for our money? Here, we will talk you through some of the recent figures showing the good, the bad, and the downright ugly when it comes to the highest yields in the buy to let market.

The Great Postcode Lottery

As with everything these days, location is king, and that’s particularly true if you’re searching for buy to let properties. It might come as no real surprise to learn that areas boasting the highest yields tend to be in university catchment areas, so if you happen to be looking within NG1, for example, you’re quids in with a massive 11.99% yield – the highest in the UK.

But that’s only part of the equation – if you’re thinking longer term, you’ll also be considering things like capital gains, and rental price growth. With this in mind, information gathered by the UK Land Registry and Zoopla recently looked at the best and worst areas to purchase buy to let properties in the UK – and the results are quite surprising.

The overall ratings

Taking into account the overall yield, plus capital gains and growth, the research revealed that the most lucrative place for buy to lets is Colchester – perhaps influenced by the University of Essex winning the ‘University of the Year’ award in 2018. In fact, the majority of placed that ranked in the top 10 were University cities, which is not surprising as they tend to be the most sought after by the annual influx of students looking for accommodation near to where they study.

The rest of the best were as follows:

  1. Colchester
  2. Stockport
  3. Manchester
  4. Birmingham
  5. Canterbury
  6. Coventry
  7. Wolverhampton
  8. Peterborough
  9. Enfield
  10. Luton

The rising stars – The Midlands

There are three notable Midlands based cities in the top 10 – Birmingham at 4, Coventry at 6, and Wolverhampton at 7. Interestingly, Wolverhampton seems to be the one to watch – an area which has risen from 20th position on the last recorded survey. Recent regeneration in the Midlands as a whole has ensured that properties in these areas will remain to be sought after, and are expected to see future growth with the forthcoming HS2 rail line, making it more accessible and attracting new business to the area.

In contrast, areas around London have begun to see a decline, as again the landscape has changed, and we see more people being ‘outpriced’ by the property market.

The lowest yields

The bottom five in terms of yield are TW20 Twickenham with 2.00%, WD7 Watford with 1.99%, N6 London at 1.93%, HP9 Hemel Hempstead with 1.91%, and bottom of the league CW12 Crewe, with a mere 1.88%. Landlords who have properties to rent in these areas may find that they have to work a whole lot harder to increase those yields.

Other ways to increase the yield of a rental property

When you’re looking at ways to increase the yield of a property, there are a few basic things you can do which could help you get those numbers up – and they’re often overlooked.

Check your spending – It might seem pretty obvious, but if you’re spending out for things like insurances and mortgages, that’s all money taken from your profits, so it’s important to review what you’re spending on a property, and shopping around for better deals if you want to maximise your income.

Research tenant needs – In order to make your property as attractive as possible to tenants, you need to think carefully about what they might be looking for. Nowadays, people demand adequate storage, a good number of electric points, and plenty of space to fit kitchen appliances – if you can provide what they need, and offer additional sweeteners, then they will choose your property over one which doesn’t have those things – and they will pay a premium for it.

Kerb appeal – and the ‘wow’ factor – People shop with their eyes, so think about what your potential tenants see when they approach your property. Make sure that the garden is tidy, fences and gates are in good repair, and doors and windows are clean. First impressions of your property are vital in getting a ‘yes’ to what you are offering. And that means creating an attractive exterior, as well as a well decorated and maintained interior.

Wolverhampton Letting agents packs the room EVERY 3 months with landlords wanting to learn.

Wolverhampton Letting agents packs the room EVERY 3 months with landlords wanting to learn.

On a wet cold and windy night on the 12th June, local Lettings Agents Concentric (incorporating Lawsons) which have been renting and managing properties in the Wolverhampton area for nearly 30 years, ran its second seminar of the year, with one intention in mind… Educating landlords

Over the last few years, there has been literally hundreds of legislative changes that affect a landlord renting their property out, many which now carry heavy penalties such as fines, prosecution and even criminal sentences, not to mention banning orders, so it is more important now, more than ever, that landlords keep abreast of the legislative changes and keep themselves up to date.

Some of the changes include having to register with the ICO (due to GDPR regulations) registering deposits, not charging fees to tenants, numerous changes to agreements and notices, massive changes around the HHSRS and rules allowing tenants to now take legal action against landlords for maintenance failings… just to mention a few.

Concentric and previously Lawsons have been running seminars for year, with their first ones being around 1997, so they are no stranger to running such events, but rather than just put on random speakers, like many do, they use their own team of experienced experts, that are also expert speakers and compliance coaches, so the standard and quality of the content shared is of an extremely high level. Higher than any content many have seen at any other seminar out there for landlords.

 

Dawn Bennett MARLA and former ARLA regional representative, is the key speaker at most of the local agents seminars, and she is the Concentric groups Compliance Director, and has worked alongside Sally Lawson for over 13 years, (Sally is a national figure in the Residential Lettings space, author and former ARLA president)

Dawn oversees the centralised management centre for Concentric, (formerly known as “Lawsons”) and as a result takes care the team who managing literally thousands of properties all over the UK, from standard tenancies, HMO and LHA, everywhere from Newcastle to as far south as Portsmouth, meaning there isn’t much she hasn’t seen.

Dawn. Loves to educate and support landlords, and has an easy, practical and relaxed style, full of case studies, stories and real live examples, to help you understand and remember the key points…

The events are every quarter, normally held in the Novotel in Wolverhampton centre, and hold a maximum of 60 people, and generally are fully booked weeks before the event, so if you want to pop along, book you place early to be sure of a place

When asked why she runs these events for FREE for local landlords, Dawn said “I cannot believe how attacked landlords are being right now by the government and all they are doing is trying to provide safe homes for people, its wrong… this is my community and we need to keep them safe, or else there may be a mass exodus from the market by private landlords, and then where will everyone live? I love it, it helps landlords stay safe, and it keeps more people with roof’s over their heads, what can be wrong in that”

So, when you next attend remember to take your note book with you, you might need it!

To get a flavour of some of the content shared, visit the dedicated Youtube playlist of excerpts from some of Dawn previous legal updates Dawns Legal Playlist Youtube

And to reserve your space at the next event visit www.wolverhamptonlandlordseminars.co.uk