Preparing a home for first-time let: The Reluctant Landlord's Guide
The recession and subsequent housing market decline has created a wave of reluctant landlords homeowners who have to let out their property because they cannot sell it. But letting a property for the first time needs thought and consideration according to the Association of Residential Letting Agents ARLA.
Research conducted by ARLA showed that more than a third 34 of member offices surveyed during Q3 2010 saw an increase in the number of rental properties coming onto market because they couldnt be sold. This has caused an influx of former privately-owned homes.
While homeowners forced to let out their home can reap significant benefits by holding on onto their property becoming a landlord for the first time can be a stressful experience said Ian Potter operations manager at ARLA.
Successful letting isnt simply about finding a tenant signing a contract and handing over the keys there are important steps any every landlord should take when letting out a property that was once their home.
On converting an existing private home into a property for rent ARLA has the following top tips:
- Furniture: Decide whether the property will be fully partially or unfurnished if your furniture is precious then take it with you or put it into storage. But remember you may be able to charge more for a furnished property
- White goods: There are regulations governing the installation of electrical equipment in rental properties make sure youre clued up and that you have any equipment in your property regularly tested as you will need to prove your property is safe. The same is also true for gas appliances which must be certified and checked annually
- Do some DIY: Its not strictly necessary to do it yourself but you should pay some attention to the dcor in the property. While brightly-coloured walls and purple ceilings may be to your taste they may also make the property less desirable. In contrast neutral colours are easier to re-touch at the end of a tenancy make a property seem fresh and light and will match any furniture. If youre letting out a family home perhaps even consider using a wipe-clean paint for potential budding da Vincis. Often a well-presented property earns better respect from its tenants
- Hands-on?: Choosing to enlist a managing agent to look after your property can be a real help especially if you are moving away from the area or have a busy job. At the very least working with a lettings agent to advertise and fill your home should make the process smoother. Either way make sure you pick the agent carefully and only ever choose a regulated agent to ensure your money and your tenants is protected and that you have access to a redress scheme should things go wrong
- Let go: Finally in all the decisions you make about letting out your home remember that its no longer your home no matter how much you love it it is now a home for someone else and hopefully an investment for you. The chances are that accidental damage or wear-and-tear will happen and tenants will complain so try and keep a clear detached head when dealing with those kinds of issues and dont take it personally
Revised Assured Shorthold Tenancy rent threshold
Stuart Fellows Lettings Director at Chamberlains discusses the revised Assured Shorthold Tenancy rent threshold.
As from October 1 new regulations mean that rental properties with an annual rent of up to 100000 a year will now automatically fall under the Assured Shorthold Tenancy classification and will need to meet rules on tenancy deposit protection. The new threshold means that any individual tenant paying up to 100000 for a flat or house as their main residence automatically gets AST status on October 1. The old threshold was 25000 annual rent.
We had been previously told that all tenancies with a rent up to the new threshold made on or after April 6 2007 should have their deposits protected. However it is now unclear if the expanded requirement for retrospective tenancy deposit protection can legally extend to existing tenancies and CLG the department responsible itself is uncertain.
It is understood the three tenancy deposit schemes have all been told that the requirement would affect only new tenancy agreements on or after October 1 together with renewals on or after October 1 and new deposits taken on or after that date.
However when clarification was sought CLG advised that their own lawyers were unclear and were expecting to see a courtroom challenge to establish the principle.
It is thought this could be a challenge by a tenant whose expensive deposit was not protected from April 6 2007 and has not been returned by the landlord.
A spokesman for CLG said: The Housing Act 2004 refers to deposits taken in connection with a shorthold tenancy so it could be argued that landlords would not have to protect the deposit if the tenancy was not an assured shorthold when the deposit was taken. The deposit would however have to be protected when the tenancy was renewed or if a new deposit was taken. Our advice to landlords therefore is still to protect the deposits from October 1. We see this as good practice and it cuts out the risk if they were ever challenged.
Therefore despite the uncertainty agents should still advise their landlords to cover their own backs by ensuring that they stick to the original date of April 6 2007 and protect deposits by October 1 on the relevant existing tenancies.
The position for new tenancies beginning on or after October 1 is unequivocal. Deposits that have been paid on relevant properties must be protected or the landlord will risk a fine of three times the original deposit. It will also not be possible to serve a section 21 notice if the deposit has not been protected.
The new rules are likely to hit larger shared properties including student HMOs as well as rental properties in expensive cities like London Manchester & of course Birmingham.
Landlords should address any questions to stuartf@chamberlains.uk.com
Fine Threats
Landlords who do not produce Energy Performance Certificates could be fined 200.
The requirement becomes law on October 1 and places new responsibilities on landlords
Protect your Rent
PRESS RELEASE Tuesday 13 October 2009 LANDLORDS URGED TO PROTECT THEIR RENT With unemployment and illegal evictions rising residential landlords are being advised by Chamberlains Lettings to protect their property investments by insuring their rental income.
This follows figures that were recently released by the Office for National Statistics which show that the level of unemployment in the UK has now risen to its highest level since 1995.
In the three months to July the number of people out of work rose by 210000 bringing the UK jobless total to over 2.47 million. Official statistics show that in the last six months alone over 1 million people have been made unemployed in the UK.
Some economists believe that there are already signs that the UK economy is growing again. However the British Chambers of Commerce predicts that unemployment could reach 3.2 million by the second half of 2010 and the TUC believe that unemployment could well reach over four million.
Stuart Fellows Lettings Director from Chamberlains Lettings said: Many landlords are simply unaware of the protection thats available to them. At Chamberlains we work in partnership with HomeLet the UKs leading insurance providers to the lettings industry to supply a range of insurances that protect the rental income of our landlords. With unemployment rising the recession has inevitably had an impact on some tenants ability to pay the rent and an increasing number of landlords are facing the prospect of rental arrears.
But its not only the cost of missed rent that landlords need to consider we know from experience that evicting a tenant through the courts can be an extremely stressful and time consuming process A recent report from housing agency Threshold revealed a huge rise in the number of tenants being illegally evicted from their homes by landlords.
The organisation said it had received reports of more than 1000 threatened or actual cases of illegal eviction this year compared to 674 throughout all of 2008. Stuart continues: The illegal eviction of tenants is a real problem but the majority of landlords simply cant afford to lose their rental income even if missed payments are due to circumstances out of the tenants control such as redundancy.
Thats why we offer Rent Guarantee and Legal Expenses which not only covers missed rental payments but also provides Legal Expenses cover. This means that if a tenant defaults on the rent HomeLets property legal experts will handle the eviction process from start to finish on behalf of the landlord. This allows the tenant time to move out in accordance with current legislation whilst the landlord receives their rent HomeLet is a trading name of Barbon Insurance Group Limited which is authorised and regulated by the Financial Services Authority.
Registered in England number 3135797.
Registered office address: 4-9 Highview High Street Bordon Hampshire GU35 0AX.
