Landlords Heading To Liverpool As The City Property Market Booms

new report has revealed Liverpool is the place to buy for landlords – but anyone looking to add to their portfolio should act quickly, as property prices are on the up faster there than in other locations.

The report (commissioned by London’s Beauchamp Estates and Liverpool’s Logic Estates, with analysis by Dataloft) describes the city as a ‘regional powerhouse’, stating residential property prices have risen more quickly than anywhere else in the last five years – including the capital.

But this surge shouldn’t deter potential investors, because prices there are still affordable compared to other key locations. The report looks at the Liverpool Waterfront, where an average-priced apartment would cost just under £240 per square foot. This compares to around £353 (per square foot) for a similarly well-positioned property down the road in Manchester and £678 (per square foot) in London.

Buy-to-let landlords are also collecting higher rental yields – with an average of 6.4% across all apartments in Liverpool, compared to 5.5% in Manchester and 4.5% in London (of the cities included in the survey, only Leeds saw a higher rental yield for all apartments, sitting at 6.7%).

And there are also seemingly more renters to attract – 55% of the city’s population live in private rented accommodation, compared to 27% in the capital and 17% across England as a whole.

However, while this report extols the virtues of buying in Liverpool, it’s worth noting that there are multiple favourable locations which have emerged as key investment hotspots in recent reports.

The Buy To Let City Tracker research undertaken by Aldermore Bank saw Bristol top the list of best places to purchase an investment property, based on indicators including average total rent, short and long-term returns, percentage of vacant housing stock, and number of renters.

Second place was Oxford, with Cambridge coming third, followed by Manchester and Luton to complete the top five.

And in a third piece of research – this time conducted by Compare the Market – Birmingham topped a list of the 20 best places to be a landlord in the UK, with Bradford, Coventry, Bolton and Burnley also making it into the top five.

Client Money Protection Review – Our statement

After attending the annual ARLA Propertymark Conference and Exhibition yesterday, Concentric HQ are pleased to confirm that the government have accepted the Client Money Protection Review (CMP) and will be introducing mandatory CMP for all letting agents.

Housing minister Gavin Barwell announced: “We’re accepting these recommendations... Today we confirmed we'll require all agents to protect the client money they handle.”

Presented by Baroness Hayter and Lord Palmer, the review called for all letting agents to use the scheme, which recompenses landlords and tenants should their funds be misappropriated, by law. This now means that rent, deposits and other client funds will be insured in the event of letting agents entering bankruptcy or committing fraud, meaning tenants and landlords can always claim their money back. While still under discussion, letting agents that do not comply will face heavy penalisation, and could potentially face a lifetime ban from lettings.

Chief executive of ARLA Propertymark, David Cox, commented: "Working together we have managed to convince the Government of the merit of compulsory CMP... With the ban on letting agent fees on the horizon, this is more important than ever before, so we are very pleased the Government has agreed to take it forward.”

As members of regulatory body ARLA Propertymark, Concentric welcomes this news and sees it as another big step toward total regulation of the private rented sector. We have always been proud to offer transparent client account services and feel strongly that all letting agents should offer the same.

Rent arrears - what landlords need to know

Being a good landlord means having to deal with problems as they arise, whether it’s appliances that have stopped working, issues with neighbours or the tricky situation of handling rent arrears. You may have vetted your tenants thoroughly and to the correct procedure, but it’s not always a guarantee that they’ll pay on time. Sometimes, a tenant will hit hard times – they may lose their job, go through a major life change, or simply have a tough month with expenses - and you need a strategy to deal with rent arrears when they happen.

Whether you’re an independent or working through a letting agency, you should have a ‘process’ – a fair, regular system for dealing with arrears that you stick to for every tenant. A predetermined system proves that you treat all your tenants equally, which should help you especially if you ever face allegations of harassment. It also helps you gather evidence in a chronological order for court cases should it get to that stage.

On that topic, first things first - do not harass! Any threatening language or behaviour towards the tenant or their family and friends, even passive-aggressive acts such as cutting off supplies, will hurt your relationship with them and come back to haunt you if you have to take them to court. You have a duty to maintain your property and be professional – keep focus on the tenant’s side of the agreement, not yours.

Here’s what every strong rent arrears management system should have:

  1. An entry for guarantors. You should always secure a guarantor if you feel an application is weak. If a guarantor is secured, include them in all rent arrears communications as though they are a tenant. They are owed the same information so give it to them.
  2. A tenancy agreement that puts responsibility with the tenant on rent payments. You should definitely look into getting a tenancy agreement that asks for rent advances, especially if a guarantor is not an option. Most tenancy agreements will put responsibility of rent advances on the tenant, not you – make sure this is the case.
  3. A commencement date of the rent deadline. The account technically enters arrears on the day the payment is due if it is not received.
  4. Communications that are made one week, two weeks and three weeks after the account is in arrears, giving a polite call and letter that increases in severity each time. The letter acts as evidence of you attempting to collect rent, while the call enables you to get an immediate response. Keep records of the response you receive. Don't solely rely on emails – they are too informal and can be forwarded and distributed online beyond your control.

Once a tenant has passed through this system, you enter week four of arrears and you are now owed 2 months’ rent. At this stage, you have a right to repossess and you must prepare your paperwork. To bring the case to court, you must send a Section 8 notice citing grounds 8, 10, 11 to the tenant, along with a notice that you will commence court action in 14 days, with two days allowed for service.

Whether you have go to court with a tenant or not, chasing rent arrears can be a difficult process, both personally and professionally. This system is simple, legally compliant, neutral and effective for keeping record of arrears that can be easily referred to. At Concentric, we specialise in helping landlords in difficult circumstances, so if you would like some guidance please contact your local branch who can talk you through your concerns and the services we offer.