TDS state that the following percentage awards (in terms of deposits held) were made during 2010
Percentage of awards made to tenant – 56%
Percentage of awards made to landlord – 42%
Percentage of awards made to agents – 2%
The lack of landlord generated accurate paperwork seems to still be a problem.
TDS state that in 2009/10 the top three causes of disputes were as follows:
Cleaning – found in 46% of complaints
Damage – found in 29% of complaints
Redecoration – found in 24% of complaints
I read a great article written for Upad this week….if you missed it then here it is. It is always good to remember the basics.
The Buy-to-Let boom is unlikely to return any time soon. A serious lack of good deals from BTL mortgage lenders is compounded by a distinct absence of confidence right now. But it does look like those green shoots of optimism are starting to appear again and 2011 may well be the year when a little cheer returns for budding Buy to Let landlords.
Tenant demand has never been stronger and banks say they want to lend again. Combine that with rising rents in many areas and a housing market that continues to splutter, and you’d be right to think that now is a good time to reconsider a Buy to Let investment.
And invest is the key word. Buying to let is just another way of getting your capital to work as hard as it possibly can for you in order to generate returns. How you do that is up to you. Perhaps you want the boost of a monthly rental income from a property. Or you could fancy a longer term punt and hope to rake in the cash when you sell the property some way down the line. But whatever your intentions, make sure you don’t make any of the common errors that often put a Buy to Let landlord’s investment at risk.
Don’t spend too much for too little return.
Calculate what you can afford and take into account all the expenses of being a landlord. Don’t overstretch yourself. Be realistic about your finances and take professional advice on taking out an appropriate mortgage. Consider future interest rates. Over the next few years, interest rate rises are inevitable. Don’t be caught out: will your investment be as attractive if any mortgage payments you make rise dramatically?
Being a landlord also attracts all manner of expenses and they can sometimes come out of the blue. Ensure that you can afford them and also that they don’t dent the profitability of your investment. In a rented flat, the boiler could go kaput at considerable expense or a service charge bill could come out of the blue. Expect the unexpected.
Remember that your rental income might occasionally be reduced. Tenants might miss the rent and get into arrears or you could experience voids between tenants when the property isn’t generating any revenue. Ensure that you should mitigate against these and that you can afford to keep going through the leaner times.
Don’t forget to “futureproof” your investment.
Many landlords come a cropper because they spot a cracking property at a great price and just go for it. Don’t forget Elvis: only fools rush in. With a little local research, you might discover why the property is such a bargain. Is the location up to scratch? Is crime a problem? Is a new motorway just about to plough through the local nature reserve? Maybe a supermarket is planned for the end of the road? It doesn’t take much nous to do some research and understand what’s happening in the area. A bargain property is always a bargain for a reason. Just make sure that some third-party development isn’t going to blight your enterprise.
Buy for your tenants, not yourself.
Channel your inner Vulcan, disengage your emotions and buy a property that will generate a fine return. That’s the challenge Don’t fall into that all-too-common trap and buy a place you like but which is entirely unsuitable for the tenants you have in mind. And be careful to approach the decoration and fittings of your property in the same way. Go for generic colours and furnishings and think of your future tenants at all times.
Don’t forget the taxman. (He won’t forget you!)
In general terms (and you are best advised to consult a professional accountant on such matters), if you are making more than £2500 profit on your property each year you’ll need to file a self-assessment tax return. So make a merit of it. You can claim tax relief on certain expenses you incur as a landlord. A canny accountant will help you pay not a penny more (and not a penny less) than you have to and is well worth the expense for all the expertise they can offer.
Do you understand the role of a landlord?
Sometimes landlords jeopardise their investment by failing to appreciate and understand the legal frameworks that surround every landlord. Firstly, whilst it may be your house, it isn’t your home. You can’t just pop by on a whim and you are also responsible for maintaining the property in a fit state for the tenants. Bone up on the law, read a few books and keep up with the news. Joining one of the landlord associations out there is always a good idea.
An interesting story below on Landlordzone from the AIIC supports No Letting Go’s policy of detail first, technology second. Read on……
The use of technology in inventories could end up costing landlords far more than they bargained for, according to The Association of Independent Inventory Clerks (AIIC).
The perception of inventories by some lettings agents is that inventories can be very long, time-consuming and somewhat of a laborious process, resulting in several landlords and management companies opting for the use of technology in inventories, believing it will save them time and money.
The use of technology in inventories claims to help landlords and management companies to complete inventories in a matter of minutes, with the ability to add large quantities of photographs which can provide evidence in tenancy dispute claims.
In reality, whilst some systems are considerably better than others, most technology, including digital photography, does not allow for the inclusion of sufficient detail to provide indisputable evidence of original condition at the start of a tenancy.
For this reason in many tenancy dispute cases according to The AIIC, the adjudicators have thrown out technology-based inventories, as they cannot deliver the level of detail required which means that the landlord can lose hundreds of pounds in lost cases.
Pat Barber, Chair of The AIIC, comments: “Inventory reports should contain a full description of a property and its contents with details on every bit of damage and its exact location at the start of a tenancy. As an inventory is a binding legal document that provides a complete record of the condition and contents of a property, it is only effective if it is accurate.
“Without an accurate and properly detailed inventory, a landlord has no evidence to prove that the property has been damaged in any way during the tenancy and therefore will find it almost impossible to withhold any deposit money from the tenants.
The AIIC is committed to excellence and professionalism in the property inventory process and works hard to ensure that all landlords, tenants and letting agents understand the importance and benefits of professionally completed property inventories.
The aim of the AIIC is to ensure that every landlord, tenant and agent in the UK is aware of the importance of the inventory process and the benefits of employing an independent, professional inventory clerk.
Nick Lyons commented on the above article saying “No Letting Go believe technology is critical to improve the speed of the inventory, aid in management of paperwork and to help reduce costs, but not at the expense of the detail of an inventory”
An interesting article I received from Tom Entwistle at Landlord Zone.
A landlord has been fined £10,000 for failing to comply with the requirements of two Improvement Notices served by the Council.
Cllr. Chris Wells, Cabinet Member for Community Services, said: “I am pleased that the magistrates decided to fine Sandwich Properties Ltd the maximum amount. This company was clearly unable or unwilling to look after their property, and did not have any regard for the safety of tenants.
We always try to work with landlords to improve housing conditions, but where such blatant disregard for tenant safety is evident, we will use every power available to us to ensure that rogue landlords are brought to justice and tenants are provided with the safe living environment that everyone deserves.
We are also committed to protecting the public purse wherever possible, especially in these times of financial constraint. This is why we always charge for the service of Improvement Notices if the deadlines set out within them are not met”.
In 2009, officers of the Housing Regeneration Team visited 102 Grosvenor Place in Margate and found a property containing four flats which contained serious health and safety hazards. There were no fire precautions or safe means of escape and none of the lights in the shared entrance or staircase were working. The property had been neglected and the internal conditions were dirty and dilapidated.
Following enquiries, Sandwich Properties Ltd of Rookwood Road, London, was identified as the freehold owner. Subsequently, the council served enforcement notices on the freehold owner requiring fire safety improvements and suitable lighting within the common areas.
Unfortunately, when officers returned to the premises after the notice deadlines had passed, none of the work had been completed. Attempts were made to try and meet with the company to discuss the situation, but the company ignored the council’s letters.
In a case heard at Canterbury Magistrates’ Court on Tuesday this week (01 February 2011), Sandwich Properties Ltd were found guilty of failing to comply with the notices without reasonable excuse and fined the maximum £5,000 for each offence. The company was also ordered to pay a victim surcharge of £15 and contribute £100 towards the council’s prosecution costs.
As the lack of artificial lighting presented a considerable risk to the tenants of the property, the council stepped in and installed suitable lighting themselves. The company has been charged with the full cost of this work, together with the cost of officer time and a further administration fee. The company was also charged £911.25 for the council’s expenses associated with service of the original notices. Further action is now being pursued to ensure that the fire safety improvements are made.
If you are an owner of a residential building containing common areas, and would like advice about your health and safety responsibilities, you can contact the Council’s Housing Regeneration Team on 01843 577437 for further information.
Press Release – Thanet District Council: 03 February, 2011
|I read this last week on Property Drum about Google – a good or bad thing?|
|I am interested to know where they are going next with property as the tools they have add enormous value to people looking for or managing property.|
|Google has dropped its property search function on worldwide maps. “Not every bet is going to pay off,” says spokesman.|
Six months after last summer’s fanfare of a new dawn in property mapping, Google’s quest for domination of the property search process is to be shelved.
A Google spokesperson told PROPERTYdrum, “This feature wasn’t used as extensively as we would have liked, and proved difficult to maintain, so we’ve removed it. Note that all Google Maps layers are not going away, just the real estate layer, which was our first foray with displaying vertical industry information via the maps interface.
This also allows us to prioritise resources and focus more on our core commitment to search, local search and building maps that provide a digital atlas of the real world. Google likes to experiment because we believe that’s the best way to create ground-breaking products and features that make a difference in people’s lives. But not every bet is going to pay off.”
As ever with the ‘less than good news’ the story was not released to the press with the usual noise, but softly filtered to key people yesterday. Later, writing on his blog, Brian McClendon, VP, Google Earth and Maps, said:
“At Google one of our key philosophies is to take risks and to experiment. To that end, in July 2009 we announced the ability to find property for sale or rent directly on Google Maps. This is one of the “search options” next to the search box on Google Maps, and is currently available in the US, Australia, New Zealand, the UK and Japan.
“In part due to low usage, the proliferation of excellent property-search tools on real estate websites, and the infrastructure challenge posed by the impending retirement of the Google Base API (used by listing providers to submit listings), we’ve decided to discontinue the real estate feature within Google Maps on February 10, 2011.
“We’ve learned a lot and been excited to see real estate companies use Google Maps in innovative ways to help people find places to live, such as Coldwell Banker’s use of Google Maps and YouTube, or Realtor.com’s Android app that lets you draw a shape on a map to find all properties you’re interested in.
“Yet we recognize that there might be better, more effective ways to help people find local real estate information than the current feature makes possible. We’ll continue to explore this area, but in the meantime, Google offers other options to home-seekers: you can still access other information in Maps such as local businesses, directions and transit times, as well as aerial and Street View imagery to explore where you might want to move, and also use Google search results to find helpful real estate information and websites.
“Real estate companies can also continue to use tools from Google to help connect with buyers and renters who use the Internet to research properties. For example, companies can use the Google Maps API to embed customized maps that are useful to potential clients right on their own web pages. Our Google for real estate professionals site contains various methods for generating leads and improving real estate business operations.”
The property portals’ reactions have been quiet, but Sheraz Dar, Acting Group Marketing Director at The Digital Property group said,
“Homehunters have a complex and often comprehensive set of criteria when searching for a property, and as such need more information than a simple listing. As Google acknowledge themselves, an immense effort goes into producing a property portal. Here at The Digital Property Group we fully understand these needs and through our property portals FindaProperty.com, PrimeLocation.com and Globrix.com we provide a wide variety of tools to assist the homehunter in their search”
So for now at least, estate agents’ concerns about For Sale by Owner (FSBO) damaging their already struggling businesses, and the property portals sensing a very real danger that agents wouldn’t need them, it is back to the status quo. The reason being that nobody actually raced to google Maps to find a home; it seemed just as easy to look at the clean, clear details on a portal, or even, for the real old fashioned types, in the newspaper or actually, heavens above, in the estate agents’ windows. Proof perhaps that you can lead a horse to water but you can’t make him drink.