Insurance Schemes That Claim to Get Around Tenancy Deposit Schemes - And Why They Won't Work

A colleague at landlordzone.co.uk drew my attention to a scheme that aims to avoid the tenancy deposit schemes (TDS) by having the tenant effectively insure against the rent and damage.
Basically it involves the tenant completing a form and paying a premium under which you the landlord gets cover against rent non payment and damages.
There is a big problem though with these schemes.
The main doubt I have is that the tenant would have to be a very good one to get on the scheme in the first place.
Most of my tenants are from overseas or they are young – in both cases I know from their credit scores that they have limited credit records which would disbar them from any rent guarantee schemes as their credit score would be too low for them to qualify.
However, having a lowish credit score does not a bad tenant make!! (I do other checks on them which confirm whether they are a safe bet or not.)
If I had to wait to get a tenant whose score is high enough to qualify for an insurance policy to cover non payment of rent or agaisnt damages, I’d be waiting a very long time for a tenant!
Copyright David Lawrenson 2007. Back to main site: www.lettingfocus.com

Guide to Using Mortgage Brokers - Part 1

Whether you get good advice from mortgage brokers is an interesting question and one which is a particular concern for buy to let mortgages which are treated like commercial mortgages in that they are unregulated (unlike standard residential mortgages)
Of course, with thousands of mortgages to choose from, a good broker will help you through the maze. Many people start their search by looking at sites like http://www.moneysupermarket.com/ but these sites will not list all the lender’s detailed criteria which could mean that one lender will reject you, whilst another is prepared to accept you.
This is where a good broker –who will be familiar with the nuances of each lender’s criteria - can really help. A good one will look at the whole market to find the best deals for you and do all the administrative work to get the loan approved.
Some brokers charge nothing to clients while others charge an upfront fee for advice - thus further complicating matters.
But how much time can a broker really save you? And does the fee paid by the lender to the broker (the procuration fee) sway the advice you get from the broker and at what point does a procuration fee become a consideration in the advice process? And how do "repeat fees" paid by lenders to brokers to keep clients with that lender effect the extent to which good advice is given? I'll look at these issues in part 2 soon.

HIPS Postponed

What a mess!
What should have happened was that the government should have stood up to the mortgage lenders and RICS and told them to find a way of having a valuation report included in the home condition report (HCR) prepared by a vendor.
Instead, they let them off the hook - and binned the HCRs.
Why did the lenders and RICS oppose this?
Could they have been worried about losing the income stream that having multiple surveys done for different buyers on the same property bought them.
Copyright David Lawrenson 2007 Back to main site: www.lettingfocus.com

Removing Squatters - Part Two (For Part One see Monday May 14th Blog)

If a trespasser is in occupation you ARE able to rely on self help measures (i.e. not involving the court) to get the property back. Clearly, what you will have to do is somehow get into the property and change the locks and secure it. But herein is the problem.
Although you can do legally do this yourself - and you would be wise to have the police there when the squatters come back – what you cannot do is use violent entry if one of the squatter is actually in the property at the time and opposes you.
Of course, all clued up squatters know this, so they change the locks so you cannot get in easily and they will always make sure that someone is in the property at all times.
Since many won’t have jobs, this is often not a problem for them to be in all the time!
In these cases, if you try to get them out they will probably quote the relevant law – which is section 6 of the Criminal Law Act 1977 - and no doubt call the police and friendly lawyers to stop you from trying to evict them.
To counter this you will need to use the special court process for trespassers. Usually these can be issued quickly – often in less than four weeks. If you do this you are strongly advised to use the services of a solicitor to help you.
For most people this will be the most attractive option and is usually easier than waiting in vain for them to go out before you can go in and change the locks. It is also much better from the point of view of your own physical safety too.
The good thing about going to court is that you will only have to wait about a month and the occupiers will almost certainly go just before the bailiffs arrive, taking their stuff (or at least the stuff they want to take!) with them. Back to main site: www.lettingfocus.com
Copyright: David Lawrenson 2007