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Too many people who are new to the private rental market, particularly accidental landlords in London, neglect having the right kind of property insurance in place.

This is according to David Lawrenson, private rented sector expert at LettingFocus.com. He feels that when people decide to let out their own home, they are often under the mistaken belief that the standard insurance they had in place will suffice for their new tenants.

"It doesn't cover all of the risks that would apply when you're letting out a property," he warned." The home insurance would be voided anyway if you are not living in the property and are letting it out - there would be a clause on that."

He added that proper landlord insurance is what needs to be put in place before a tenancy agreement is started as these types of cover indemnify the landlord in the event of things such as malicious damage by tenants and loss of rent if the tenants have to move out due to things such as fire or flood.

Residential Landlords News

Recent years have seen a rise in the number of accidental landlords in London, but many mortgage lenders are clamping down on the practice.

Becoming an accidental landlord is where a person who wants to move house but cannot sell their existing home elects to rent it out to facilitate the move.

Figures released by the National Landlords Association (NLA) show that the number of people letting because they cannot find a buyer rose from 5 per cent to 7 per cent in the third quarter of last year.

To do this, borrowers will normally have to go back to their mortgage lender and either remortgage to a buy to let product or apply for what is known as "consent to let". Additional charges are usually levied, but increasingly lenders are frowning on the process as they see it as people who cannot sell attempting to play the system.

David Hollingworth from brokers London & Country told the Telegraph: "Things have toughened up. You are on your knees in front of your lender, hoping you'll be allowed [to rent out your property].

"If there is even a sniff of you needing to move in with Mum and Dad because you are struggling financially, they are likely to be very nervous. If you are relocating for work they are more likely to be understanding."

Some changes to legislation surrounding letting agents and rental deposits kick in early next month.  

The amendments, to the tenancy deposit protection arrangements, which come into force on April 6th, give landlords more time to protect a deposit and serve the prescribed notice on the tenant.

Chris Norris, policy manager at the National Landlords Association (NLA),  said landlords complying with the previous regulations need take no action.

Under the changes, the time limit for protecting a deposit and providing the required information to the tenant will extend to 30 days from 14 days from the date of receipt.

Landlords who fail to comply could be forced to pay a penalty between one and three times the amount of the deposit.

It is thought that the two-week window was too short a period for many landlords and agents to deal with properly.

"Landlords that were complying with the previous regulations don't need to do anything different," Mr Norris said.

He said, though, that some landlords had used loopholes to protect very late.

"Those loopholes have been closed, so if landlords fail to comply, they need to be very aware that they can be taken to court, they can be fined quite considerably and they will receive those penalties," he stated.

More and more people are choosing to share their house or flat rather than live alone because it has become more socially acceptable.

Matt Hutchinson, director of SpareRoom, believes that during the 1970s and 1980s the idea of taking in a lodger attracted a certain image which made it appear like something only people at the lower end of society would do.

However, it is now common practice amongst professionals keen to keep their outgoings at a reasonable level so that they can then enjoy the finer things in life.

“People don't see it as a Rising Damp situation anymore; it is now seen much more as young professionals sharing,” Mr Hutchinson explained.

“The small move towards legitimising it a bit has given people more confidence in it. The need is there and also, as more people do it, it becomes an easier thing to do and a more acceptable thing to do.”

As tenants are staying in rented properties for longer, landlords are being warned that they must ensure that everything is in place when the agreement starts of risk hefty costs in the future.

Recent figures from the Association of Residential Lettings Agents (ARLA) shows that tenants are staying put for an average length of 19.3 months, an increase of 17 per cent on the previous recorded length of 16.5 months.

With this in mind ARLA is calling on both landlords and tenants to draw up a comprehensive inventory at the start of each letting agreement so that they both know what is what in the property.

Ian Potter, Operations Manager at ARLA said: "This increase in the length of tenancies will inevitably lead to greater wear and tear in rented accommodation and fewer opportunities for ‘downtime' between tenancies for landlords to make improvements.

“Landlords and tenants alike should remember that disputes over deposit returns can be one of the biggest headaches facing both parties, but these can be easily avoided if a professional inventory is prepared."

The inventory should include the condition of fixtures and fittings as well as the property itself.

ARLA recommended that both landlords and tenants should speak to a professional lettings agent about the best way of putting an inventory together.

There may be a charge when drawing the inventory up and this, as it is for the benefit of both parties, should be paid for equally by the tenant and the landlord.

Other advice given by ARLA is to take pictures of the property’s condition to provide evidence in the event of any dispute and to check utility readings to ensure that there are no issues over the size of bills.

And it seems there are set to be more landlords coming into the market this year as the Council of Mortgage Lenders (CML) recently confirmed that number of mortgage approvals for buy to let products is on the rise after increasing by 84,000 in 2011.

The National Landlords Association (NLA) has told potential first time landlords they should take the time to consider several key facts before they decide to the let their property out.

With house prices stagnating in some parts of the country while rental yields soar, many people are electing to rent their home out rather than sell it.

But the association says that a number of factors have to been taken into account and first and has issued a list of handy tips to those considering taking the plunge.

Top of the list is ensuring you have a proper tenancy agreement in place, outlining how much is to be paid, when, and details of the deposit.

A tenancy deposit scheme should be used. They are a legal requirement but many landlords forget to adhere to the rules.

All gas appliances in the property should be checked by a Gas Safe registered engineer and the tenant should be provided with a Gas Safety Certificate.

The new landlord should ensure that they have comprehensive landlord insurance as a standard home insurance policy is not designed to cover damage caused by tenants or guests.

Lastly, any repairs should be dealt with in a timely manner using reputable tradesmen who can be trusted to tend to the property at short notice.

“Letting a property can be a rewarding experience and an effective way of providing additional income, but prospective landlords will need to remember they are effectively starting a small business,” said David Salusbury, chairman of the National Landlords Association.

“They must ensure they are well aware of the rules and regulations governing the letting of private residential accommodation.”

Association of Residential Lettings Agents (ARLA) recently recommended that anyone making the move into the buy-to-let market should also ensure that they enlist the services of a professional lettings agent.

The new year could bring the kind of market that many accidental landlords have been waiting for.

With home values estimated to rise further in 2012, Alan Ward, chairman at the Residential Landlords Association (RLA), believes that the time to sell up as originally planned will have finally come.

An accidental landlord is someone who has opted to rent out their existing home when looking to move because trying to sell it would hold back their journey up the property ladder (officially termed let-to-buy in the mortgage industry).

"There is a sector of the market that is likely to come to sell as property values begin to increase - these are the accidental landlords who have been forced to rent because they can't sell for whatever reason," he said.

"Some people say there are 100,000 properties in that sector and, if that comes back on the market, then that is quite a big change."

The Association of Residential Lettings Agents recently advised anyone considering a move into the rental market to consider the benefits of using a professional letting agent.

Landlord and Tenant News: Government pours praise on SAFEagent in new housing strategy.

SAFEagent, the scheme launched this year to protect both landlords' and tenants' financial interests, has this week received glowing praise from the government.

In a statement released by Westminster detailing the government's new strategy for housing, SAFEagent, which launched to much acclaim in May, was described as a scheme which is driving up industry standards.

It was also stated that many landlords and tenants often do not realise the benefits of choosing a letting agent that is covered by the client money protection initiative.

“The SAFEagent scheme promotes consumer awareness of the issue and helps them to identify agents with protection, through the SAFEagent badge," the document noted.

“It shows how much can be achieved quickly and cheaply through simple and effective ideas driven by industry not the government.”

Since the scheme came into force, housing minister Grant Shapps has been extremely vocal in praising what SAFEagent is doing and has encouraged more letting and property management companies to sign up.

John Midgley, chair of the SAFEagent Steering Group, said that the governments continued backing was a "fantastic endorsement" of SAFEagent and he thanked Mr Shapps for his support throughout the past few months.

“We’re delighted that the government recognises that the industry can generate and implement proactive, innovative ideas which are in the interest of the consumer rather than relying on imposed regulations which would lead to further red tape and cost," he stated.

“SAFEagent is a simple and sensible approach to raising consumer awareness of Client Money Protection and it’s one that is working."

At present more that 1,600 agents and management firms have joined the scheme but Mr Midgley urged more to make a positive difference to the industry by joining up.

This September Lord Taylor of Holbeach, a Conservative peer and House of Lords whip, said he was "delighted" the government was endorsing SAFE and added that consultation is in place to make such protection initiatives a statutory requirement for all agents.

Landlord and Tenant News
 

The best way to get the most out of your rental property is to ensure you have a solid personal relationship with your tenant, claims one specialist.

Ed Harris, managing director at EH Landlord Services, says that you should be in regular contact with the people letting your property because failure to build any kind of friendship or rapport with them can cause all "kinds of problems and challenges".

Speaking at the Landlord & Letting Show in Birmingham recently, he stated: "The biggest thing that you need to have in place is a relationship with your tenants because if the relationship is not there, then anything can happen."

He added that landlords should also ensure that they have adequate insurance in place to protect both the property and their income.

His comments come on the back of recent figures released by the Council of Mortgage Lenders (CML) which suggested that the buy to let market will remain buoyant for some time to come.
 

Using a professional lettings agency is one of the best things anyone can do when they are looking to rent a home, says Malcolm Harrison of the Tenancy Deposit Scheme.

The scheme, which was launched in 2007, protects tenants' deposits against unscrupulous landlords and helps to resolve disputes. It has been actively embraced by estate agencies and Mr Harrison believes this is to the client’s benefit.

He said that while there remains some “bad eggs” amongst both landlords and tenants, the scheme has made relationships far more harmonious – especially when it’s looked after by a registered agency.

Indeed, resent research by ARLA found that tenants are now staying in rented property for much longer periods than they have in previous years.

“The advantage of going to a regulated agency is that the landlord can be assured that the client money is protected so the arrears will be protected. Importantly for the tenant, his deposit will be protected,” Mr Harrison stated.

He added that accidental landlords should look to work with agencies in particular, especially if it is the first property.

Landlord and Tenant News

Buy-to-let investors who rent property to large groups or students are being warned to keep abreast with changes to the Homes in Multiple Occupation (HMO) or risk incurring a heavy penalty.

The Association of Residential Letting Agents (ARLA) has said that many local authorities are currently planning amendments to their rules concerning lets of homes to groups of unrelated people.

Until April last year a landlord only needed an HMO licence if the property had six or more unrelated tenants, sharing amenities over three levels.

However, despite the rule being changed, local authorities could decide whether to implement the new regulations, which ask for licence to be in place for any home with three to six tenants who share common facilities

But a new amendment, known as Article Four, is likely to mean the rule will become mandatory and landlords who do not conform run risk being hit with a whopping fine.

Ian Potter, ARLA's operations manager at ARLA, warned: "There is no room for complacency - failure to comply could result in a hefty fine."

Research by Paragon found that student lets still offer the best yield to landlords at 7.62 per cent.

Landlord and Tenant News

With there now being the highest level of buy-to-let mortgage products on the market for three years, one property expert has advised landlords to ensure they do the proper research before signing an application.

David Whittaker, managing director at Mortgages for Businesses, an independent portfolio manager for UK investors, says that while average yield from a buy-to-let house is now a steady 6.3 per cent, landlords will only achieve a good margin if they first think about product suitability and the region in which they are buying.

"While it is attractive for landlords to lump in, it will be determined by that landlord's view of the market and the region," he stated.

He also warned that falling house prices could mean that current rental yields are not sustainable in the long run and property investors should consider this when assessing their potential profitability margins.

Earlier this month, a survey by property firm Paragon found that rental yields in the West Midlands and London were far out performing the national average at 7.35 per cent and 7.32 per respectively.
 

Landlord and Tenant News

Landlords looking to improve the rating of Energy Performance Certificates for their portfolio may find it difficult to insulate older homes.

Richard Jones, policy director at the Residential Landlords Association, said it is harder to treat properties built before 1980.

"The main problem with them is that they have no cavity walls to insulate and with a lot of them you haven't got the traditional loft space to insulate with the loft insulation. With the properties that lack cavity walls, they may need internal or external insulation," he explained.

If work needs to be carried out on the outside of the house, planning permission may need to be sought for certain procedures, while internal energy efficiency improvement work often causes "disruption" because landlords may need to move around light switches and radiators.

Meanwhile, recent research from the Association of Residential Letting Agents revealed that a third (35 per cent) of landlords are unaware of the energy performance of their properties.

Landlord and Tenant News
 

Landlords with property to rent in London will want to present their portfolio in the best possible light in order to attract tenants.

James Davies, chief executive of Upad.co.uk, has some tips for landlords wanting to pull in the renters.

"There has been a dynamic shift towards tenant requests being interested in a type of property, so requests for Wi-Fi, cleaning and security and that is becoming the norm rather than the exception," he noted, so landlords may wish to "raise their game".

"Whilst there are more tenants out there, tenants demands and expectations are rising fast. It is no longer good enough to whitewash the flat before a new tenancy starts," he pointed out.

Mr Davies also advised that it is becoming necessary to reference tenants, so checking a potential renter's credit rating is what a "professional" landlord would do.

His comments come after research found the average age of a first time buyer is now 37.

London Property to Rent
 

Landlords who have property to let in London may be unwilling to rent tenants who smoke.

Research by property search engine Globrix has found that 60 per cent of landlords will not let to smokers.

Of those who would rent their property to smokers, 50 per cent said they would charge higher rates.

The findings also showed that tenants are reluctant to rent properties that have formally been occupied by smokers, with 40 per cent saying they would think twice about moving into a property because smokers used to live there.

Jennifer Warner, from Gobrix, said: "It is no surprise that in today’s ultra-competitive rental market, landlords are coming down hard on smokers, penalising them with higher rental charges and in many cases refusing to let properties to smokers at all."

She added that the high proportion of landlords being unwilling to let to smokers shows that there is an increasing anti-smoking culture in the UK.

Landlord and Tenant News

 

First time buyers may want to think about renting out a spare room in their new property, as doing so can help them take years of their mortgage, it has been revealed.

According to research by first direct, people with an offset mortgage can shave 29 months from their mortgage by renting out a spare room for five years and making monthly overpayments during this time.

Richard Tolchard, senior mortgage product manager at first direct, explained: "As long as all necessary precautions have been taken, having a lodger is a really easy way for homeowners to earn more cash and reduce the term of their mortgage."

The government's Rent a Room scheme means that homeowners can rent out a room tax free for up to £4,250 per year, meaning they have an additional £354 per month to put towards their mortgage costs.

Interested parties may find a number of people are interested in renting a room, as Matt Hutchinson, director at SpareRoom, recently said people are choosing to live with others in order to save money.

First Time Property Buyers News

 

Individuals who need to take out a landlord insurance policy have been advised to consult experts before paying for cover.

Daniel Jewell, senior sales manager at the Business Octopus, commented: "If you are serious about it and if you want to protect yourself properly then always speak to a specialist, just to make sure that you get the right sort of cover. Ask as many questions as you possibly can, just to make sure you are covered properly."

He suggested that landlords think about the risks they are taking by agreeing to let to a particular tenant and review their insurance accordingly.

"There are so many different things that you can add on to insurance - like legal expenses, rent guarantee, rent protection. If you know your tenant and if you are quite confident that they will pay, then maybe you can live without that," Mr Jewell added.

His comments came after the National Landlords Association revealed an interest rate rise of one per cent on a buy to let mortgage would have a negative impact on 80 per cent of landlords.

Residential Landlords News
 

Landlords with property to rent in London may have to ensure their homes have an Energy Performance Certificates rating of above an E under new government plans.

However, this has attracted criticism from organisations that say the proposals will affect landlords negatively.

Andy Riley, national sales manager at Burdens Energy, said the plans are "just another way of skinning the cat".

"Landlords, if they have got to upgrade all of their properties, then it is going to hurt them," he argued.

"[The government is] not instilling any confidence in the market," Mr Riley added.

His comments came after the Royal Institution of Chartered Surveyors raised concerns about the government's initiative, prompting it to set up a project team of staff and members to monitor the situation and see what input, if any, the organisation could have in the process of turning it into law.

London Property to Rent
 

Landlords with property to rent in London are set to benefit financially as rents rise.

According to data from LSL Property Services, rents rose to a record high in May, having increased by 0.5 per cent to an average of £696.

London landlords are particularly well-placed to benefit as they could well see total annual returns of nearly five times the national average as demand for London property to rent steadily increases.

John Heron, managing director at buy to let lending specialist Paragon Mortgages, commented: "The rising rent costs reported give an indication of the continued lack of properties in the buy to let sector due to the constrained finances of professional landlords.

"There are a number of products available for smaller scale landlords, with only one or two properties, but for the professional landlord with a large portfolio there is limited finance available," he noted.

Mr Heron called for more UK mortgage lending options to be made available to professional landlords, as this will be needed to drive growth in the sector.

London Property to Rent
 

Tenants living in property to rent in London's Hammersmith and Fulham area have set out plans to take over two council estates earmarked for demolition.

Both estates, which contain 750 council houses, have been included in proposals for a redevelopment of Earls Court, which could provide thousands of new homes in the area, but people renting properties in the council-run sites wish to take ownership of the estates.

They are being supported by London assembly member Jenny Jones, who will be raising the matter with London mayor Boris Johnson.

She said that demolishing the estates would be a waste of money, given that the area has received £15 million of investment in the last ten years, in addition to the tenants' wishes.

Ms Jones also argued that the deconstruction work would have a significant carbon impact.

The local authority has written to the government in an attempt to quash the takeover proposal on the grounds that the Earls Court project has wider benefits for the area.

London Property to Rent