Digital Book version: http://www.landlordzone.co.uk/digital-book/Jan12/index.html
Editorial:
The ongoing recession and the squeeze on mortgage lending are producing something of a bonanza for cash-rich landlords – those able to secure low interest mortgages with a good deposit.
If you’re careful you can pick-up good properties at bargain basement prices, whilst being virtually guaranteed a solid income stream.
With rentals in high demand in most areas and social landlords and local authorities strapped for cash, landlords continue to be the main source of growth for housing provision in the UK.
The Private Rented Sector (PRS) has grown steadily from a low point of 6 to7% of UK residential housing stock by value in the 1990s to around 19% today, and this proportion is expected to be well over 20% by 2020.
Landlords have been pilloried by some recently as contributing to the present housing market troubles, but the facts are landlords, unlike the traditional social housing providers, have “come up with the housing goods”. They have now been emboldened by a secure income, with the prospect of long-term capital appreciation as a potential bonus, in a period when alternative cash investment yields are extremely low – non-existent if inflation and taxation is taken into account.
Contributing to the growth of the sector has been a large cohort of “accidental” or “reluctant” landlords, unable to sell their homes, some of whom have since come to realise the benefits of being a landlord investor and going on to build up a buy-to-let portfolio.
The downside risk is that during a recession the guaranteed income can come to an abrupt end if tenants either can’t or won’t pay the rent.
Good landlord self-management or using a good professional agent is crucial, and this is where many newbies fall down: anyone can let out a property but maintaining that crucial cash-flow and staying on the right side of the law takes experience and professionalism as a landlord or agent.
High demand, low supply and the inevitable rent increases are now resulting in louder and louder cries from some quarters for government to control rents and increase security of tenure.
There is a real danger of going back to the Rent Act era troubles. It beggars belief that a half century of proof that rent controls long-term work against tenants would be overturned in an instant by some well meaning but misguided MPs.
These measures would inevitably drive many landlords out of the market, many would run their properties down by neglecting repairs, as returns become uneconomic, and the end result would be even more housing shortages.
e-mail your comments to: editor@landlordzone.co.uk
Tom Entwistle, January 2012
This issue is sponsored by: Cover4LetProperty
This LandlordZONE Newsletter is now available, in addition to the .pdf version, in digital-book format.
Download LandlordNONE Newsletter in Adobe® .pdf format: http://www.landlordzone.co.uk/BlogNews/LandlordLOGJan12.pdf
Digital Book version: http://www.landlordzone.co.uk/digital-book/Jan12/index.html
The links to the journal are also posted at:
http://www.landlordzone.co.uk/BlogNews/newsletter-archive.htm and at
http://www.landlordlog.com/
===========================================================
LandlordZONE Forum Apps for both Android phone users and Apple iPhone & iPad users. These free apps can be downloaded from the Android Market & the iTunes Store – full instructions here:
Android – www.landlordzone.co.uk/apptutorial.htm
iPhone/iPad – http://itunes.apple.com/gb/app/landlordzone/id448930223?mt=8
===========================================================
To advertise call 0845 260 4420 or e-mail advertising@landlordzone.co.uk
===========================================================
Follow us on Twitter - https://twitter.com/LandlordZONE
Why not forward this to a friend and if you think they will benefit from this service register at:
http://www.landlordzone.co.uk/site-zone/register.htm
Newsfeed Reader:
http://www.landlordzone.co.uk/blog/?feed=rss2&cat=7
The majority of the inventories presented to deposit scheme adjudicators are not worth the paper they are written on, leading to landlords losing deposit cases, says the Association of Independent Inventory Clerks (AIIC).
Many landlords and agents are failing to present at court thorough and fully detailed inventories, copies of which have been given to the tenant at check-in and check-out. It is imperative that tenants sign their acceptance of the contents of the check-in within 7 days of the move in, and this signed copy should be retained by either the landlord or letting agent.
An unsigned inventory is still acceptable by deposit scheme adjudicators, if it is dated and proof is available that the document has been given to the tenant at time of check in. Tenant deposit schemes recommend that an inventory is compiled by a suitably qualified professional inventory clerk although landlord’s inventories, if they contain sufficient detail, will still be accepted.
Other useful evidence to use in any end of tenancy dispute are contractors invoices for services like professional cleaning of the property, carpets, windows, oven etc or for gardening. Also needed as evidence are receipts for any items purchased specifically for this tenancy.
Pat Barber, Chair of the AIIC, said: “It is so important for landlords to ensure they have all the right paperwork to present to adjudicators. Time and again we see landlords losing disputes because they fail to provide the right evidence to show that a tenant has damaged the property. It should always be remembered that the deposit is the tenant’s property until a landlord can prove justification for any deductions.
“It is vital that there is a thorough and detailed inventory which will enable both parties to be treated fairly and reasonably. The inventory documentation serves a number of vital functions, especially if professionally compiled – including providing a catalogue of the let property, an unbiased record of it condition and any items included in the tenancy. It also forms part of the legally binding contract that is set out in the tenancy agreement between the tenant and the landlord.
“Therefore it is vital to have a carefully prepared inventory at check-in, which can be then used at check-out, to enable an accurate comparison of the property’s condition. Without this documentation, landlords and agents could end up significantly out of pocket. The good news is that if landlords and agents have all the right evidence in place, their chances of winning a dispute is greatly improved.”
According to the AIIC, many inventories are more often than not, completely inadequate, mainly because:
- Landlords and letting agents make the mistake in thinking that inventories can be heavily comprised of photography and video. Completely photographic or filmed inventories without a complete written accompanying report are almost useless. If photography or film has been used in your inventory, make sure it is detailed enough and dated. Include photographs of the garden; interior of the shed or garage; inside of the oven; and keys handed over to tenants – these are the main areas of problems that occur and are often down to misinterpretation at the end of a tenancy.
- Remember, you don’t need photos of every single corner of the property, these are frankly a waste of time and effort (and would be impossible to do) – stick to the important things. Films and photographs alone will be of little use in a dispute when an adjudicator is trying to find hard evidence of a particular area. You can bet the problem in question just won’t be something you have photographed in the first place!
- Many landlords and agents do not carry out a thorough and full check-in and check-out of the property at which the tenant was present. Landlords and agents who don’t have this available when they go to court, have little chance of winning the case.
- Often, no correspondence with the tenant is documented and no receipts are kept for the deductions on the deposit eg cleaning and repairs.
The AIIC is a not for profit membership organisation and is committed to excellence and professionalism in the property inventory process. The AIIC works hard to ensure that all landlords, tenants and letting agents understand the importance and benefits of professionally completed property inventories.
Some 55% of homeowners expect house prices to rise in the first half of 2012, research by Zoopla revealed.
British homeowners predicted house price growth would be 2.2% over the next six months, down from 2.7% predicted over the past three months.
In October, 59% of homeowners surveyed by Zoopla said they expected house prices to rise over the following quarter.
Figures from Halifax’s December House Price Index revealed that house prices dropped 0.1% in the three months to December.
Only 24% of homeowners said they expect the value of their own property to fall over the coming six months whilst 29% expect house prices in their area to fall.
London homeowners were more optimistic about the housing market with 72% of Londoners expecting average values in the capital to rise over the next six months, up from 68% last quarter.
Owners in the capital now predict property prices to grow by 4.7% over the first half of 2012.
Nearly half, 48%, felt the key sign that the property market is improving would be when mortgage availability improves.
However only 11% of the homeowners surveyed by Zoopla said they felt it was now easier to get a mortgage than it was three months ago.
Nicholas Leeming, director at Zoopla, said: “There is a lot of general economic uncertainty at the moment which is taking its toll on homeowner confidence.
“Until there is some good news on the overall economy, homeowners will continue to be cautious with their optimism for the property market.
“Londoners, however, are living in a market detached from the rest of the UK. Many overseas buyers continue to pile into London property to take shelter from economic or political storm clouds elsewhere which is helping to boost prices and confidence in the capital.”
Yuan Phoon, 11 January, 2012 – www.mortgageintroducer.com
