Written By Em

Em Morley

Are landlords set to shun letting agents?

Published On: November 28, 2016 at 10:24 am

Tags: Autumn Statement,buy-to-let landlords,letting agent fees,letting agents

Buy-to-let landlords are once again under scrutiny, following last week’s decision in the Autumn Statement that letting agent fees will be banned.

Many peers feel that rents will rise as a result of the changes, with landlords looking to raise extra funds to cover their extended outgoings.

Rip-off agents

An industry peer has suggested many landlords should consider ditching letting agents as a result, particularly those that charge ‘rip-off’ fees.

Simon Lambert, editor of This is Money, observed: ‘Landlords are always ripe for a kicking in some circles, so it should come as no surprise that they were swiftly painted as potential villains in the ban on tenant fees.’[1]

‘The theory on the news that Chancellor Philip Hammond would ban tenant fees in his Autumn Statement was that buy-to-let owners would respond by passing on higher costs through rent rises,’ he continued.[1]

Anger

Continuing, Lambert said that buy-to-let landlords have a right to be, ‘as angry as tenants over letting agency fees.’[1]

‘Many landlords pay handsomely for letting and management already and the fees they pay are meant to cover many of the things that some unscrupulous letting agents also charge tenants for. A check with their agent on the level of double-charging going on would leave a landlord as grumpy as their tenant,’ Lambert observed.[1]

Are landlords set to shun letting agents?

Lack of service

Mr Lambert also highlighted the fact that many landlords are sticking with letting agents who do not deliver a sufficient service.

He said: ‘Ask any long-term landlord and they will tell you that the difficulty is in finding a good letting agent, who takes all the worry of sorting any problems for you off your hands. They will have a network including plumbers, electricians, and handymen or women, who can get things fixed ASAP, do essential maintenance swiftly and at a fair cost and keep your tenants happy.’[1]

‘Happy tenants are the key to buy-to-let success, as unless you are in a hot property area such as London where places rent instantly, its vital to avoid rental voids. Even one month of your property sitting unlet but your mortgage and other bills needing paying, proves expensive. Yet many landlords stick with letting agents who don’t do a great job for them, overcharge them for maintenance, double-charge them and tenants for the same work, and upset tenants with demands for unfair fees.’[1]

Concluding, Lambert told landlords: ‘If your agent can’t explain exactly what the charge is for and justify the cost and why you aren’t already paying for this, leave.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/11/are-more-landlords-about-to-ditch-letting-agents-and-go-it-alone

Majority of Brits Unhappy with Buckingham Palace’s £369m Renovation Project

Published On: November 28, 2016 at 10:13 am

Author: Em Morley

Categories: Property News

Tags: Buckingham Palace,London,refurbishment,renovation,tax

The majority of Britons are unhappy with Buckingham Palace’s £369m renovation project, following the Treasury’s announcement of the plans last week.

Majority of Brits Unhappy with Buckingham Palace’s £369m Renovation Project

To fund the 10-year scheme, the Queen will be given a 66% pay rise, which will last for the entirety of the renovation project. However, this news has resulted in a backlash from the general public and has left UK taxpayers questioning who should pay for the work.

Consequently, a petition requesting the Queen to pay for the refurbishment herself reached its target in a matter of days, attracting more than 140,000 signatures.

Conducting its own research on the controversial scheme, leading home services marketplace Plentific.com has found that two out of three UK taxpayers are unhappy with the costs.

The firm revealed that 68% of Britons are unhappy with the £369m price tag. As the home of Buckingham Palace, Londoners appear more supportive of the renovation project, with just 61% saying they are unhappy with the costs. Plentific believes that this may be due to those living in the capital being less surprised by the level of funding needed for the work.

Similarly to the sentiment felt around the EU referendum, Scotland has taken a distinctly negative stance and has proven to be the most unsupportive country in the UK, with 81% saying they are unhappy with the costs. 82% of residents in Edinburgh disapprove the costs, whilst Glaswegians are more sympathetic, with 77% feeling unsatisfied.

Bristol has shown the highest level of support throughout the country, with just 54% feeling unhappy with the £369m investment. Brighton, too, shows more understanding of the costs, at 59%.

The least happy locations in England are: Nottingham, 78, Liverpool, 73%, Sheffield, 72%, and Leeds, 70%.

The spokesperson for Plentific, Stephen Jury, comments: “Whilst the price for upgrading seems steep, these refurbishments are essential to the safety of the building and will allow Buckingham Palace to continue to attract tourism and generate revenue.

“For the average UK taxpayer, the cost obviously comes across as a shock, which is highlighted by our research with the majority not being happy with the bill.”

How do you feel about the £369m renovation project?

The Chancellor Missed an Opportunity in the Autumn Statement, Insists the SLC

Published On: November 28, 2016 at 9:27 am

Author: Em Morley

Categories: Landlord News

Tags: Autumn Statement,letting agent fee ban,letting agent fees,mortgage interest tax relief,Stamp Duty

The Society of Licensed Conveyancers (SLC) has offered a mixed reaction to the measures announced in last week’s Autumn Statement, which was delivered by Chancellor Philip Hammond.

The Chancellor Missed an Opportunity in the Autumn Statement, Insists the SLC

Firstly, the SLC welcomed the news that the Land Registry will remain in public ownership, which the society has lobbied for over several years. It claims that this will take away any uncertainty for the CEO of the Land Registry, Graham Farrant, and his team, so that they can concentrate on increasing the coverage of the register and eliminating the backlogs in first registrations and more complex transactions.

However, the SLC was disappointed that the Chancellor did not take the opportunity to reverse the “very damaging reforms” brought in by his predecessor, George Osborne, on private landlords.

The increased Stamp Duty obligation and reduction in mortgage interest tax relief will not only increase rents for tenants, particularly at the lower end of the market, warns the SLC, but will also contribute to a slowdown in the housing market in terms of transaction levels.

The Chairman of the SLC, Simon Law, responds to the Autumn Statement: “We are delighted that the Land Registry is going to remain in public ownership and we look forward to working with their executive in a number of areas that should improve the overall home buying and selling experience for consumers.

“We are less than happy, however, that the Chancellor has not heeded calls to reverse the very damaging attack made by George Osborne on private sector landlords. The level of housing market transactions will be adversely impacted in a way that is damaging to the economy, and will ultimately put up rents for hard-pressed tenants.”

In addition, the SLC is not convinced of the benefits of the Chancellor’s plan to ban letting agent fees for tenants.

“At the end of the day, these charges will end up being paid by tenants in rent and will thus be less transparent than when applied directly,” Law believes. “It will be more difficult to identify the behaviour of rogue agents.”

Do you believe that the letting agent fee ban will have a detrimental effect on the private rental sector?

What regions have the highest and lowest letting agent fees?

Published On: November 25, 2016 at 12:31 pm

Author: Em Morley

Categories: Property News

Tags: Autumn Statement,Buy-to-Let,fees,letting agent fees,tenants

New research from online letting agency Urban.co.uk has claimed to reveal the highest and lowest letting agent fees charged to tenants across the UK.

The investigation comes after the controversial announcement by the Chancellor in the Autumn Statement that letting agent fees are to be banned.

Fees highs and lows

Urban said it accessed 400 agencies in total-including some online-in more than 150 towns and cities in the UK.

Data from the report indicates that on average, the five most expensive areas for tenant fees are in:

Basingstoke-£621.67

Slough-£543.33

Cirencester-£535.00

Reading-£530.62

Alnwick-£530.31

On the other end of the scale, the five cheapest areas for letting agent fees were found to be in:

Harbrough-£136.67

Worksop-£139.00

Market Harborough-£153.00

Lees-£162.98

Newham-£164.00

Costs include the preparation of a tenancy agreement, contract fees, referencing, Right to Rent checks and guarantor fees.

What regions have the highest and lowest letting agent fees?

Oddities

As part of its research, Urban looked at what some agencies charged tenants for and found some shocking results. These include:

£200 to change the name on an agreement
£40 to live with your partner, if not married
£7.50 to access keys
£90 to move in on a Saturday
£25 for extra copies of the tenancy agreement

Adam Male of Urban, noted: ‘The additional costs that some tenants are required to pay can often be easily explained however, and this is something that letting agents often struggle to get across.’[1]

‘For instance, speedy moving and name changes on tenancy agreements can be due to additional solicitors fees, so we recommend tenants ask up-front what fees they might be subject to and compare them with others in the local area to ensure they get the best deal,’ he added.[1]

[1] http://www.mirror.co.uk/money/750-pick-up-key-40-8186288

A Year of Two Halves for Buy-to-Let Borrowing

Published On: November 25, 2016 at 11:34 am

Author: Em Morley

Categories: Finance News

Tags: buy-to-let borrowing,buy-to-let finance,buy-to-let sector,mortgages

It’s been a year of two halves for buy-to-let borrowing, according to the latest financial results from Paragon Mortgages.

A Year of Two Halves for Buy-to-Let Borrowing

The firm reported a strong performance across all of its business lines in the year to October, contributing to a 9.1% increase in underlying profits, totalling £146.9m.

The Director of Mortgages at the group, John Heron, comments: “This was very much a year of two halves for buy-to-let, with very strong completion levels being seen in the run up to the Stamp Duty increase in April, followed by a commensurate reduction in activity levels across the market from April.

“However, our pipeline of new business is now gathering momentum with an increase of approaching 20% in October. Much of this is due to the success of Paragon Bank in providing us with diversified funding, allowing us to deliver a series of competitive products, which is driving an increase in application volumes.”

He continues: “In particular, we are seeing an improvement in the professional landlord segment of the market, a sector we are well positioned to satisfy, given our extensive experience of meeting their individual requirements.

“Whilst the buy-to-let market has had a challenging year, we continue to see the potential the sector has to offer. With strong rental demand, there will continue to be a growing need for professional landlords to provide quality private rental accommodation and, with our 20 years’ experience in the market, we remain very well positioned to work with these landlords.”

While buy-to-let borrowing may have had a mixed year, how has the rest of the market fared?

The British Bankers’ Association (BBA) has also published its High Street Banking Statistics for October.

It found that house purchase approval numbers are 10% lower than in October last year, while they’ve dropped by 4% in the first ten months of the year when compared to the same period of 2015.

However, the Chief Economist at the BBA, Dr. Rebecca Harding, says: “Mortgage approvals ticked up a little October. There has only been a relatively modest increase in activity since the Bank of England cut rates in August.”

More professional landlords are need, claims mortgage lender

Published On: November 25, 2016 at 11:09 am

Author: Em Morley

Categories: Landlord News

Tags: buy to let investors,Buy-to-Let,landlords,rental properties

A specialist lender has issued a positive outlook for the buy-to-let market, despite the raft of legislations threatening to drive many landlords away.

Paragon Mortgages, which has just posted a 14.2% fall in buy-to-let completions in the year to September, believes the market will pick up sharply. This is due to the fact more rental properties are required to meet demand.

Challenges

John Heron, director of mortgages at Paragon, noted: ‘Whilst the buy-to-let market has had a challenging year, we continue to see the potential the sector has to offer.’[1]

Mr Heron observes that 2016 has been a year of two halves for buy-to-let. Completion levels were very strong in the run up to the stamp duty increases seen in April, since when, as Heron says, there has been a ‘commensurate reduction in activity levels.’[1]

‘With strong rental demand, there will continue to be a growing need for professional landlords to provide quality private rental accommodation and with our 20 years’ experience in the market, we remain very-well positioned to work with these landlords,’ Heron stated.[1]

More professional landlords are need, claims mortgage lender

Autumn Statement

The challenges facing buy-to-let landlords are likely to heighten, following this week’s Autumn Statement. Many have been left frustrated with Chancellor Hammond’s failure to cut or amend stamp duty or the proposed mortgage interest tax relief.

However, the main move was to introduce a ban on letting agent fees. This has led to fears that these charges will be passed onto tenants, in the form of higher rents.

[1] https://www.landlordtoday.co.uk/breaking-news/2016/11/strong-rental-demand-means-growing-need-for-professional-landlords