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December 2009

As we near the year-end and enter the quiet season for landlords, it’s perhaps time to reflect on what’s happened over the last 12 months.

Despite going through the worst recession since the 1930s the lettings market has held up remarkably well.

Rents came under pressure as reluctant landlords brought properties onto the market, but as the house sales market hardened in the last few months, rents levels are slowly beginning to increase.

The RICS Q3 Lettings survey is predicting rent rises in the New Year as the number of properties available for renting falls.
There’s been no mass sell off by landlords and most indicate that they are in the business long-term, many looking to add housing stock as and when the opportunities arise—Landlord Magazine survey.

Demographic changes in our society bode well for the private rentals business long-term as it’s inevitable that a bigger proportion of the population will rent.

However, with tough economic times set to continue for some time, the big rise in rent arrears and evictions we’ve been seeing is also set to continue.

Landlords and agents need to consolidate and concentrate on good management to see this tough period through.

One aspect which can be a real headache for landlords is the problem of damp and condensation at this time of year. Here we look into this common problem.

Season’s Greetings and Best Wishes to all for 2010 – Tom Entwistle, Editor

Damp, Condensation and Mould – How to Deal with it!

People associate being a landlord with making pots of money. Hopefully, that’s the case, but it’s also possible to lose a lot of money as well.

A well known firm of specialist property Solicitors have related how they won a £20,000 compensation claim against a landlord, acting for a tenant who had developed health problems living in damp housing.

Dampness, condensation and mould growth are common risks, especially at this time of year, which landlords can be faced with.

These are really tricky problems and although more prevalent in older properties, they can affect new ones as well.

Judging by a spate of legal claims in the United States, damp, condensation and mould growth have the potential to become the new asbestos of tomorrow!

Being a successful landlord is not just about investing wisely: it’s also about managing risk and minimising potential loss. Living in an increasingly litigious culture means that landlords and agents should see risk management as a top priority.

Dampness in a property has basically four causes: (1) ingress of water, say from a leaky roof, gutters, walls, windows etc. (2) rising damp, from under floor areas due to lack of damp proof courses, bridging of these or inadequately tanked under soil areas such as basements (3) internal water pipe leaks, and finally (4) condensation.

All of these problems, over time, have a detrimental effect on traditional building materials, all of which have the ability to absorb large quantities of moisture and develop serious conditions. This can mean wet and dry rot in timbers, deterioration of plaster, masonry, furnishings and clothes, electrical systems, and perhaps more seriously for inhabitants, and landlords, mould spores.

All moulds have the potential to cause health problems and allergic reactions including eye, nose and throat irritation, coughs and breathing difficulty.

However, two mould species – Stachybotrys chartarum and Aspergillus fumigatus – cause serious health risk mycotoxins which produce nausea, headaches, skin rashes and lung infections.

Of the damp problems mentioned, condensation is perhaps the most difficult to understand and to deal with; unfortunately for the landlord it’s more prevalent in tenanted properties!

To find out why this is the case, and how to deal with damp and condensation, read the full newsletter…

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November 2009

As we are about to enter the second decade of the 21st Century, and with the prospect of a new government half way through next year, perhaps now is a good time to take stock of the planned and likely new legislation which will affect landlords.

Since the current government came to power we are told that well over 3500 new criminal offences have been created—that is astounding!

Parliamentary legislative activity, it seems, has been frenetic, with regulation after regulation, much of it rushed through, affecting almost every walk of life.

Whilst one must accept that more rules are an inevitable consequence of an advanced information society, does anyone in government ever stop to consider the costs against the benefits of all this legislative burden on businesses generally, and in our case landlords in particular?

With an army of bureaucrats in Westminster and Brussels making all these rules, resulting in many thousands more jobs and costs needed for compliance, can the net benefit / cost to our society ever be accurately calculated or justified?

In any case, do all these rules actually work in practice? How effective was that bureaucratic colossus, the FSA, in preventing mortgage fraud or curbing the impact of the Credit Crunch?

Finally, are these rules being enforced? Very often it seems that existing legislation is not adequately applied, and overstretched authorities, it would appear, are struggling to interpret all of this new legislation – let alone enforce it.

Since much of the rental property related legislation currently in the pipeline is unlikely to see the light of day during this current parliament, will it survive and be implemented by the next government, even if there is a change of government? Watch this space!

Tom Entwistle, Editor

Legislative Changes

Gone are the days, it would seem, when the occasional landlord or even the professional landlord could let a property on a whim, with the minimum of paperwork and legal knowledge.

Anyone letting a property today, including the reluctant or travelling landlord letting his own home, must have a good grasp of the letting laws, and this requirement is likely to grow as new laws are introduced.

No doubt this will please the letting agents, as more landlords will rely on their expertise to steer them clear of trouble, and the best agents do a good job in this.

Whilst it might seem a logical and perhaps desirable next step to bring in regulation of letting agents, given the trust that landlords and tenants must place in them, and the monies they hold as bankers, is it a step too far to require licensing of every landlord and their properties, in the country?

Today we are faced with several pieces of legislation which could take the process of letting property to the next level—a situation which may increasingly discourage particularly occasional landlords from offering their much needed housing accommodation.

In this issue of the LandlordZONE Newsletter we explore the breadth of the proposed changes and their likely impact over the coming months.

Just one example is the possibility of landlords being held responsible for water bills: the cost would inevitably go on rents, but metered water bills would increase considerably as there’s then no accountability or incentive for tenants to save water.

This newsletter was written by David Lawrenson of www.LettingFocus.com – home of Independent Unbiased Property Investment Information and “Successful Property Letting – How to Make Money in Buy to Let” – consistently the UK’s top selling property book for the last three years.

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September 2009

Things have been looking up recently, with a record re-bound on the stock market and increased property sales, but can this be sustained?

A lack of availability of mortgage finance at a reasonable price and the prospect of a long, slow recovery, with unemployment likely to go on rising for some time yet, says not.

All this brings the possibility of another dip in property prices when eventually the fiscal stimulus is phased-out and tax rises / savage cuts start to bite.

It appears, though, we’ve averted total disaster and at some point in the not too distant future, prices will bottom out and the only way will be up—even if it is a long, slow climb.

In property there is no tomorrow—you must think 5 to 10 years at least.

There are many positives for the UK residential property market over the coming years, so landlords should hold on if they can, focusing on good tenancy management and income.

Any new investments should be made very selectively assessing property types, locations and initial yields—recent auctions have seen ASTs going on yields of nearly 11%

This week we have introduced a rather unusual Topic for the LandlordZONE Newsletter—Immigration Visas and investments in the USA.

For those with the cash resources, now, or very soon, could be the perfect time to invest in that property or business in the sun.

Despite the weakness in the Pound, some US property investments are looking exceptionally cheap.

For example, at a recent auction in St. Augustine Florida (the oldest town and one of the most beautiful and affluent in the USA) building plots in a residential area (200 yards from the sand) went for £25,000 each.

The median price for a typical (3-bed, 2 bathroom, yard and garage) home in Florida today is less than £100,000

But foreign investments need great care: you must visit and do due diligence yourself, you need sound advice from trustworthy locals and you need sound legal advice to establish good title.

Tom Entwistle

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July 2009

As we approach the student letting season and the start of the major job hunting period, August, September and October are traditionally busy times in the lettings industry. This year in particular, there are some important issues facing landlords, just over the horizon.

The Foxton’s Case highlights the importance of having terms in contracts that are fair and straightforward, particularly when dealing with consumers, as opposed to business to business.

This goes for landlords as well as agents under the “Unfair Terms in Consumer Contracts Regulations 1999”. Though the case could go to appeal, and non-business landlords seeking compensation may have to wait a while yet, the current decision which went against Foxtons, looks unlikely to change substantially.

Agents using hidden clauses tucked away in small print, and hidden additional charges, to both the landlord and tenant, should bear in mind that that sort of thing will eventually work against them.

Landlords and agents should be aware the OFT produce guidelines on unfair terms in tenancy agreements and that introducing unreasonable or obscure terms cannot over-ride statutory regulations—they will not stand up in court.

The Government’s response to the Rugg Review has some quite far-reaching proposals, some good, some not so good for landlords—it would seem.

In addition to a landlord’s national register, a register of all rental properties, and independent regulation of agents, there’s a suggestion of using the data-base to help rent-out landlords properties? If you want your views heard you can respond here by 6th August 2009.

Anna Walker, Chief Executive of the Healthcare Commission is leading an independent review of charging and metering for water and sewerage services. It seems that a suggestion from government QUANGO Ofwat is being considered which would involve making landlords responsible for their tenant’s unpaid water bills.

Comment and evidence requested by 28 August 2009. Respond here

Finally, on a brighter note, Exhibition organiser and publishers of Landlord Magazine, Accession, will be hosting the first national Landlord & Buy-to-Let Awards.

The  Awards are free to enter and entries are invited into 16 categories from landlords, letting agents, local government and the landlord services sector. The Landlord & Buy-to-Let Awards aim to celebrate achievements in the sector and reward high standards. See the dedicated web site at: www.landlordawards.co.uk

Winners will be announced at a ceremony held at Birmingham NEC evening of Friday 16th October 2009.

Electrical Safety in Rental Property:

Electricity is everywhere, yet we are all guilty of taking it for granted and not treating it with the respect it deserves.

After all, over 30 people die and approximately 4,000 are injured because of accidents or fires caused by electricity every year.

Rented homes can be a higher risk environment when it comes to electricity due to a number of factors, including landlords’ confusion about where their responsibilities lie and how the myriad pieces of government legislation apply to them.

The task of the Electrical Safety Council (ESC) is to reduce the number of deaths and injuries caused by electricity and one of the charity’s major areas of campaigning in 2009 is to help make rented homes more electrically safe.

In this newsletter the ESC aims to clear up some of the confusion and offer guidance to landlords, so that people can see what they need to do and how they need to go about doing it.

Most landlords are probably aware that there is no legal requirement to supply an annual electrical safety certificate, as there is with gas. However, a landlord is required by law to ensure that:

- the electrical installation is safe when a tenancy begins
- the electrical installation is maintained in a safe condition throughout the tenancy
- any electrical appliance provided in the rented property is safe and has the CE marking.

The electrical installation refers to all the fixed electrical equipment in a property – cables, sockets, switches, light fittings, fuse box, and wiring.

This newsletter outlines what landlords need to do and put in place to ensure that the electrics in their rental property are as safe as possible – and that they have the relevant paperwork to prove this.

Content for this Newsletter is provided to LandlordZONE by the Electrical Safety Council.
More Information can be obtained here:
http://www.esc.org.uk

Tom Entwistle

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Editorial:

The Private Rented Sector (PRS) and buy-to-let has become an important, if not the most important, sector of the UK housing market; certainly as far as tenants, sellers, letting and estate agents are concerned.

The young wait in rented accommodation until they can afford to buy, which suits their mobile lifestyles, the old downsize and some move into a rental retirement, owners rent out their homes when they move away, or when they can’t sell—there’s even talk of a shift to lifelong renting.

All this is a far cry from 20 years ago when hardly anyone rented. By contrast, at the turn of the century around 90% of households rented and in 1939 this figure was around 55 per cent.

The figure dropped to a mere 7 per cent in the 80s—the result of years of well meaning but misguided social legislation which had the effect of destroying the rental market.

In 1988 the Conservatives gave the market a shot-in-the-arm, introducing the Assured Shorthold Tenancy, which was followed by the ARLA initiative—the buy-to-let mortgage package.

Since then the PRS has grown steadily with the present share at 14%, still a way to go to reach the levels of countries in Europe and the US.
The Rugg Report and the subsequent government consultation paper, the precursor to more regulation in the sector, is largely positive about the PRS—not surprising given its importance.

In particular the report highlights high tenant satisfaction levels with private landlords vis-a-vis social housing.

The sector must be one of the few remaining cottage industries—one of the few remaining successful “Mom & Pop” businesses competing head-on and on equal footing with the big boys.

There are moves afoot to encourage institutional investment into the sector, but its success remains to be seen as the process does not economically scale-up well—small landlords have the advantage there.

Whilst prices doubled between 97 and 2008, rents have only increased by 15%, so paradoxically, despite the boom time criticism of BTL landlords, they are now helping local authorities cope with homelessness, taking on more and more HB tenants.

The danger is that this government’s proclivity for more and more legislation means that private landlords could be discouraged from investing in the sector in the future.

Property Investment in a Recession:

Despite recent events, and growing red-tape and regulation for landlords, it remains a truism that investing in property will continue to be an excellent place to put your money and to build-up your wealth over the long-term.

Governments now recongnise the importance of the Private Rental Sector (PRS) to the UK economy in helping to create a flexible mobile workforce and also in supporting social housing.

Big mistakes have been made by many investors, or should we say speculators, during the boom years, who believed, or were persuaded to believe, that high rates of growth in property values would continue almost indefinitely.

The banks and even the government colluded in this misconception—Gordon Brown’s oft repeated budget day claim to have produced “the end of Boom and Bust”!

It therefore seems somewhat ironic that he succeeded in producing the biggest bust the country has seen since 1929-33

There are now signs that the world economy is beginning to stabilize, and that a total economic collapse can now be averted, though it’s still early days and things could still get worse before they get better.

Very low interest rates and a concerted effort by the Bank of England using “quantitative easing” – effectively the printing of money—and by many other governments, appears to be having the desired effect, but the jury is still out on the end result.

However, it seems inevitable that there will be a high price to pay by us all, with unemployment continuing to rise for some time yet, low economic growth, and eventually (after the next election) savage cuts in government spending and probably significant tax rises.

This edition of the LandlordZONE Newsletter looks at property investment—investing in property in a recession—and explores some strategies which can help landlords invest in property safely and successfully for their long-term futures.

Tom Entwistle

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Landlord Action, the National Landlord Association’s recognised supplier in tenant eviction, has reported a significant rise in the number of instructions they are receiving from landlords wanting rid of their bad tenants.

Paul Shamplina, Director of Landlord Action and former certified bailiff and private investigator, comments, “In city centres such as Manchester, Liverpool, Birmingham and London, where there is an increased supply of buy to let property, we have seen a rise, year on year, of 20% in the number of landlords contacting us to help them evict their tenants due to non payment of rent and, whilst numbers are on the increase, the length of time landlords are willing to give leeway to their tenants is decreasing.

There are an increasing number of tenants losing their jobs and paying the rent is not always at the top of their priorities. Being just one month late with the rent can lead to the landlord experiencing mortgage arrears and so they are doing everything in their power to rectify the situation as soon as possible. Our advice line for landlords has been overwhelmed with calls for assistance.”

However, it’s not only financial issues that are causing problems as Paul goes on to explain, “I have just completed some filming for BBC Breakfast News in which I was accompanied by a film crew when serving notice on a tenant who owed nearly £9,000 in rent on her property.

The landlord was a widow and mother of 3 who had bought the property to give herself an income when her husband died. She is now suffering from depression and is on antidepressants and painkillers due to her current situation. Her general health is not good and she told me her whole body was aching due to the stress.”

For the landlord, the process of tenant eviction in this climate can certainly feel like it is geared against them, “the courts are busy everywhere and some landlords are having to wait up to three months just to get a hearing date which means more lost rent.

The judges and bailiffs are inundated as, not only is there landlord and tenant eviction cases to deal with, house repossessions are at a 15 year high, thereby increasing the workloads and meaning the landlord has no choice but to sit in the queue and wait.”

Landlord Action is a UK based tenant eviction trouble shooting agency, focused on helping landlords with bad tenants, problem tenants and tenant evictions.

Landlord Action was set up by landlords for landlords, offering Landlords fixed fees to evict bad tenants nationwide, with a free advice line. Landlord Action have successfully evicted 13,000 bad tenants since the company started in 1999.

Paul Shamplina is co founder and co director of Landlord Action and has more than 20 years experience in the legal field, originally working as a clerk, private investigator, debt collector and certified bailiff.

He has appeared regularly on TV and radio and travels the country speaking, giving advice and presenting “How to avoid a bad tenant” seminars. He believes passionately in the rights of the landlord and is always available for comment on any landlord/tenant related matters.

Landlord Action website www.landlordaction.co.uk free advice line 0800 856 7878 to landlords

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Editorial:

Following one of the UK’s longest periods of sustained economic growth, encouraging too much borrowing, it seems ironic that our government is hell bent on record borrowing (£175 billion this year) to try and get us out of this mess.

Faced with a shrinking economy, severely reduced earnings from the City and falling tax revenues the Chancellor this week set out a course which would appear to penalise the very people likely who create wealth—the only true way to get us out of debt.

The general consensus seems to be that his future growth forecasts, upon which he has based his budget, are overly optimistic, and despite the revenge taxation of the rich being popular with some, it seems likely the burden of extra taxation will fall heavily on us all—after the election!

The big danger is that a government, with such astronomical debt, will be faced with the prospect of massive cuts in public spending (too politically sensitive?) or to print more and more money, inflating its way out of debt.

This would undoubtedly result in inflation in double figures again and dramatic devaluation of sterling, with particular long-term implications for investors.

In the meantime, rent arrears and tenant default are issues that landlords and agents are having to deal with right now.

Although many landlords wish to avoid that part of the lettings market which deals with Housing Benefit tenants, sometimes they don’t have a choice—a tenant that’s been made redundant or losses a large part of their income may have no option but to consider a claim for HB.

This month’s LandlordZONE Newsletter tackles the thorny and complex issue of claims for HB.
Despite the problems, HB can be a life saver for both landlord and tenant. There will inevitably be delays when you embark on the process but patience and a little expertise will often pay off, and a successful claim can prove a very satisfactory outcome.

When claims are rejected, and Councils now facing a 25% increase in such claims may be tempted to do this, it’s not the end of the road—very often there’s a good change of overturning this on appeal if you know how to go about it.

Here, Michael Clayton explains how his expertise in these matters can help landlords through the system.

Tom Entwistle

This Month’s Topic: Claims for Housing Benefit

Housing Benefit claims now come under the new regime of the Local Housing Allowance (LHA)
This is a new way of calculating Housing Benefit for tenants renting accommodation from private landlords. It was introduced nationally on 7 April 2008.

The main change for landlords is that the payment of LHA will be made directly to the tenants who will be responsible for paying the rent themselves.

What most landlords object to is the seemingly inequitable and downright unfair way the government has imposed this on privates landlords, whilst exempting local authority and Housing Association social landlords—the latter on the government accepted principle that it could seriously affect their cash-flow.

At a time when landlords are likely to find themselves with tenants who need to rely on HB payments, often through no fault of their own—they may have been made redundant—these rule changes present something of a challenge to any landlord looking to remain solvent themselves.

However, rules are rules and private landlords will have to come to terms with them.

In fact there’s probably more you can do than you thought to increase your chances of success with HB claims and rent payments, though a certain amount of expertise is needed.

Local authorities will consider paying the landlord directly where there is evidence to suggest that the tenant is unlikely to pay their rent and “making direct payments would be in the interests of the tenant.”
Where arrears of benefit have reached 8 weeks, the local authority will arrange to make payments direct to the landlord “unless it is not in the tenant’s overriding interests to do so.” However, landlords should not wait for the 8 week period to be reached before contacting the local authority.

Michael Clayton (Associates), a specialist Housing Benefit & LHA advisor, has produced the content for this newsletter.

Michael can be reached on michaelclaytonassociates@live.com
Telephone: 01274 629315

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Editorial:

Vince Cable in his new book—”The Storm: The world Economic Crisis and What it Means”—quotes an old Arabic saying: “Those who claim to foresee the future are lying, even if by chance they are later proved right”

He goes on to say that it would be more helpful to think of plausible scenarios than likely specific outcomes, recognising that no one fully understands how this drama will play out.

In that vein, the FAS report, Financial Risk Outlook 2009, published this month, gives three plausible macro economic scenarios:

1—The global economy proves resilient with a limited duration global and domestic downturn, and commodity prices settling to sustainable levels, easing inflationary pressures.

2– The recession is more severe than expected, world-wide and domestically, with deep and prolonged asset price deflation and a lack of response to economic stimuli. (p38)

3—Slow and prolonged long-term recovery with stagflation—stagnant growth with strong inflationary pressures.

Discounting option 3 as the most unlikely scenario, the report states that house prices have dropped 19.1% from their 2007 peak, and that traded options currently indicate a peak to trough fall of 35% (p34)

The result could be up to 500,000 buy to let mortgage holders in negative equity—not a problem unless they are forced to sell.

In fact currently landlords are being squeezed on two fronts: in a lot of areas rents are falling due to oversupply, whilst buy-to-let mortgages are penalised relative to owner occupiers by fixed-rate deals, high deposit requirements and high arrangement fees.

The advice, as usual, is to hang on in there, don’t panic and improve your management efficiency to see the crisis through.

There must be lots of buy-to-let investors out there, originally beguiled by the prospect of ever increasing asset prices and income—a safe pension option—who are now realising the harsh reality of what being a landlord is all about.

You can make money in property in good times and bad, and property is a tremendous long-term income provider, and a growing capital asset, but it is just that—long-term.

In the meantime—unlike a passive pension investment—it must be managed.

This month’s newsletter looks at one of the crucial aspects of property management—selecting tenants.

The content here is provided by TenantVERIFY.co.uk

Tom Entwistle

This Month’s Topic: Selecting Tenants

The law gives a considerable amount of protection to residential tenants, otherwise a minority of landlords would be unable to resist the temptation to take advantage.

However, the same goes for tenants: a small minority of tenants will abuse their landlords’ position, causing damage, behaving badly or using their knowledge of the laws to their advantage and getting away with “murder” or certainly living rent free for long periods.

Despite varying opinions to the contrary, the rental laws are pretty evenly balance in the UK and they have stood the test of time since the last major changes around 1979.

The tenancy laws are certainly a vast improvement on what went before that .

A bad tenant, one unable or unwilling to pay rent, one which trashes the accommodation (often the two go together) or one intent on using the law to their advantage, can seriously damage a landlord’s wealth, and perhaps health as well for that matter, given the amount of stress involved.

The secret of landlording success therefore is to avoid these bad tenants in the first place, if at all possible.
Of course it’s not possible to have a 100% guarantee whatever you do, as some problems arise even though your tenants have the best intentions—no one can plan for redundancy.

However, as a landlord or letting agent, you can considerably reduce the chances of these problems by being very selective when choosing tenants—avoiding the problems in the first place is by far preferable to dealing with them later, when often they become intractable.

In this issue of the LandlordZONE Newsletter we will be discussing how best to select your tenants based on the experience of one of the longest established on-line tenant vetting services: www.TenantVERIFY.co.uk 0845 260 4421

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Despite reports of renewed sales surges and actual rises in property prices, overall prices are still on the decline, rents are coming under pressure and the UK economy is in a pretty dire state.

Way over-optimistic government growth forecasts from last year will need to be revised considerably downwards come budget day—this is a world wide problem with an effective disintegration of the financial system, the likes of which have not been seen since the 1930s.

We constantly read forecasts of when property prices will bottom out and when they will recover—quite frankly, no-one really knows at this stage!

Just as the boom fed on a positive cycle spiralling upwards, the downturn does exactly the opposite.

Considering the seriousness of the situation we must hope that our governments’ credit holds out long enough to see this through.

Inevitably things will improve—already yields are looking tempting—but we’ll be in a completely different operating environment—property will still be a good place to invest though.

For those with the resources, there will be some bargain basement prices.

One bright spot in all this gloom is the student lettings market. With university applications set to rise by around 8% in the recession—education always weathers recessions well—there’s a virtually guaranteed increased demand for the student landlord over the next three years, and beyond.

As always, location is the key, and a recent survey published by accommodation for students (AFS) (see pages 5 & 6) may be of help.

In the agency businesses, many of which are going through very difficult times, it’s very tempting to save where you can—education and training are often a target for cuts in a recession.

However, if you have the resources, it’s obviously an ideal time to get staff trained up to meet the demands of the increasing legislation involved with lettings.

At times like these staff need something to get their minds off the gloom and concentrate on improving customer service and their own professionalism.

This month’s Newsletter should give you some ideas in this regard.

Good look in these difficult times, whatever your business.

Tom Entwistle, Editor

Over the last 12 months there have been 3 different reviews of the private rented sector.

The first, The Carsberg Review, was initiated by ARLA, RICS and the NAEA.

The second was published by the Law Commission and the third was commissioned by the Government.
What do they have in common?

They all mention the role of landlords and letting and managing agents.

Then, in January 2009 Professor Jones’ School of the Built Environment, Heriot-Watt University recommended that letting agents and property managers should be regulated and subject to the Consumers Estate Agents and Redress Act (CEAR Act).

He also proposed that at least the principal professional in a lettings or management agency should have an accredited, advanced qualification.

Unlike many countries in the world, letting agents and managing agents in the UK do not need to be qualified nor indeed are they regulated.

It is estimated that less than 15% of those employed in lettings and management have any sort of vocational qualification.

Unlike Scottish landlords, landlords in England and Wales do not need to be accredited even though there are accreditation schemes which have been developed by some local authorities.

This month’s Newsletter will look into some of the major issues involved.

Content has been provided by Susie Crolla, Chief Executive of the Guild of Letting and Management

If you as a landlord, letting agent or managing agent, are interested in membership of a professional association involved with lettings, or training and qualifications for yourself or your staff, you can contact Susie Crolla on: 01992 479949

Download LandlordLOG in Adobe® .pdf format:
http://www.landlordzone.co.uk/BlogNews/LandlordLOGFeb09.pdf

The links to the journal are also posted at:
http://www.landlordzone.co.uk/BlogNews/newsletter-archive.htm and at
http://www.landlordlog.com/

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As the economic troubles persist, and from all indications this week it will be some time before all this is over, landlords will increasingly have to deal with tenancy problems.

Despite a relatively buoyant lettings market (certainly compared to sales), increasing redundancies, fewer temporary foreign workers and an oversupply of rentals in some areas, will mean that increased void periods and rent arrears will be inevitable for many landlords.

There’s evidence that some of the rental demand is being soaked-up by cash-strapped home owners taking in lodgers, and of course many youngsters will be returning to the nest in these troubled times.
Perhaps even divorce rates, a traditional creator of demand for rental accommodation, will be stifled in the face of limited family resources.

Commercial landlords are faced with similar problems. Most businesses are experiencing falling sales and therefore revenues, whilst costs, particularly business rates, stay the same or even increase.

Rent payments therefore are coming under pressure, with some tenants approaching landlords for reductions.

Dealing with these problems is tricky, especially for in-experienced landlords with nothing in the way of portfolio or financial resources to help them weather the storm.

Reducing voids may mean spending money to make sure the accommodation is up to a good standard, and unfortunately, taking a hit on income by reducing the rent a little.

In the case of arrears, you should try to establish lines of communication quickly—though experience shows that tenants in distress often don’t communicate well. Often they are not in a good state of mind, so don’t think rationally, and the sight of letters, or calls from the landlord, is the last thing they want.

Despite all this, you should persist and, where possible, try to establish the reasons why rent is not being paid.

It may be possible to help your tenant with claims for Housing Benefit, work out a re-scheduling of the rent payments, or in the worst cases, reduce the rent, though this can be risky if other tenants find out about it—they’ll want a reduction too.

If tenants don’t cooperate, usually the best strategy is serving notices and going for possession—remember tenants will not be re-house by councils unless they are evicted.

In the case of commercial tenants, especially where businesses were already shaky, rent payments will quickly go into arrears or stop altogether.

Again, try to communicate, but the issues are different: depending on lease lengths, and now 100% empty business rates. Tom Entwistle

Tom Entwistle, Editor

Let’s Hear it for the Letting Agent

At times like this there’s a strong argument that says, save money by letting and managing tenancies yourself.
That’s all very well if you have the time, the experience and the expertise that’s necessary and if you are located near to your property.

Letting property increasingly demands a businesslike approach, where an up-to-date knowledge of the law and all the other associated skills such as marketing, administration and people management are most important.

Yes, all this can be learned by the average landlord, and a site like LandlordZONE is here to help, but a good agent is worth a great deal—event if you do intend to DIY eventually.

Good agents are invariably members of one of the professional associations, with back-up insurance and deposit bonds to protect both landlord and tenant in case of difficulties.

Look for long established businesses with reputations to keep and staff that are well trained and experienced.

Drive a hard bargain right from the start, though remember—you get what you pay for—gaining concessions on fees can sometimes result is a lower standard of service—we’ve all got to live.

Read the small print in your agreement with your agent and watch for excessive renewal fees.
Content for this issue is supplied by Kate Faulkner, Managing Director
www.designsonproperty.co.uk

Download LandlordLOG in Adobe® .pdf format:
http://www.landlordzone.co.uk/BlogNews/LandlordLOGJan09.pdf

The links to the journal are also posted at:
http://www.landlordzone.co.uk/BlogNews/newsletter-archive.htm and at
http://www.landlordlog.com/

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