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 Is The Rental And Property Investing Market Like In Liverpool Right Now?

We have let thousands of tenancies, worked with hundreds of investors, and managed hundreds of properties, helping landlords navigate the local Selective Licensing schemes since their inception in 2015.

Like tenants, landlords and investors come in all shapes and sizes, have different levels of experience, and have different wants and needs, but there are a few questions that we get asked all of the time, and right now, it seems like everyone wants to buy property in Liverpool and the surrounding areas... and I can see why.

We have been instrumental in letting property in and around the west of Liverpool for over 10 years now, our focus; to work with the landlord investors in the area.

We have let thousands of tenancies, worked with hundreds of investors, and managed hundreds of properties, helping landlords navigate the local Selective Licensing schemes since their inception in 2015.

Like tenants, landlords and investors come in all shapes and sizes, have different levels of experience, and have different wants and needs, but there are a few questions that we get asked all of the time, and right now, it seems like everyone wants to buy property in Liverpool and the surrounding areas... and I can see why.

There's a lot of investment opportunity in the area with great property prices compared to many other city locations, and will generate fantastic income (and now capital) returns.

So, if you are thinking of buying a property in the area, here are a few questions you should be asking yourself.

 

What are the most in-demand areas from tenants at the moment?

The top areas that are most in-demand from tenants right now are Bootle, Walton & Fazakerly.

 

What sort of property cannot you get enough of? 

There appears to be a real shortage of 2/3 bedroom houses, maybe because people want more space or a place to work from home, we have all experienced being locked in, and a 1 bed flat can become less desirable. 

 

Where are most investors looking to buy at the moment? 

Most Investors are looking to buy property in Bootle & Walton, which ties in nicely with the increased tenant demands we are seeing. 

 

What rent increase levels have YOU seen in the branch? 

With rents across the UK increasing on average by 8.5% (according to Homelet), we have seen rents across the board here increase by at least 10% over the last year and in some cases a lot more! 

 

What property price increases have you seen in your area?

According to the Liverpool Echo, Liverpool has the fastest rising house prices of any UK city. This year is set to be the busiest for the UK housing market since 2007, with Liverpool topping the house price charts at 10.6% and some areas such as Toxteth maxing out at over 20% in just 12 months.

 

Are unfurnished properties renting better than furnished? 

We find that most properties rent better if they are unfurnished, that is unless they are a house share or student accommodation, then of course furnished is best.

 

What are the key features tenants are asking for right now?

Of course they still want the usual, a good location that feels safe, a nicely presented property that’s clean and has good access to facilities and transport, but this year we have seen a rise in tenants asking for gardens, and to be allowed pets (probably due to the experience of lockdown), and with HMO’s they really do all want en-suite facilities (due to becoming more germ aware). 

 

How many applications from tenants are you getting per property?

During most of 2021, we were seeing around 10 applications from tenants per property, however, this year it has more than doubled, we seem to currently (January and February) be getting up to 25 pre-applications for each property, it's gone crazy!

 

If you were looking to buy a property right now Elisha, what would you buy?

If I was to buy a property now, I would definitely be looking to secure a 3-bedroom terraced house for around £130k, generating me a monthly rent of around £750pcm which results in a 7% gross yield, because I know I could rent it over and over again with zero problems and get good quality tenants.

 

What sort of landlords are buying at the moment?

It seems all types of landlords are buying at the moment, from 1st-time landlords, those with 1 or 2 properties looking to expand their portfolio and large landlords alike, it feels like everyone is buying right now, it’s a very busy market, driven in the main by the huge increase in demand and the shortage of stock out there.

 

What’s the big challenge for the Liverpool market at the moment?

It has to be the introduction of another Selective Licensing scheme across Liverpool from April 2022. This is going to be an additional cost and more paperwork for those landlords in the areas affected, but we have been through this before with Sefton, so we are ready to support our landlords through it.

If you have any queries regarding any of the subjects covered in this article or want to learn how the introduction of the new Selective Licensing laws could effect you as a landlord in the Liverpool area, we're running and inviting you to a free-to-attend webinar on the 23rd March 2022 at 18:30. On the webinar, we will cover all the nitty-gritty details you should 100% be aware of.

Register for the webinar on the next page.

Electrical Certificates – why every landlord should have them

The risks

Imagine if you picked up the phone in the middle of the night to be told that there was a fire at your rented property. As horrific as that news would be, one of the first things that the fire department, the police, and the insurance company would check is whether or not the electrics and electrical appliances within the premises were safe, or whether they could have been the cause of the fire.

And if that were the case, who do you think liability would automatically be with?

If you fail to produce a valid electrical certificate, it could very well be you, the landlord. That would mean that not only do you risk prosecution, but it’s highly unlikely that your insurance would payout.

But, if you have a valid, up to date certificate from a qualified electrician, then you have proof that you have done everything you can to ensure that the electrics in that property are safe. In that case, liability would no longer lie with you as the landlord, but with the electrician, as the question would be whether he had completed the work properly, or with the tenant, who has a responsibility to take care of the property while he or she lives there.

Is it law to have an electrical certificate for my property?

It will be, as right now Government are in processing a law which will mean that all rented properties will have to have electrical checks every 5 years. However, until that time, most agencies are recommending that their landlords get ahead of the game and make sure that all new tenancies start with a valid and up to date electrical certificate, before the tenant moves in.

That’s because, under the Consumer Protection Act Section 37 and Section 19, you have a responsibility to guarantee that your property is safe and fit for tenants to live in. And having an electrical certificate is part of that responsibility.

What will the new law mean for landlords?

Landlords will be required to have electrics checked in their properties every 5 years. This is mandatory, and must be carried out by a qualified electrician. This will be phased in over 24 months; in the first year, all new private tenancies will be affected, and in the second year, all existing private tenancies will also have to adhere.

If a property has recently had an electrical installation condition report (EICR) and has a valid certificate, then the property will not be required to have an inspection until 5 years has lapsed since the date of issue.

What will the required checks include?

The new legislation will require 5 mandatory recommended electrical safety features, which are:

What’s the difference between an EICR and a PAT test?

When we talk about getting an electrical certificate for your property, we’re really talking about the EICR – this is a test carried out by a qualified electrician, and tests the infrastructure of the properties electrics. As detailed above, this includes the wiring, units, plug sockets and switches etc.

A PAT test is really there for the appliances within that property. That would be anything that you include as portable appliances in the property, which might be things like a fridge or freezer, electric oven, dishwasher etc. It’s not mandatory for you to have a PAT test, but some landlords like to get one if they do include these appliances, as again, it provides an extra layer of cover if anything should happen.

In conclusion

While it’s not law to provide an electrical certificate at the time of writing, it’s highly recommended that you obtain one. It’s a small price to pay for peace of mind that your property is safe, and that you won’t be held accountable if something should go wrong.

The Government will be changing the law on this soon, so get ahead and make sure that you’re properties are protected, if not on existing properties, but on all of your new tenancies going forward.

If you are looking to keep all your properties safe by staying compliant with current legislation, click HERE to download our FREE compliance checklist.

Are More People Renting In Their Home Towns?

There have been several reports recently suggesting that young people are opting to rent closer to where they grew up, rather than relocating to search out better job prospects. These same reports say that this is largely down to the steep rise in rent over the past 20 years – but how true are the claims, and what does it mean for landlords with properties in less affluent areas of the UK?

What the report says

Young people between the ages of 25 and 34 were surveyed, and the facts show a drop of 40% in the number of people in that age group who chose to relocate to find better paying jobs. Instead, they were opting to stay either in their home towns, or where they attended university.

As has always been the case, the big bucks are found in the bigger cities, such as London, but more and more young people are finding that even if they land on of these high-paying jobs, the additional salary earned will be swallowed up by the high rents. In this, they are finding that taking jobs which pay less, but are in smaller towns, is their only option.

An overview

The report shows that back in 1997, people moving from the suburb of Telford to Birmingham could expect a 14% increase in median income, but in 2018, that had dropped to -1%, after taking into account rental payments.

The story is the same across the country – Scarborough to Leeds sees a drop from 29% to 4%, and East Devon to Bristol drops from 19% to 1%.

And, it seems, that young people who already live in larger cities are being forced out and are looking for opportunities is smaller towns and suburbs in order to afford better housing.

Young people are no longer footloose

There is a belief that young people are able to pick and choose where they work, and are attracted by the higher salary jobs in bigger cities, but this research is suggesting that this trend is very much in decline. People are realising that if they want to take these jobs, then they are in fact less well-off due to the price of rents in these areas. This means that they are often searching out similar, lesser paid roles in their local towns, where they will get more for their money, and are able to have more cash in the bank.

Out-of-City landlords

There are some city-based landlords who are choosing to diversify and buy properties to rent in other areas, and trends suggest that those landlords who do have properties in these areas are beginning to see local young people and families are more likely to stay within their hometowns, and also rent for much longer terms.

This could be great news if you already have a portfolio of properties in these areas, because it means that more young people will be settling in these towns, and therefore are more likely to raise families there.

Those areas which are within easy commute to cities such as London, Birmingham, or Manchester, for example, offer tenants the option of lower rents, while still being able to commute to city jobs, and so giving them the best of both worlds so long as they can afford it. But there are still a proportion who opt to work for localised companies, and so towns which can offer affordable housing with the promise of jobs are the ones who will fare best.

A new era for letting

With a massive 5.5 million renters saying that they are simply unable to afford to buy their own property, we are truly in an era where we, as landlords and agents, are in high demand. And if we can offer tenants affordable, high quality homes in areas where they can be assured of good job prospects, lower commutes, and closer to their family and friends, then it’s a win-win situation.

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.

7 things landlords might not know about LHA tenancies

It’s a common phrase you see rounding off nearly every rental listing - “No DSS”. DSS – being the now-defunct Department of Social Security – refers to LHA tenants, the catch-all term for low-income tenants who claim Local Housing Allowance (LHA), named after the now-defunct Department of Social Security. 

LHA tenancies have become a bit of an enigma due to the lack of uptake on them. As such, they are an untapped market for many investor landlords, and offer a great opportunity to create a solid portfolio. 

Much is said of LHA tenancies in the lettings world – they’re unreliable lets, they’re a one-way ticket to rent arrears, and so forth - but it’s important to separate the truth from the myth. Here’s some facts you might not know about LHA tenancies:

1)    LHA is a capped flat rate allowance, calculated based on the size of a tenant’s property and the area in which they live. This means tenants need to source a property before their allowance can be calculated. Potential LHA landlord investors should research market values of low-income areas and make sure any properties they would like to let would qualify to be LHA-funded.

2)    Only 30% of available properties in a given area in the UK are affordable to LHA tenants with an even smaller percentage actually renting them due to “No DSS” policies. Due to supply and demand, if you have an affordable property, you could tap into a pool abundant with potential tenants.

3)    Landlords by default can have LHA paid directly to them if the tenant incurs 8 weeks’ arrears, but can apply for direct payment BEFORE this happens. Contrary to popular belief, local councils assess applications on a case-by-case basis and are open to paying landlords directly for a variety of reasons. If you have concerns about a tenant’s ability to pay, council help is always available.

4)    Many local councils, housing charities and letting agencies host direct letting schemes to introduce landlords to low income tenants. This means LHA tenancies are often easier and quicker to set up, which could benefit landlords dealing with vacancies and short-term lets.

5)    Some local councils in Northern England are part of the Empty to Plenty scheme, which helps house LHA-qualifying tenants by guaranteeing the safety and compliance of landlords. The scheme aims to reduce empty properties by assisting landlords with their lets, including options such as leases through housing associations or refurbishment loans for derelict properties of up to £15000. 

6)    As part of the Green Deal, LHA-qualifying tenants can also claim government benefits for replacing old appliances with new, energy efficient models. This means landlords could potentially have boilers, ovens and other expensive appliances upgraded at zero cost.

7)    If it is found that your tenant has been fraudulently claiming LHA and you have been directly receiving the payments, you will not be responsible for the repayments as long as you can prove you were not aware of any wrongdoing, so keeping of records is vital when handling LHA tenancies. 

Due to landlord reluctance, LHA tenants have developed a less-than-favourable reputation, but not all LHA tenants are the same – they can be employed or unemployed, disabled or fit for work, have families or be single. Specialising in LHA tenancies could prove to be a worthwhile investment – not only would you helping many people in need, but you could build a strong portfolio that generates regular cash flow. 

If you are interested in letting to LHA tenants, always have a full discussion with each applicant about their financial situation, what requirements they have for their property and request a full reference. If you’d like further help, you can get in touch your local Concentric branch, who can offer you further guidance and support on meeting LHA property standards and sourcing tenants.

5 Things to Consider When Choosing a Letting Agent

Choosing the right letting agent can be a difficult task. Many landlords dive in without giving it much thought. After being in the industry for as long as I have, I know how to separate average agents from the exceptional ones, and why would you settle for anything less than exceptional? The right letting agent will make you money and free you from the day-to-day tasks that stop you from doing what you’re good at.

Make sure you pick the agent that will give you everything you need.

When it comes to choosing a letting agent to invest your trust in, I’d like to share with you 5 key lessons I’ve learnt over the years. These are factors you should definitely consider to ensure you make the right choice.

1) Are they members of the ARLA?

2) Do they have Client Money Protection Insurance?

 3) Are they both qualified and experienced?

4) Do they have a dedicated management team or property manager?

5)  Are they organised and trustworthy?

If you’d like to find out the final five important factors you need to consider when picking your letting agent, simply click here to download my checklist.