Some believe tenants with criminal convictions are less likely to pay rent, and more likely to cause damage.
However, is it really that simple?
Should you let to tenants with a criminal record? Let’s take a closer look to help you weigh up the different factors.
Why Do Some Landlords Have Their Reservations?
First things first, let’s explore why some landlords have reservations about letting to certain tenants.
All private landlords are looking to safeguard their investment. This means making sure a tenant:
- Can pay rent on time
- Has the right to rent in the UK
- Is unlikely to cause damage to their rental property beyond fair wear and tear
For this reason, many run tenant reference checks to ensure someone doesn’t have a criminal history.
However, someone with a criminal past may not necessarily be a bad tenant. This also works vice versa.
How to Find Out If a Tenant Has a Criminal Past
Asking a tenant for a basic disclosure certificate will show their criminal record. Also, certain reference checks can give you the information you’re looking for.
What to Consider When Running Criminal Record Checks
If you run a background check and discover a prospective tenant has a criminal record, there are some key factors to consider:
What Crime Was Committed?
Some crimes are far more serious than others. You should consider the severity of the offence before deciding whether to rule out a potential tenant or not.
You should also weigh up whether this crime would impact them as a tenant. If someone was caught growing cannabis in your property, for example, this is grounds to serve them with a Section 8 eviction notice.
How Many Crimes Were Committed?
Was the crime a one-off offence or multiple? This should give an indication into whether they’re a reformed character or not. An isolated incident is very different to a long rap sheet.
How Long Ago Was the Crime?
Time is also a significant factor that you should weigh up. How long ago was their crime committed?
Arrests vs. Criminal Convictions
If considering a potential tenant, you need to ensure you only look at convictions – not arrests. Being arrested for something does not make someone guilty of that crime.
Is Anyone Else at Risk?
If you’re letting a HMO, you need to make sure your other tenants won’t be at risk. This involves looking at the nature of the crime; violent offences are very different to others.
Can They Still Pay Rent?
As a landlord, your primary concern will often be to ensure your investment is secure.
Has this criminal conviction prevented them from holding down long-term employment? If so, this may impact their ability to keep up with rental payments.
This is why thorough credit checking is essential.
Is Your Rental Property at Risk?
Does the prospective tenant have a history of arson, or vandalism? This may make you think twice about whether to let to them.
Regular landlord inspections can help you ensure your property is being looked after as agreed.
Tips for Letting to a Tenant With a Criminal Record
If you’ve decided to proceed, here are some tips:
Landlord Insurance
Tenants with unspent criminal convictions can cause havoc for landlords, as they can make their insurance invalid.
You’re not legally required to check if your tenant has a conviction. However, many insurance providers insist you inform them if anyone with a conviction is living in the property.
Some insurance providers may refuse the tenant altogether, while others may increase your premium.
Run Thorough Checks
When it comes to a tenant with previous convictions, being thorough is key.
Don’t take any information at face value, always gather the facts for yourself. If anything seems unclear or vague, ensure you get to the bottom of it.
Meet the Tenant More Than Once
Form your own opinion of the tenant! Remember, you’re letting to a person, so building a relationship is highly important.
Meet them multiple times if possible, and decide for yourself whether you’d like to let to them.
To Let or Not to Let?
While many landlords have their reservations, there are some undeniable positives to letting to tenants with a criminal history:
- May encourage a longer-term tenancy, particularly if they’ve struggled to find somewhere to rent previously
- Builds trust with your tenant, helping to create a positive relationship
- Encourages the tenant to stay loyal, reducing the risk of void periods
You need to weigh up what’s right for you, considering all the factors mentioned above.
Need Help Safeguarding Your Property?
Regardless of who you let to, you need to ensure your property is being looked after properly.
From check in to check out, our property inventory services can help. We’ll make sure you’re compliant with safety regulations. We’ll also reduce the risk of disputes and ensure the terms of the tenancy agreement are being met! Hassle-free renting has benefits for everyone – so we’ll help you get there.
Ending a tenancy can be awkward for both tenants and property professionals. Dealing with tenancy deposit returns, outstanding rent and resolving disputes can take time and a lot of effort. So, how can tenants and landlords alike ensure the end of tenancy goes smoothly?
No Letting Go’s chief operations officer, Lisa Williamson recently joined Richard Blanco on his podcast ‘Inside Property’ to discuss the types of issues that can arise and how to resolve them through unbiased, end of tenancy services.
Lisa was joined by Suzy Hershman, head of dispute resolution at My Deposits, and Al McClenahan, the director of Justice4Tenants to get a full picture from all sides of the story.
Here is a roundup of the key insights that came out of the programme;
Start as You Mean to End
Lisa’s top tip on ending a tenancy well is to determine a clear position from the start. The way to do this is through a well thought out inventory including detailed but concise information, clear photographs and a comprehensive list of contents and condition.
Creating a tenancy format which is easy to read by both parties is essential for avoiding confusion at the end of the tenancy.
Another tip for landlords from Lisa is to ensure that tenants sign the inventory report to avoid deduction disputes during check out.
An Unbiased Outlook is Key
One question that arose in the podcast was whether landlords should create their own inventory reports.
While it’s completely fair for a landlord to perform their own survey, they run the risk of using emotional language which can be interpreted in different ways.
This is where an independent inventory service can resolve issues. No Letting Go inventory reports include a glossary of terms to determine the condition and cleanliness of items in the property. For example, rather than a landlord using the word ‘immaculate’ to describe a piece of furniture which could come across as biased or open to interpretation, instead ‘professionally clean’ is a clearly explained term in the NLG glossary.
Another benefit of using a professional, unbiased property inventory service is that in the case of a dispute over deposit returns, judicators can clearly understand the benchmarks.
Are Pre-Check Out Meetings A Good Idea?
As an active landlord himself, Richard highlighted the benefit of arranging pre-check out meetings with tenants to go over what is expected of them during the moving out process.
This all sounds well and good, but the question is, who will pay for it? Landlords and tenants may be reluctant to fork out this extra cost, but it could save money further down the line.
Alternatively, providing tenants with an end of tenancy letter detailing all the tasks that need to be completed before moving out is a great way to prevent confusion over where responsibilities lie. This can include the date and time of the key handover and what needs to be cleaned.
End of Tenancy Property Cleaning
As the head of dispute resolution at My Deposit, Suzie Hershman has a lot of experience dealing with the common issues affecting landlords and tenants during the checkout process.
According to Suzie, cleaning comes top of the list when it comes to end of tenancy disputes.
The resolution is simple. Start with an inventory report which plainly states the condition of the property and how it is expected to be maintained. For example, if the property has a garden, the inventory needs to clearly state that the grass needs to be cut or the paving de-weeded and power washed before leaving the property.
Other issues that can arise include whose responsibility it is for window cleaning and whether professional carpet cleaning needs to be undertaken.
The main rule of thumb for tenants, is that the property needs to be returned in the original state as at the start of the tenancy. This may involve hiring an end of tenancy cleaning service (make sure you keep the receipt as evidence) or giving the property a thorough clean yourself. Either way, ensure you leave on the last day of your tenancy confident everything looks the same as it did when you moved in!
Fair wear and tear can be a bit of a grey area when it comes to cleaning. Suzie recommends that landlords should think of the items in their property as having a lifespan. A carpet or decor has an average lifespan of 5 years, which needs to be taken into consideration during the checkout report.
Managing the Landlord-Tenant Relationship
According to Al from Justice4Tenants, the main reason for the breakdown of the landlord- tenant relationship at the end of a tenancy is disputes over deposit deductions.
Al attributed this to poor inventories which leave too much room for interpretation and miscommunication, which is more common when landlords create their own.
Another common reason for strained relationships is when tenants are in arrears at the end of the tenancy agreement. To minimise conflict, Al recommends that tenants are as open and communicative with their landlord about their financial difficulties to help landlords remain understanding until the issue can be resolved.
However, when landlords view their role purely from an investment perspective and ignore the human side of the relationship, this is when disputes are likely to arise. The lesson? Landlords who are more understanding and willing to negotiate are likely to have better relationships with their tenants, resulting in a smoother parting.
How Will the Letting Agency Fee Ban Effect End of Tenancy?
There has been much discussion over what changes the letting agency fee ban will bring to the industry. However, for now, Lisa doesn’t see much change to the way check out reports will be processed.
Currently, landlords usually pay for the inventory, and for either check-in or check-out services while the tenant pays for the other. This means there is only one cost that needs to be recuperated by landlords.
According to Lisa, most landlords and tenants can see the advantages of having these services managed by independent professionals.
Unbiased End of Tenancy Services from No Letting Go
To ensure the end of a tenancy goes as smoothly as possible and you retain a positive relationship throughout, using an independent property service can help resolve issues and disputes before they arise.
No Letting Go provides all the documentation needed at the start and end of a tenancy to determine how much money is deducted from the deposit. Using the latest technology, No Letting Go can advise against fair wear and tear and create reports to ensure you are fully compliant with regulations.
To see the full list of services on offer, head to the No Letting Go services page.
Achieving a high rental yield is one of the main goals for successful landlords. In order to cover the costs of mortgage repayments, repairs and maintenance, an adequate rental yield is essential to stay afloat.
Although you may feel constrained by property location or property prices, there are ways to maximise profits and cut outgoings.
From making simple renovations, to targeting specific tenants, here’s some straightforward advice on how to increase rental yield on your rental property.
What Does Rental Yield Mean?
As a landlord, you’ll be more than familiar with the importance of rental yields. For anyone new to the game or thinking of taking the plunge into property investment, here’s a simple definition.
Rental yield is the annual return on investment you make as a landlord on a buy-to-let property. It’s the remaining amount of money left over after rent, divided by the value of the property and is expressed as a percentage.
How to Work Out Rental Yield on Rental Property
To work out the rental yield of your property, first deduct all annual expenses and outgoings from the annual rental income, then divide this number by the purchase price of the property. Next, times this number by 100 to find the percentage yield.
Alternatively, find a free rental yield calculator online to do the hard work for you.
What is a Good Rental Yield?
In order to comfortably cover outgoings, a rental yield of 8% or more is deemed good.
However, the average rental yield differs vastly depending on location. For example, cities like Liverpool and Nottingham enjoy higher rental yields of up to 12%, while London is more challenging and tends to stay around 4 – 5%.
Decide on a Tenant Profile
Having an ideal tenant profile in mind makes it easier to tailor your property to the needs and desires of tenants. By offering an attractive property to specific renters, you’ll be able to charge premium prices and stand out from the crowd.
For example, if you are renting to young professionals, it’s worth choosing properties in areas with good transport links and furnishing the property with convenient mod-cons.
Whereas families are more interested in space, excellent local schools and extra bedrooms.
It’s impossible to please everyone. Maximise rental yields by catering to a specific tenant group and provide them with what they really want.
Location, Location, Location
As always, location is key when it comes to improving rental return.
Picking an up-and-coming area is a good idea, as property purchase prices are lower and there is potential for increased rental income as the area expands. Somewhere with good transport links, access to great schools and a growing number of bars and shops is a safe bet.
Go Green for Tenants
With sustainable living becoming increasingly popular, improving insulation and making green changes to your rental property could strengthen the appeal to certain tenants.
Improving the energy efficiency rating of your property not only saves you money on energy bills,but is also a big deciding factor for potential tenants.
Think About Facilities
Equipping your property with high quality, time-saving facilities such as dishwashers, driers and high-speed Wi-Fi will attract more tenants and place your rental property ahead of the competition.
Think about what your ideal tenant profile wants out of a rental property and go from there.
Can You Add Another Bedroom or Bathroom?
Adding a second, third or fourth bedroom to your rental property is a guaranteed way of boosting rental yield.
If a property has a large living space that isn’t entirely necessary, turning it into a bedroom could drastically improve cash flow! Just take care to comply with bedroom regulations, especially if you plan to turn it into an HMO property.
A second bathroom is another way of adding value. Although this requires a little more upheaval, the results can be well worth it, especially in larger properties.
Keep Things Fresh
If larger scale renovation is out of your budget, simple, affordable updates such as new tiling in the bathroom or a fresh lick of paint can work wonders in attracting the best tenants.
The more you can do to make your property attractive to potential tenants, the more rent you can responsibly command.
Maximise Space for Maximum Yields
Another way to add value and appeal to renters is to maximise every inch of space in your property.
This doesn’t have to mean adding extra bedrooms. It can be something as simple as providing inbuilt cupboards and clever storage spaces. This is especially important if you’re targeting growing families.
Consider Allowing Pets
Flexibility is a trait highly valued by prospective tenants. From allowing minor aesthetic alterations to saying yes to pets, remaining open to tenants helps grow your yield in the long run.
Rental properties which allow pets tend to be few and far between which means they are able to command more rent- another easy way to increase your rental yield!
Avoid Vacant Periods
Naturally, extended vacant periods will have a negative impact on your rental yield.
Asking current tenants what their plans are well in advance of the end of a tenancy is one way you can avoid this. Early preparation means you can start advertising for new occupants quickly.
In the case of an extended void period, it may be worth lowering the rent requirements to encourage tenants and minimise losses.
Make Regular Rent Reviews
It’s important to keep up with the rest of the property market. Keeping a finger on the pulse and raising or lowering rent as needed is essential for maintaining and increasing rental yield.
Factors such as a new school in the area can dramatically increase rent prices, so don’t miss out on opportunities to cash in on your property investments.
Assess Your Outgoings
Taking a regular look at all of your outgoings is an important part of managing your finances. You may find that a few simple changes could be surprisingly profitable.
Mortgage rates, for example, are always changing, and it’s possible to find good deals on property insurance on comparison websites.
Keep your eyes peeled for deals to cut costs and improve rental yield.
Keep Up to Date with Regulations
Part of being a responsible landlord includes keeping up to date with current health and safety regulations. Good maintenance of your rental property results in long-term tenancies and increased interest from renters.
Save Time and Money with A Professional Property Service
Instead of spending your time as a property manager, answering queries and sorting out viewings and check ins, allocating tasks to property professionals can help streamline your business, saving you time and money.
No Letting Go provide comprehensive property reports and essential services such as inventory management to help landlords protect their investment and increase yields.
For more information on how No Letting Go could help, visit our services page here.
There tends to be a focus on the need for potential tenants to make a positive first impression to secure the best rental properties. But making a good impression is just as vital for landlords and letting agents.
To attract reliable and responsible tenants, property professionals need to demonstrate their value to establish trust and secure an agreement.
Creating a positive first impression can determine what kind of relationship you’ll have with your tenant moving forward, not to mention positioning your property as an attractive prospect for renters.
If you’re a letting agent, property professional, or landlord, we’ve got some friendly guidance on how to give a good first impression to tenants and establish trust from the get-go.
What are Tenants Looking for in a Landlord or Letting Agent?
To make the right impression, it’s helpful to think about what a tenant wants from the person or company managing their rental property.
Top of the list are reliability, honesty and being easily reachable. Whether it’s at the first viewing, at the lettings or estate agency office or the first meeting between tenant and landlord, follow these tips to make a great first impression:
Be on Time
An obvious point to start with. Tenants want to know the person managing their home is reliable and can be depended upon in an emergency. Being late to the first meeting already puts you on the back foot.
If the first meeting is an initial house viewing, it’s worth getting there a few minutes early to ensure everything is in place and the property is looking its best.
Dress Appropriately
Giving an overall impression of professionalism goes a long way in securing a tenancy agreement.
One simple way of achieving this is to dress in business-casual attire.
Know Your Stuff
As the main point of contact for tenants, you need to demonstrate knowledge about the property and local area to build trust. Before the first meeting, make sure you’ve got all the answers to potential questions to hand.
Common questions that might be asked by potential tenants include;
- Who are the current utility providers?
- What is the council tax band for this area?
- What day are the bins and recycling collected?
- Where is the fuse box?
- What are the neighbours like?
- What is the local area like?
Being able to answer these questions thoroughly and confidently will help to build a positive impression and demonstrate your experience and professionalism.
Friendly and Professional Body Language
Body language is key to making a good impression in any situation. From job interviews to meeting people for the first time, facial expressions and gestures really count.
Shake your prospective tenants’ hand while maintaining eye contact, smile, and try to display confident body language to really impress.
Stay in Contact with the Neighbours
Being in the position to introduce prospective tenants to the neighbours, or simply tell them who they will be living next door to, can go a long way in demonstrating your dedication to property management.
What are Tenants Looking for in a Property?
In addition to the way you present yourself, the way you present your rental property also has a huge impact on tenant’s initial impression. Here’s how to show your property in the best light:
Market Your Property Right
Most rental property marketing happens online these days. Be sure to regularly check and update any channels your property is advertised on to keep up a positive impression for renters.
A picture really can tell a thousand words and people expect to see clear, professional images when browsing for properties online. Any property with minimal or bad quality images will likely be dismissed instantly.
Include lots of pictures of all parts of the property and try to take them on a sunny day to show off your property in the best light.
If you’re a busy landlord or property professional, ensure your property looks the part online with a professional property appraisal. This service includes high quality photos and a record of essential details for marketing purposes, all uploaded directly to your platform. The easy route to impressing potential tenants!
Managing feedback is also important. Always reply to any complaints or queries online so that potential tenants know you are reliable and quick to respond.
Outward Appearances Matter
We’ve all heard the phrase ‘don’t judge a book by its cover’, but in reality, first appearances are important.
Make sure the exterior of your property is up to scratch. An overgrown front lawn, overflowing bins and scratched paint are likely to put people off before they’ve even stepped through the door.
Make Sure the Interior Lives Up to the Dream
When showing a prospective tenant around a property for the first time, they’re trying to imagine themselves living there.
Make sure everything is clean and tidy with minimal clutter to give the tenants as much of a blank canvas as possible to project their own visions for the future.
Consider A Moving In Gift
Whether it’s a simple, handwritten welcome card or a bunch of flowers. Providing a small gift is an easy way to demonstrate that you’re a thoughtful landlord or letting agent.
If you’re an agency managing several properties or a landlord with a large portfolio this may not be feasible. For smaller landlords however, it could be a well-received gesture that goes a long way in developing a positive ongoing relationship.
You need to assess whether a gift is appropriate from case to case. At the very least, provide an information folder with essential details about the property such as relevant contact numbers and rubbish collection days.
Ensure All Health and Safety Checks are in Place
If you can demonstrate that you are up to date with gas safety checks and Co2 regulations, your tenant will know you take your role seriously.
For landlords, demonstrating your responsibilities are being fulfilled puts tenant’s minds at ease. For example, landlords must ensure that smoke alarms are tested and working on every floor of a property. No Letting Go provide comprehensive reports which include a smoke and carbon monoxide safety section that will guarantee you meet all the requirements.
Tenants in the know will expect to see evidence and a thorough report will quell any potential reservations.
Invest in a Professional Property Inventory
Providing your tenant with a comprehensive, photographic inventory report sends the message that you don’t take shortcuts.
No Letting Go is the first choice for all types of property reporting for landlords and letting agents alike. To find out how we can help to position you as a first choice for tenants, browse the rest of the property management services on offer here.
The way you do your taxes is changing.
Say goodbye to piles of paperwork, the tax system is having a digital makeover.
Although changes to routines can be worrying, these alterations are being implemented to make life easier for businesses and self-employed individuals. The proposed scheme to completely digitise the tax system by the end of 2020 aims to make taxes more accurate, efficient and easier to manage.
As a landlord, you’ll need to be aware of these changes and how they affect you, in order to prepare for digital taxes becoming mandatory in April 2019. Here’s everything you need to know about making tax digital for landlords.
What is MTD?
Making Tax Digital, or MTD, is a government scheme to overhaul the tax system to make it completely digital by the end of 2020. This means that from April 2019, VAT tax records and VAT returns will be managed online.
Will MTD Affect Me?
Any VAT-registered business with a taxable turnover above the VAT threshold will have to make these changes.
So, if you are a landlord with an annual rental income of over £10,000, then the MTD changes will apply to you from April 2019. With UK rental prices rising, this is likely to affect most landlords in the UK.
The Making Tax Digital timeline commences on the 1st April 2019, when the changes will become mandatory for all customers, excluding a small number of customers with complex requirements which are being deferred until October 2019. (These types of customers include trusts, non-profits and public sector groups).
The new process will require self-employed individuals and landlords to:
- Use specific software or apps to keep track of their records
- Update HMRC every quarter through a new digital tax account
- Provide a full annual declaration at the end of each year
Further information can be found in the Finance Act, 2017.
The Income Tax Pilot Scheme
The government already has an income tax pilot scheme in place, which self-employed businesses or landlords can use voluntarily.
This scheme allows users to test out the MTD compatible software to store their digital records and send income tax updates to HMRC in place of filing a self assessment tax return.
Voluntary users can choose from a number of software options, sending a summary of income and expenses to HMRC every 3 months and sending a full report at the end of the year. You can even pay bills as you go and ask your accountant or bookkeeper to send the updates for you.
A Closer Look at the HMRC Making Tax Digital Scheme
Many landlords already choose to manage their taxes and accounts digitally through cloud based apps and software programmes.
Once the changes come in, these methods and software applications will need to follow new regulations. HMRC are not building their own software programme but will provide a list of approved software companies, some of which will be free of charge. You will still be able to use your current software system, as long as it complies with the new system.
Users will be required to communicate with HMRC via their Application Programming Interface (API) platform and submit VAT returns using information from these digital records.
This software should be able to calculate your return automatically- saving a whole lot of time and effort.
If you currently use spreadsheets to manage your taxes, it may be worth switching to a software solution now. Although spreadsheets are allowed if they comply with the new regulations, it might cost you more money to produce quarterly reports.
Your digital tax account will allow you to view and access all of your tax information in one handy place online. An agent services account grants accountants or other financial professionals you may employ access to relevant tax details.
Is the MTD Scheme Compulsory for Landlords?
Unless your annual income from your rental property and trade combined is under £10,000 or you are unable to partake in digital programmes due to disability or age, this change is compulsory.
It is expected that late fines will be implemented if you fail to file reports on time once the scheme is established.
MTD for Multiple Properties
If you are a landlord of multiple properties, you will only be required to provide income and expenditure for your investments as a whole.
However, it’s best to keep a record of individual properties to manage and assess the income of various rental properties you may own.
The Benefits of MTD for VAT
According to the latest edition of the tax gap report, there was a gap of around £33 billion in the last tax year! This clearly shows that something isn’t right and suggests that lots of people are making errors when it comes to submitting their records.
By digitising the way tax records are stored and reported to HMRC, the scheme hopes to make tax reporting far more accurate and easier for stakeholders to complete. Sending this information directly to HMRC online will hopefully minimise any mistakes that currently occur during the exchange of information.
For busy landlords who manage multiple properties, it can be hard to stay on track of receipts and invoices. Implementing a digital system which allows you to add information on the go via mobile applications will help prevent taxable claims from escaping.
The digital system will also allow you to see approximately how much tax you owe ‘as you go’ rather than waiting to find out at the end of the tax year.
By seeing all of your reports for individual properties in one place, it will be easier to manage your portfolio and determine which properties generate the best return.
Get Ready for Making Tax Digital with No Letting Go
To sum up, from the beginning of April 2019, landlords will be required to use MTD compatible software to manage their tax records, updating HMRC every 3 months and providing an annual declaration.
Although the end result aims to make managing taxes more efficient, there’s likely to be some teething problems at the start.
To prepare yourself for this shift, it’s best to start early. Make sure your current software is compatible, and if not, plan which system to use. Staying organised across the whole of your property management processes is key to ensuring a smooth transition.
No Letting Go provide professional, accurate property reports to help landlords and property professionals keep track of their investments.
To see the full range of reports we provide, browse the No Letting Go Services section on our website.
No Letting Go is expanding. With over 65 branches spread across the UK, we are always striving to be the first stop for the nation’s property reporting needs.
Our professional property inventory services are now reaching further afield, with two new offices recently opening in Hertford and Basingstoke. Let us introduce you to the newest members of the No Letting Go team.
No Letting Go Hertford
The new branch of No Letting Go in Hertford, Hertfordshire is being headed up by Moira Hendrick. Moira is an experienced property reporting specialist with a great local knowledge of the property market in the surrounding area. Coming from a background of customer service, administration and management, Moira is well practiced in providing an excellent service for her clients.
When searching for a property franchise opportunity, Moira came across the No Letting Go scheme. According to Moira; “No Letting Go stood out because of reputation, low start up costs and support”. She is looking forward to building her business with the help of her experienced clerk, Danny.
The Hertford team pride themselves on going the extra mile for customers, accommodating last minute bookings whenever they can. They welcome any property agent or landlord to get in touch.
Contact: [email protected]
07950 007 004
No Letting Go Basingstoke
The new No Letting Go Basingstoke office in Hampshire is run by married couple Rob and Margaret Rymill. While the pair have followed very different career paths, their knowledge of the local area has put them in a fantastic position to lead this branch. Rob has a background in the electronics industry in sales and marketing, while Margaret has spent her career teaching 3-6 year olds in a range of settings.
Both Rob and Margaret hope to spend the next 12 months developing their knowledge of the industry to establish No Letting Go as a centre for property management in the Basingstoke area.
Contact: [email protected]
07957 187 268 / 07538 111 718
What is a Property Franchise?
Franchising is the process of buying a ready-made start-up, allowing franchisees to launch their own businesses with the added support and security of a well-known company behind them. A franchise with No Letting Go offers training, branding and the expert knowledge to get your business off on the right foot.
Our Property Management Services
No Letting Go provide a range of professional, unbiased services to help property professionals, lettings agents and landlords manage their investments.
From Legionella risk assessments and CO reports to right to rent checks and vacant property inspections – No Letting Go are here to guarantee no stone is left unturned.
We specialise in property inventory management for which we provide a comprehensive written and photographic report of all items within a property. Using the latest technology to ensure landlords and their representatives recover all costs against tenant deposits, No Letting Go provides a trusted service.
To find out how No Letting Go could help, browse our list of property management services today.
There’s been lots of talk over the last few years around the possibility of abolishing letting agent management fees. Now, it seems, it’s come to fruition. On the 12th February, the Tenant Fees Act 2019 was passed and became law.
While good news for tenants, for lettings agents and landlords, this change requires careful planning. Whichever side of the fence you’re on, it’s helpful to have all of the facts.
That’s why we’ve rounded up all the information about the new letting agent fees ban and what it means for landlords, letting agents, property professionals and tenants.
What are Letting Agent Fees For?
Up until now, letting agents have been legally permitted to charge fees for admin, tenant reference checks and other costs.
The responsibilities of letting agents include sourcing tenants, collecting rent, and acting as a means of communication between tenants and landlords.
Typical letting agent fees for tenants should be around £200 to £300 per tenancy, however some groups argue that this figure has been greatly increased by some rogue agencies. For tenants paying higher costs, this ban comes as welcome relief. However, lettings agents who charge reasonable and necessary fees may think otherwise.
The Government Proposal
The effort to get letting agent fees abolished was driven by the government’s aim to make renting more stable for tenants. With 4.5 million households in England now renting, this market is growing rapidly.
While they accepted that many letting agents provide a legitimate and valuable service, the issue of varying admin fees from agency to agency needed to be addressed.
According to the government, banning agency fees will result in greater transparency for tenants, make moving more affordable and allow landlords to ‘shop around’ to find the best letting agent.
The Tenant Fees Act 2019
The proposal to ban letting fees has been in process for a number of years.
The ball started rolling in April 2017, when the government opened up a dialogue to work on the details of the ban. The aims of the ban were to make renting ‘fairer and easier’ for tenants by making costs more transparent and to improve competition in the rental market. This consultation received responses from tenants (50%), lettings agents (32%), landlords (10%) and other stakeholders (8%).
The Tenant Fees Bill draft was then announced in June during the Queen’s speech at the opening of parliament.
In May 2018, housing secretary James Brokenshire MP introduced the bill to parliament, which then passed through the House of Commons in September.
January of this year saw the ban being passed in parliament which was then cemented as law on the 12th of February as the Tenant Fees Act 2019.
What is the Tenant Fee Ban?
The act sets out the new rules and standards for the ban on letting fees;
- Security deposits cannot be more than the cost of five weeks of rent payments. (Unless rent exceeds £500,000 when it’s capped at six weeks)
- The ban includes capping holding deposits to one weeks rent and making them refundable to the tenant
- The fee to change a tenancy will be capped at £50
- If a landlord or letting agent breaches the requirements, a fine of £5000 is payable in the first instance. If a similar offence has been committed within the last five years, it could be deemed a criminal offence. Prosecution or fines of up to £30,000 could be issued
- The ban will be enforced by Trading Standards who will help tenants recover funds that were unlawfully charged
- Landlords will be unable to seize possession of property via Section 21 until they have repaid any unlawful charges
- Letting agent fee transparency should be extended to property sites such as Zoopla and Rightmove
What Can Landlords and Letting Agents Charge Under the New Act?
Under the new act, property agents will only be permitted to charge for the following;
- Rent
- Deposits
- Early termination of a tenancy at the tenant’s request. This means the costs to the landlord or letting agent to find tenants will be covered
- Council tax, utilities and communication services
- Payment of damages in the case of breached agreements
- Late rent payment
- Replacing keys etc.
Can Letting Agents Still Charge Fees?
Currently, yes. The ban only comes into play on the 1st June 2019. Until the letting agent fees ban date, this practice is still legal.
However, if you’re a landlord or letting agent you might want to start thinking about this change and what plans to put in place.
The Impact of the Ban on Landlords and Agents
One issue that is being raised regarding the ban is the possible impact on landlords. Some are arguing that the ban will result in charges being passed on from letting agents to landlords.
This, they argue, is counterproductive as it means landlords may be forced to raise monthly rent collections in order to make up costs.
The Association of Residential Letting Agents (ARLA) for example, are against the ban and believe that instead of an outright abolishment, fees should be ‘open, transparent and reasonable’. In response to the Government ban, ARLA recommend that upfront fees should be banned, but letting agents should be allowed to spread these costs across the tenancy.
They believe that a blanket ban would ‘put additional pressures on landlords, with fewer tenant checks and a lower quality of service’ and that ‘spreading the cost of these services will allow letting agents to retain current service levels to tenants’.
The Impact on Inventory Management
One suggested outcome of the ban is that letting agents will start to take inventory services ‘in-house’. A guide has been created by TDS, Propertymark and the Association of Independant Inventory Clerks (AIIC) to provide information on avoiding disputes regarding poorly executed inventories and deposit deductions.
Speaking on the report, the AIIC encouraged unbiased, comprehensive reports to protect all parties involved. Similarly, Propertymark highlighted the importance of a thorough inventory and the need for an ‘evidence-based approach’ to protect investments for both landlords and tenants.
Be Prepared with No Letting Go
Whichever stance you take, it‘s best to prepare for the changes early.
If you’re a landlord or letting agent looking to get ahead and prepare for the changes, No Letting Go can help.
We offer reliable, professional property management services to help you stay on top of your responsibilities and protect your investment. From property inventory reports to appraisals and tenant checks, No Letting Go helps protect your property for the long term.
Browse our full range of services here to see how we can help.
High tenant demand means buy to lets can offer a lucrative investment for prospective and professional landlords. However, changing terms to tax relief on buy to let mortgages and rising interest rates require landlords to think carefully about the risks and rewards of entering into one.
If you’re considering a buy to let (BTL) mortgage, it’s important you understand the differences between a BTL mortgage and a residential mortgage and the different types available to you.
Having all the information available is one way to make a secure decision. That’s why we’ve created this guide on buy to let mortgages so you can make the right choice for you.
What is a Buy to Let Mortgage?
Put simply, a buy to let mortgage is a loan specifically designed for landlords looking to buy property to rent.
Buy to let mortgages are viewed as higher risk by lenders, meaning there can be higher fees, deposits and interest rates than residential mortgages.
But don’t let that put you off completely!
Can Anyone Get a Buy to Let Mortgage?
If you’re looking to buy property in order to rent it to other parties, it’s likely you’ll need to make a BTL mortgage application.
There are certain criteria you need to meet in order to be considered.
You are eligible for a BTL mortgage if:
- You are looking to invest in residential property (this includes houses and flats)
- You have the financial stability to repay the mortgage
- You own your own home (either with a previous mortgage or outright)
- You have a good credit rating
- You earn over £25,000 per annum
- You are below a certain age. (Most lenders have stipulations regarding the age you are when your mortgage ends which is usually between 70-75 maximum)
How do Buy to Let Mortgages Work?
BTL mortgages aren’t too different from regular mortgages, which, as a homeowner, you’ll be very familiar with.
There are, however, some variations it’s important to be aware of:
- Fees and interest rates are a lot higher than residential mortgages
- The deposit is around 25% of the property’s value as a minimum
- BTL mortgages tend to be interest only, rather than requiring monthly repayments. This means that the loan is to be paid in full at the end of the mortgage term.
- Most buy to let mortgages are not regulated by the Financial Conduct Authority (FCA). However, if you are letting the property to a family member, this will be considered as a consumer buy to let mortgage and will be subject to the same regulations as a regular residential mortgage.
Types of Buy to Let Mortgages
Buy to let mortgage deals can differ depending on which lender you go with.
Interest rates will all depend on the amount of money you borrow and how much rental income you receive.
It will also be affected by the type of buy to let mortgage you choose:
Tracker BTL Mortgage
If you opt for a tracker mortgage, your monthly repayments are subject to change each month depending on interest rates. This is great news if rates decrease, but not so good if they increase dramatically.
Discounted Variable Mortgage
A discounted variable mortgage is a mortgage deal with an interest rate set around 2% below the SVR (standard variable rate). These deals usually last around two years. The rate is still subject to change dependant on the SVR, but the discount will stay in place for the agreed time.
Multiple Year Fixed Rate Mortgage
A fixed-rate mortgage will keep your repayments low and stable for two to five years. Different mortgage providers offer different deals, so it’s worth shopping around. Just make sure to check what the rate will increase to at the end of the fixed period.
How to Get a Buy to Let Mortgage
Now you know the basics, it’s time to find out how to apply for a BTL mortgage and where to look.
Most large banks loan BTL mortgages, and a mortgage broker can help you decide which mortgage deal makes the most sense for your needs and purposes.
Another place to look when searching for the best mortgage rates is a reputable price comparison website.
Here are some reliable sites to use:
- Which? Money Compare
- Money Saving Expert
- Money Supermarket Mortgages
It’s worth checking a few comparison sites to get the bigger picture before making a decision. And don’t forget to read the small print for hidden fees and extra charges!
How Much Can I Borrow?
Your borrowing limit is connected to your rental income. This is called a loan-to-value, or LTV amount, which is worked out as a percentage of the property value. An LTV for BTL mortgages is usually around 90%- 95% rather than 100% for residential mortgages.
This means that your loan is likely to be lower, due to the perceived high risk factor.
Because of this, it’s recommended that you charge around 25%- 30% more for rent than your mortgage payment.
Local property agents or websites can help you get an idea of the amount of rent you can charge in your desired area.
Despite lower borrowing amounts and a larger deposit, the average buy to let purchase price is actually lower than for a residential property.
Tax on Buy to Let Mortgages
Keep in mind that there will be other outgoings to consider when deciding if you can afford a BTL mortgage.
Income tax, capital gains tax, landlord fees, landlord insurance, and letting agent fees all need to be considered.
With changing terms to tax relief on buy to let mortgages it’s important to keep track.
The new regulations mean that landlords can no longer claim all their mortgage interest against income tax on rent. The amount of interest deductible is being reduced by 25% a year until 2020, when it will become a 20% tax credit on the mortgage interest paid.
This change has the potential to raise some landlords up a tax bracket.
Plan for all Circumstances
As you know, applying for a mortgage is a not a decision to be taken lightly as the responsibilities are a long-term commitment.
To protect your financial security, it’s a good idea to have a plan in place for different eventualities.
For example, it’s not uncommon for a rental property to experience void periods in which no rent is coming in. Or, at some point or another, a pipe might burst, or a roof might need urgent repair. As a responsible landlord, you need to be able to provide effective and timely repairs.
To protect yourself from this burden, making a savings plan is vital. Ensure you are saving as much as possible when you have full paying tenants to avoid any stressful situations in the future. This should happen before making an offer on a house.
Tip: Don’t rely on selling the property to pay the mortgage off! If house prices fall, and you don’t have a backup plan, you’re in serious trouble.
Protect Your Buy to Let Investment
While applying for a mortgage is always a risk, once you have all the information at your fingertips, you can make a better informed decision.
One way to help guarantee the safety of your property investment is to ensure you are fulfilling all your duties and requirements as a landlord.
No Letting Go offer a wide range of property management services including professional unbiased inventories, safety assessments and maintenance reports to help you protect your investment.
Browse our full list of services to find out how we can help.
It’s no secret that the private rental sector needs improvements in some areas. A lack of organisation and a minority of poorly maintained, privately rented properties are damaging the sector’s reputation. These negative aspects are often used as fuel to publish damming headlines blaming landlords and property professionals for failures in the industry.
However, a 2018 report by University of York academics, Julie Rugg and David Rhodes named the ‘Evolving Private Rented Sector: Its Contribution and Potential’ is the latest source to argue that the problems in the rental sector are not the fault of landlords and letting agents alone.
We’ve been featured in Letting Agent Today on our support of this new proposal. Here’s how a new rental property ‘MOT’ certificate could improve the private rental sector for both landlords and tenants.
The property MOT is the initiative created by The Lettings Industry Council (TLC). The group is made up of a cross range of letting experts who represent landlords, letting agents, tenants, suppliers and others in the Private Rental Sector and includes government advisors. The groups aim is to improve standards across the industry.
The Report: Improving the Private Rental Sector
The report acknowledged that the private rental sector is currently ‘failing at multiple levels’. Subpar housing conditions, disorganised management and the fact that many tenants and landlords are unsure of their rights and responsibilities has resulted in this situation.
The report recommends introducing a new, annual MOT-style certificate to set a new minimum standard for rented housing conditions.
The New Property Licence
The suggested scheme would ensure a property is licensed before being let. Landlords would be required to apply for a licence so that an independent property inspector can review the property.
This service would be performed by property professionals, trained to assess whether a property is fit to let. Once affirmed, all licensed properties would be added to a national database connected to the landlords phone number, while unlicensed properties would be subject to legal action if let.
For HMO properties (houses in multiple occupation), a slightly amended certificate would be required, taking into consideration the extra safety checks needed.
If introduced, mortgage lenders would have to check the status of a property before loaning money and it would be illegal for letting agents to manage an unlicensed property.
The authors believe that, alongside other revisions to the industry, this ‘MOT’ could improve conditions for renters. They also hope that the new scheme would free up time and resources for local authorities to combat criminal activities and other pressing issues in the industry.
Benefits for Private Rental Landlords
One benefit of this proposed scheme, is that it would integrate existing health and safety certificates for rental properties. Gas and electric checks and the energy performance certificate (EPC) would be added to with a basic standards for habitation assessment.
This goes hand in hand with the recent 2018 Homes (Fitness for Habitation) Bill which requires all rental properties to be safe and free of health risks for tenants. This act makes any landlords not meeting these standards liable by giving tenants the power to take legal action.
Integrating these property licenses has the potential to make things simpler and more streamlined for landlords.
Reaction from Property Professionals
The report has been praised by property professionals for moving away from the culture of blame often placed on landlords and other property agents in the media. Instead, finding sensible solutions to current problems and improving systems for both landlords and tenants could help to transform the industry as a whole.
No Letting Go’s founder and chief executive, Nick Lyons spoke to Letting Agent Today on why he believes that creating an MOT certificate system could raise the standard of homes in the private rental industry;
“An MOT report, ensuring a property meets a minimum standard, alongside an independently and professionally compiled inventory would ensure that everything about a property’s condition and contents is suitably documented at the start of a tenancy”.
It’s not just No Letting Go championing this idea. ARLA Propertymark, the professional body for raising standards in residential lettings, agrees that this certificate could be a simple and practical solution to current issues.
Keeping on Top of Your Rental Properties
If you’re a landlord who’s worried about potential changes to your responsibilities and feel overwhelmed with licencing applications, why not delegate some of the work?
No Letting Go are one of the largest providers of inventory services in the UK. We provide independent property reports, including check in/check out services and safety checks to help give landlords peace of mind. Find out more about our services here.
Looking to make the most of being a landlord? Hoping to be more efficient while reducing costs?
There are many ways this can be done! We’ve outlined them for you to help you maximise your opportunities.
Here’s how to get the most from your portfolio in 2019.
Always Run a Tenant Reference Check
If your properties are your source of income, who you let to can make or break your success.
There are a number of consequences that can arise from letting to an untrustworthy tenant! This could be anything from damage to your investment to a costly legal battle.
The result? You may be unable to let out that particular property for some time, causing potentially severe financial consequences.
The solution? Always run a tenant reference check with a professional company!
Meet Your Legal Responsibilities
From insurance to health and safety, landlords have number of requirements to meet. Failure to do so will make your property less desirable to live in.
So, if you’re looking to get the most from your portfolio – never cut corners when it comes to being a good landlord.
Inspect the Property Regularly
Landlords inspections are key for ensuring that your property is being maintained as agreed. As well as this, you’ll appear hands-on and attentive to detail.
When visiting the property, ensure you’re thorough. Keep a record – this will make it easier to determine fair wear and tear from recent damage.
Treat it Like a Business
For many, bricks and mortar aren’t seen as a source of income. However, if you’re a landlord, the opposite is true.
This means you should treat it as such! While being approachable will help you form a strong relationship with your tenants, you should have a business mind.
Here – a structured and organised approach is key:
- Who’s dealing with your finances?
- Which Tenancy Deposit Scheme are you using?
- If you’re unable to look after your property for any reason, such as a holiday, who will take your place?
- If you’re using an agent, are their fees covered?
Keep Researching the Market
Research shouldn’t stop once your properties are let out! The local area, and what people want from it, is constantly changing.
Always have a target tenant in mind – for example a one-bed flat is unlikely to appeal to a market where many families rent.
Work to Reduce Void Periods
All landlords want to prevent void periods! However, this can be easier said than done.
If you keep coming up against this issue, it’s time to start taking it more seriously. Here are some solutions you may not have considered:
- Think about a HMO (house of multiple occupation)
- Be more open minded
- Advertise earlier
- Market your property differently
Maintain the Property Regularly
In 2019, resolve to see property maintenance not as an extra expense – but an investment. Often, what you put in is what you’ll get out.
This doesn’t just apply when trying to attract new tenants. For existing tenants, regular maintenance is key also. It can help you form a good relationship with them, as well as help justify reasonable rent increases.
Remember – it pays to look after your tenants!
Have Set Processes for Dealing With Issues
What procedure do you follow if something goes wrong?
For example, if a tenant falls behind on their rent, what do you do? You should already know the answer to this before it happens. Part of getting the most of your portfolio is understanding that problems can arise – and knowing how to deal with them.
Ideally, if you’re organised enough, you’ll take a proactive, rather than reactive approach.
Keep a Paper Trail
If you’re meeting all the safety requirements, ensure you have proof of this. From legionella risk assessments to smoke detector installation, it’s handy to have a paper trail.
Have a Detailed, Thorough Inventory
One way of ensuring your investment is secure? Have a comprehensive inventory.
This shouldn’t be just a collection of pictures, but a full and thorough report. The key here is clarity – so no issues can arise. Remember, simple facts aren’t enough; details are necessary for determining a weak inventory from a strong one.
This has multiple benefits to all parties, such as reducing the risk of deposit disputes.
But, many landlords struggle to put these together themselves. There’s lack of time and know-how for example! What’s more, even when landlords do put together DIY inventories, they’re often insufficient.
Luckily, we have a solution. Our professional, comprehensive property inventory services will take the hassle out of the process for you. From check-in to check-out, your investment will be protected!