As the holiday season comes to an end we enter the busiest period of the year for many landlords, especially those operating in the student market. Many students will be entering private landlords’ accommodation for the first time, after spending their first year in halls, so for landlords and students a period of settling in with all the associated problems this brings is inevitable.
Likewise, many students and workers will be starting new jobs in new locations, meaning they too will be entering their accommodation in private rented accommodation for the first time.
For the landlord, as always, preparation and planning is the key to a successful letting, and with mulit-let accommodation, where relationships can easily become strained, this is doubly important.
Having good documentation and a thorough screening process is essential, with tenancy application forms, credit checks, referencing and interviews prior to a letting decision all vital if you want to avoid trouble.
For those already invested and those contemplating such a move, news from Savills this week is good news for all buy-to-let investor landlords.
Savills, the international real estate agents have revised their 5-year UK housing forecast to take into account this year’s record levels of price growth.
The main points:
– Savills has increased its five-year house price forecast to 25.7%
– Residential property prices in London and the South-East regions are expected to grow by 9.5% this year.
– The buoyant property market is helping buy-to-let landlords achieve higher returns.
The past year has seen average UK house price increases exceed all expectations over the past year, though this could leave some markets slowing down in the mid-term.
Savills now expect average annual UK house price growth to achieve 9.5 per cent this year, 2 per cent more than their original forecast of 6.5 per cent.
This, they now predict, will be followed by 4.0 per cent growth next year (2015) and coverall growth over the next five years to 2018 of 25.7 per. This is slightly higher than their original 25.2 per cent forecast made in 2013.
Savills say their forecasts are based on an assumption that average mortgage interest rates (base rate plus lender’s margin) will reach 5.0 per cent by the end of 2018. At this level Savills believe there is still some room left for further price growth at a national level at the end of their forecast period in 2018.
This potential capital growth in residential property prices is the main reason that many more people are now choosing to invest in property. Across the UK people, especially the young, are choosing to rent their home rather than make the sacrifices necessary to save for a deposit faced with property value rises which are going further away from the.
As the Government now confirms the compulsory agent’s redress schemes will commence on the 1st of October, all agents need to make sure they are registered soon, if they are not already part of a scheme.
Landlords and tenants should welcome these schemes which are intended to provide independent and impartial dispute resolution when problems arise.
Where a dispute cannot be resolved between the parties, a complaint can be raised about the letting agent by the landlord or tenant concerned.
Three schemes have received Government approval to date: the Property Redress Scheme www.theprs.co.uk The Ombudsman Service Property www.ombudsman-services.org/property.html and The Property Ombudsman http://www.tpos.co.uk
These are compulsory schemes which all agents are obliged to join by the deadline date, failing which they will be liable to a fine of up to £5,000. Local trading standards departments will enforce this.
Many professional agents will already be covered by virtue of their membership of their professional associations, but landlords and tenants should be aware that not all (only around 50% to date) are members of any sort of professional body.
Landlords especially should be aware that dealing with agents who are not in membership of one of the main professional associations means they have limited protection should problems arise. See this article on client money protection: http://goo.gl/v0RQ9I
Finally, for suppliers of services to landlords and letting agents, our recently improved Suppliers Directory, which lists more than 8,000 suppliers of goods and services to the UK Private Rented Sector, and always indexes highly on Google searches, is available for a free of charge listing.
For those companies who wish to highlight their service, a premium listing appearing at the top of the free listings in each category is available for only £49.50 plus VAT per year.
For those of you who are regular readers, you may have noticed our increased coverage of daily breaking news topics on all UK property and buy-to-let developments.
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Tom Entwistle, Editor