Written By Em

Em Morley

Flooring in Rental Properties – Which One to Choose?

Published On: February 2, 2017 at 11:20 am

Tags: cleaning,flooring,floors,maintenance

As a landlord, keeping your property in good condition is one of your top priorities. You want to ensure that the walls are damp free, drainage and guttering is clear, and that any appliances are correctly installed and meet the required safety standards. But what of the floors in your property?

Flooring in Rental Properties – Which One to Choose?

Often overlooked by landlords and their tenants alike, taking care of the flooring in your property should be towards the top of your list when it comes to maintenance.

Many landlords make the mistake of installing cheap carpet, particularly in student lets, but this can soon prove costly, with carpet having to be regularly replaced due to spillages and stains, keeping in odour and bacteria, and in some extreme cases, problems with mildew. Investing in a more durable, long-term solution such as engineered wood flooring or laminate could end up saving you money in the long run.

There are many advantages to installing an engineered wood floor or laminate in your property, with one of the main plus points being how easy they are to take care of. Cleaning these types of floors is a simple task, particularly with the latter, with a well wrung out mop and cleaning solution the ideal method. Ensuring you use the right cleaning solution, it will help bring the shine back to the floor and remove any soft stains.

If you’re going to install a wood floor in your property, then you will also have to consider which finish to apply to the wood. A lacquered or oiled finish will give an additional protective layer to the wood flooring, making it easier to care for, and more resistant to knocks and scratches. With an average lifespan of more than 50 years, wooden flooring is a great solution for many rooms.

Having said that, laminate flooring is another option which you may wish to consider, particularly for areas such as kitchens, bathrooms or utility rooms. Depending on your choice of style, laminate can look very similar to a real wood floor, but it typically comes cheaper than the real thing. Not only this, but laminate is incredibly easy to replace should any of it get damaged, and so it has a massive appeal to landlords who want to renovate on a budget.

Of course, there are many different flooring options to choose from, but we would recommend both engineered and laminate for rental properties due to their durability, and their ease of installation and upkeep.

A guest post from Luxury Flooring & Furnishings.

W: luxuryflooringandfurnishings.co.uk T: 0333 577 0025

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North East property prices see slow start to the year

Published On: February 2, 2017 at 11:20 am

Author: Em Morley

Categories: Property News

Tags: investors,North East,prices,property prices

Latest data released by KIS Housing has shown that North East property prices have had a rocky start to 2017. Prices in the region have fallen by 3.1% in the first four weeks of the year.

This means that the average costs of a home in the North East currently stands £5,200 less than at the beginning of 2017.

North-East Prices

At present, a home in the North East will set you back £163,591, which is 5% higher than the £158,755 recorded in January 2016. Interestingly, the price fall recorded last year is identical to the one seen last month.

The most prominent falls were found in Houghton-le-Spring (-6%), Killingworth (-5.5%) and Morpeth (-5.1%).

Properties in Killingworth have performed best over the period, currently 6.4% higher than those seen in January 2016.

Rental Rises

Rents in the North East increased to £584 in January, £32 or 5% higher than the same time last year.

Despite house prices falling, rental yields rose slightly by 0.1%, increasing the average North East rental yield to 4.3%.

The cheapest place to rent in the North East is Jarrow, while Durham City is the most expensive.

Peterlee offers the highest yields, with investors enjoying an average return of 6.1%. Other good performers were Newcastle (5.7%), Gateshead (5.6%) and Seaham (4.9%).

North East property prices see slow start to the year

January Blues

Ajay Jagota, founder and MD of KIS Group, noted: ‘January is the time when people tend to view a lot of properties, having made a New Year Resolution to move home, but the actually buying tends to come later. As such we would expect to see house prices fall back at this time of year – not least as they fell by exactly the same amount in January last year!’[1]

‘It’s also been a particularly cold and dark month, which has doubtless discouraged a lot of people from house-hunting. The long-term trend for property values in the North East is incremental, sustainable growth – as shown by the year-on-year rise in values of 5%, which in places like Killingworth and Cramlington has added close to £1000 a month to house prices. There’s increasing evidence that investors are turning away from London and looking north. Increased investor demand may increasingly impact on North East property prices in 2017, for the first time since the early 2000s,’ he added.[1]

Concluding, Jagota said: ‘It’s been claimed this week that demand for rental properties is at a two-year low, but that’s not something we’ve much evidence of in the North East, where rising rents and returns for investors indicate strong demand. Certainly the most eye-catching fact about the state of the residential renting market in the North East is the fact that for the first time landlords in Newcastle are currently getting a better return on their investment than those in Gateshead.’[1]

[1] http://www.propertyreporter.co.uk/property/north-east-property-sees-a-bumpy-start-to-2017.html

Tenants outraged by Santander contract clause

Published On: February 2, 2017 at 10:20 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,landlords,rents,Santander,tenants

Tenants and housing groups have vented fury towards Santander, after the lender included a clause in its buy-to-let mortgage contracts that requires landlords to raise rents by, ‘as much as can be reasonably achieved.’

Despite the wording appearing in Santander’s contracts since 2011, it has only just come to light, as buy-to-let investors continue to feel the pressure of the raft of recent tax changes.

Outrage

A private landlord who spotted this clause in her contract, subsequently contacted industry Mortgage Strategy.

Talking to the magazine, the landlord said: ‘The public views landlords as greedy, but how many people are aware that landlords are being forced to increase rents by banks such as Santander?’[1]

The Santander contract states that when rents are up for renewal the landlord must “get written advice from a qualified valuer [as to] whether the market rent at the date of the review is likely to be higher than the rent currently payable,’ she added.[1]

Santander requires a copy of the valuer’s advice in these circumstances and goes on to say: ‘If the valuer advises that the market rent at the date of the review is likely to be higher than the current rent, you will take all steps to ensure that the review takes place and leads to the maximum increase in the rent which can reasonably be achieved.’[1]

Reaction

One of the UK’s leading mortgage commentators, Ray Boulger, believes the clause, ‘does not square very well with the best interests of consumers.’[1]

Dan Wilson Craw of campaign group Generation Rent, noted: ‘This behaviour is undermining landlord-tenants relationships. Most of the time landlords won’t raise because they want to keep reliable tenants. Being forced to maximise returns will result in unnecessary churn in the market and the destabilisation of tenants’ lives.’[1]

James Daley, director of campaign group Fairer Finance, observed that the clause is: ‘Ethically, it’s absolutely the wrong thing to do. The market for rents should be competitive, and landlords should have the freedom to set rents that tenants can afford to pay and are willing to pay.’[1]

Tenants outraged by Santander contract clause

Disagreement

Responding to the criticism, a spokesman for Santander said: ‘The contract has been in place and remained unchanged since we entered the market in 2011. Landlords should set their rents at a prudent level that is fair for the tenant (based on market rates) and that ensures they can continue to service the debt. Our interest is that the landlord ensures they can continue servicing the loan.’[1]

‘Any potential to increase the rent is only that which can be ‘reasonably achieved’. There is plenty of discretion for the landlord to set a rent that they and the tenant agree, and no direct obligation imposed by us that the rent should be the maximum possible,’ they added.[1]

[1] http://www.telegraph.co.uk/investing/buy-to-let/santander-tells-buy-to-let-landlords-raise-rents-maximum/

Now the NLA has Issued its Budget Wish List

Published On: February 2, 2017 at 10:06 am

Author: Em Morley

Categories: Landlord News

Tags: Budget,mortgage interest tax relief,NLA,tax changes,wish list

Following last week’s wish list to the Chancellor from the Residential Landlords Association (RLA), the National Landlords Association (NLA) has issued its own Budget wish list ahead of the announcement in March.

The group has once again expressed its opposition to forthcoming changes to tax relief on finance costs, as the Chancellor prepares to offer his Spring Budget on 8^th March 2017.

Now the NLA has Issued its Budget Wish List

The current rules that allow landlords to offset all of their finance costs, including mortgage interest, against tax will, from 6^th April this year, be phased out to the basic rate of tax.

By April 2020, the consequences of Section 24 of the Finance Act 2016 will mean that it is likely that higher rate taxpayers will only receive 50% of the relief that they current get, which will limit their rental returns, as they will be required to pay significantly more Income Tax.

The NLA has also issued three demands in its Budget wish list – around half of the number of requests the RLA made – acknowledging that the Government’s priorities lie elsewhere.

The organisation recognises that the Government is “preoccupied with Brexit” while the country’s finances are “stretched to breaking point”, with “multiple demands and unacceptably high debt levels”.

A statement from the NLA continued: “Therefore, whilst drawing attention to our past submissions, in which we suggested alternatives to Section 24, in this submission, we have only asked for three very specific things.”

The NLA’s Budget wish list is as follows:

Introduce a Capital Gains Tax (CGT) cut or taper

The NLA argues that this will help to facilitate the disposal of poorly performing property investments, and diversify people’s financial investment portfolios. The group has sent costings to the Treasury, which show that this measure does not need to be as expensive as some fear.

Extend business asset rollover relief to allow restructuring of portfolios

The organisation argues that this will enable increased property sales and greater mobility between tenures, while allowing landlords to reduce the gearing of their portfolios, thereby protecting against market shocks and improving stability.

Reintroduce the Landlords’ Energy Saving Allowance (LESA)

From April 2018, new tenancies will not be able to be granted for properties with Energy Performance Certificate (EPC) ratings of F or G. Following the collapse of the Green Deal, the NLA is urging the Government to help mitigate the major capital costs that over 300,000 landlords are facing in order to stick to the law.

What do you think of the NLA’s Budget wish list?

Landlords Warned to Not Get Caught Out by Rogue Tradespeople

Published On: February 2, 2017 at 9:24 am

Author: Em Morley

Categories: Landlord News

Tags: maintenance,private rental sector,repairs,tradespeople

Landlords and letting agents have been warned to not get caught by rogue tradespeople operating in the private rental sector.

Landlords Warned to Not Get Caught Out by Rogue Tradespeople

The Association of Independent Inventory Clerks (AIIC) urges landlords and letting agents to be increasingly aware of being ripped off by rogue tradespeople who conduct maintenance work on their rental properties.

The organisation warns that some rogue tradespeople and contractors take advantage of those letting properties to private tenants by either overcharging or not completing jobs to a sufficient standard.

The AIIC claims that employing the wrong contractors could cost landlords and letting agents thousands of unnecessary pounds every year.

It refers to a case from a few months ago, when a landlord complained that a plumber had charged £90 to tighten a valve connection in a leaking radiator, a job that, according to the landlord’s tenant, had taken just two minutes to complete.

The Chair of the AIIC, Patricia Barber, says: “This is a problem that seems to be becoming more common, but it’s something that landlords and agents can address easily.

“Before employing any tradesperson, you should ask for a quote. You can also ask them to provide an updated quote once they have visited the rental property and assessed the situation.”

She also suggests: “What’s more, by informing a tradesperson of your maximum spend or budget, you can alleviate the worry of being hit with an unexpected bill. It is then up to the contractor to decide whether or not they want to take on the job.”

The AIIC also advises landlords and letting agents to avoid rogue tradespeople by using resources such as checkatrade.com, ratedpeople.com, and trustatrader.com.

Barber recommends: “As well as using these sites when looking for a contractor, you should also leave reviews when work has been completed. This will help others to make decisions and contribute towards keeping these online directories as accurate and up to date as possible.

“When letting a property, you will always need to put aside some money for essential maintenance jobs. However, choosing the right contractor, and making sure you receive quotes and inform them of what you’re looking to spend could significantly reduce your annual costs.”

If you’ve had problems with rogue tradespeople in the past, follow these tips!

More calls for the Government to reconsider tax changes

Published On: February 1, 2017 at 3:32 pm

Author: Em Morley

Categories: Finance News

Tags: landlords,mortgage interest tax relief,Stamp Duty,tax,tax changes

The Residential Landlords Association has once again called on the Government to reconsider its tax changes, as announced by former Chancellor George Osborne.

Instead, the Association wants the Government to utilise the extra revenue raised from the surcharge stamp duty to abolish proposed reforms to mortgage interest tax relief and stop landlords from having to increase rents.

Impact

Despite a number of experts predicting that Section 24 will have an adverse impact on the Private Rental Sector, the Government is still pressing ahead with its proposed changes.

The National Landlords Association claims that roughly 440,000 basic-rate taxpayers, or 2 million landlords-will be forced to move up a tax bracket from April this year.

New figures from HMRC reveal that the Government has raised £1.19bn in tax, £560m more than forecast for the entire year. Should this continue, revenues for the entire year will move past £1.58bn, nearly £1bn more than forecasted. This, the RLA believe, gives landlords room for a break.

A recent ARLA survey showed that 58% of landlords are considering reducing their investment in rental properties due to the proposed tax changes. 66% predict that the tax changes will put upwards pressure on market rents.

More calls for the Government to reconsider tax changes

Windfall

RLA Policy Director, David Smith, said: ‘In raising nearly twice as much in just nine months as the tax was predicted to make in one year this Stamp Duty windfall gives the Government a chance to back the rental market and support the development of new homes which we desperately need.’[1]

‘At no stage has evidence been published to support the assertion that landlords are taxed more favourably than homeowners, or that they are squeezing first-time buyers out of the market. Assessments by the Institute for Fiscal Studies and the London Schools of Economics contradict the Treasury’s position completely. It is also nonsense for HMRC to suggest that one in five landlords will be affected by the mortgage interest changes, when what matters is the number of properties affected,’ he continued.[1]

Concluding, Mr Smith said: ‘The government has received far more money than it expected. We urge them to use this to support the country’s tenants and undertake a fuller impact assessment of a policy that has the potential to cause untold damage to the rental market.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/1/government-urged-to-reconsider-changes-to-tax-relief-for-residential-landlords