LANDLORD LICENSING AND REGISTRATION SHOULD BE CENTRALISED SAYS LETTINGFOCUS.COM

John Blackwood, a director of the Scottish Association of Landlords tells me he knows of many landlords who have just had their applications for the Scottish landlords register acknowledged and licenses issued by their local authorities – almost three years after they applied for them!
If the government goes ahead with similar proposals in England and Wales, will our local authorities or whoever administers it be as inefficient I wonder?
Perhaps, as Mr Blackwood suggests, it would be better to have a single central authority managing the scheme rather than having the whole thing handled by different town halls with varying level of efficiency.

BUT DO WE REALLY NEED LANDLORD LICENSING?
I would say if we must have it, then it must be enforced in a way that really drives out rogue landlords.
But let’s stop and think.
Who are these bad landlords, who do they prey on and how do they get away with it.
I suggest that a lot of these guys are letting to people in overcrowded accommodation.
I suggest that many of their tenant victims will be people who don’t know the law or who are not confident enough to stand up for themselves for fear that they will be evicted and wont find it easy to get another place to live.
Partly this will because they have a poor credit history (or none at all). I suggest many will be migrants, possibly illegal migrants with little English and perhaps also dependent on their “landlord” for a job.
Now let’s look at the position of a tenant who is not vulnerable but who has a poor landlord.
If this tenant’s landlord fails to carry put basic repairs or meet his landlords’ obligations under the law, the tenant can complain about their landlord and try to enforce their many rights.
OK, it is true, their landlord could carry out a retaliatory eviction at the end of a fixed term contract, but good tenants will soon find a good landlord. And they will know what signs to look for next time.

GOOD LANDLORDS AND GOOD TENANTS TEND TO GET TOGETHER
Personally, I like it when tenants come to me if they are good people but their previous landlord was the sort who could never quite get round to fixing the boiler or sort out the damp problem because I know they will really appreciate me.
The fact is that bad landlords end up with bad and vulnerable tenants and good landlords end up with good tenants and vice versa.
What licensing must do, if indeed it becomes law in England and Wales, is have in place very tough sanctions on those landlords who make VULNERABLE tenants lives a nighmare.
That must mean heavy fines which are enforced fast and a wide publication of the scheme especially among the most disadvantged.
But for goodness sake, leave good landlords alone.
And allow the good landlord to get rid of bad tenants too – and much faster than is allowed under the cumbersome court processes of today.

MORE TIPS ON USING A LETTING AGENT
Make sure you know the law. I know the law is deadly boring but as a landlord you are running a business and this means there are some things you legally have to do and some things you mustn’t do. And if you don’t comply you can face fines and even go to prison.
“Ah”, you say. “But if I’m using a letting agent they will deal with all the legal issues and my landlord responsibilities right?” Well, possibly yes, but don’t bank on it. Some agents still operate without any liability cover and are not part of any bonding scheme. If they go bust how long will it be until you hear about that? A few months, a year maybe?
And what would happen to any rent they were collecting for you in that time and all those gas checks that they are supposed to arrange for you?
So, you have to know the law (see chapter X) and occasionally check that they are doing what they should be doing for you as your agent.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of LettingFocus.com - the landlord experts. Read Property Articles.
I’m the author of “Successful Property Letting” which for the last 3 years has been the UK’s top selling property book - buy Property Investment Book. The new edition is for accidental and experienced landlords and is fully up to date with all the recent changes to tenancy deposit schemes, landlord registration and capital gains taxes.
I’m a property expert and property speaker - and I run the well known property blog that you are reading now.
I contribute to newspapers and a host of property websites, write a number of columns in the press and I provide general advice on property letting to anyone looking to buy property for themselves or to let.
What’s unique about lettingfocus.com is that we offer independent unbiased advice on renting out property because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier.
For landlords' insurance products such as rent guarantee cover and property insurance click on Ukinsurancenet. Don't forget to quote our reference code, LFOC, to get the best rates from them too. And find out about OTHER great deals we have arranged at our Property Affiliate page. More wil be added over the next month, once we have checked them out.
Copyright: David Lawrenson 2009. This blog is updated roughly once a week.
WANT TO BE KEPT UPDATED WITH OUR LATEST BLOGS?
Over on the right hand side under all the previous blog entries and the bit where it says “Links” and “Subscribe” you will see a button saying “Site Feed.”
Just copy the site feed link into your News Reader or News Aggregator. Even a non techie like me managed to do this.
Please note if you have a website & are thinking of reproducing material here - that’s fine but we DO require a link to the blog to be included, including also the links in this section. The full article including all links must be available to ALL VIEWERS of your site and not restricted.
WANT TO ADD A COMMENT
To add a comment to this post, you just click on “link to this post” then simply add your comment. To view past comments, again, you’ll need to click “link to this post” and view the comments (which appear at the bottom of the post.) All comments are moderated.

Local Housing Allowance Rates Are Too High & Open to Fraud say Lettingfocus.com. What’s Your Experience?

In our patch and the patches of many other landlords it is clear that Local Housing Allowance (LHA) rates are some way above private market rents.
Here in our area the local authority pays tenants the equivalent of £996 per month for a 2 bed property. But if you tried letting to private tenants who are not in receipt of this benefit it is not easy to get much over £870 for that kind of property.
So, no surprise that recently I have seen a few ads on letting sites where it says something along the lines of, “If you’re interested in letting to tenants on DSS/ LHA and are willing to say the rent is higher than it really is when I make a claim so we can share out the extra, then please contact me.”
Mmmm, this sounds a bit like fraud to me.
So the over-high LHA rates are making sure the taxpayer is being well and truly ripped off by being a green light to a few rogue landlords and tenants to try to “ring” the system.
So, please tell me if you are in an area where LHA is well above local rents.
We would also be interested in hearing about any cases where you know this kind of fraud is taking place. You don’t have to give details – we would just be interested in how widespread this practice is.
Let me know by emailing david@lettingfocus.com
Oh - and you may be wondering why are LHA rates so high?
Is it just that the Broad Market Rental Areas (BMRB) set by the Rent Service are just too wide and encompass too many diverse areas within a single BMRB? Yes, I would say so.
Could it also be that the high rates be a bribe by the government to get landlords to let to tenants on LHA (because landlords don't like the new system in which LHA is now normally paid to the tenant).
I think so.
The simple (though costly) solution to all this would be more council houses, but maybe I'm still living in the 1970s.
Thanks to LS for the tip off on this story. Local presence can help!

MORE TIPS ON USING A LETTING AGENT
Tell the letting agent what kind of tenant you want and don’t want. Think about who you want as well as how you do tenant reference checks.
Will you accept students? Animals? How about Student animals? Will you accept DSS? What should the tenants’ minimum income be?
Why tell the agent all this? Well, if you muck an agent about he will rightly have nothing more to do with you. So, be straight and be upfront. And confirm every conversation in writing too.
Tell the letting agent you will want to see the application form the tenant completed and the Tenant Report the agent gets back from the referencing company. Insist on reserving the right to speak to a prospective tenant before you agree to the letting. But only reject a tenant if there is a good reason to do so.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of LettingFocus.com - the landlord experts. Read Property Articles.
I’m the author of “Successful Property Letting” which for the last 3 years has been the UK’s top selling property book - buy Property Investment Book. The new edition is for accidental and experienced landlords and is fully up to date with all the recent changes to tenancy deposit schemes, landlord registration and capital gains taxes.
I’m a property expert and property speaker - and I run the well known property blog that you are reading now.
I contribute to newspapers and a host of property websites, write a number of columns in the press and I provide general advice on property letting to anyone looking to buy property for themselves or to let.
What’s unique about lettingfocus.com is that we offer independent unbiased advice on renting out property because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier.
Find out about some great deals we have arranged at our Property Affiliate page.
For landlords' insurance products such as rent guarantee cover and property insurance click on Ukinsurancenet. Don't forget to quote our reference code, LFOC, to get the best rates from them too.
Copyright: David Lawrenson 2009. This blog is updated roughly once a week.
WANT TO BE KEPT UPDATED WITH OUR LATEST BLOGS?
Over on the right hand side under all the previous blog entries and the bit where it says “Links” and “Subscribe” you will see a button saying “Site Feed.”
Just copy the site feed link into your News Reader or News Aggregator. Even a non techie like me managed to do this.
Please note if you have a website & are thinking of reproducing material here - that’s fine but we DO require a link to the blog to be included, including also the links in this section. The full article including all links must be available to ALL VIEWERS of your site and not restricted.
WANT TO ADD A COMMENT
To add a comment to this post, you just click on “link to this post” then simply add your comment.
To view past comments, again, you’ll need to click “link to this post” and view the comments (which appear at the bottom of the post.) All comments are moderated.

Tips for Choosing Letting Agents / How the UK’s dopey banks made a mess of buy to let mortgage lending by David Lawrenson

Following on from last weeks’ blog, where I said landlords are not suffering too much, it seems that some landlords are suffering after all – even in the face of record low interest rates.
Latest figures from the Council of Mortgage Lenders now show investors’ arrears rates are significantly higher than for standard residential.
So, what’s the truth?
Well, the truth is there are landlords and there are landlords.
Unfortunately, lots of would-be landlords did not do their research and believed all the hype spun by the many Get Rich Quick gurus and have gone on to make a complete muck up of it – bankrupting themselves in the process.
Many of these will have been to a guru’s seminar and went out and either bought existing housing with No Money Down from distressed sellers using bridging finance with a back to back next day remortgage or they bought new build ghetto flats with gifted or hidden deposits.
Both techniques have finally been stopped as the UK’s rather dozy mortgage lenders finally woke up to the fact that they had in fact just lent on 100% of the property’s value (or at least what the buyer paid.)
(Many borrowers would also use credit cards and loans for non existent kitchens to finance deals.)
With little understanding about how to be a landlord quite a few of these would-be investors got into trouble - and therefore so did the banks and building societies that lent them the mortgage cash.
On the other hand, landlords and property investors who ignored the hype, hopefully the type who read my property investing book – and listened to informed experts of the likes of Richard Bowser, Tom Entwistle and myself at property shows will have done rather well.

BUT WHY WERE BRITAINS MORTGAGE LENDERS CAUGHT OUT ON BUY TO LET?
That’s a very good question.
At a recent seminar I heard from John Corey, an American property expert about how in the USA, the types of techniques that borrowers were pulling here to raise big buy to let mortgage loans in which the borrower had no equity, had long been known to mortgage lenders and had either been stopped by law or through the use of intelligent underwriting techniques.
For example, by requesting up to a years worth of bank statements the American lenders could really assess a borrower’s true financial position. In the USA, it would have been impssible to raise say, £25K on a loan for something else one month and then use it as a deposit on a house the next month.
But in the UK, these kinds of things and many other sneaky tricks went on for years.
I suspct that many mortgage lenders in the UK did not have a clue about back to back re-mortgaging as a technique for someone to acquire a property with “No Money Down.”
OK, by sometime in 2006 and 2007 they had all finally woke from their slumber and have now stopped this kind of thing.
But if you get a buy let mortgage loan today, you will still walk out of the bank with virtually no help, no guidance or anything else to help you be a good landlord.
Unless you have read the right stuff you will have a good chance of becoming another arrears statistic on their buy to let loan book a few years hence.
A few years ago I contacted some senior figures in some of the banks (not easy – even getting their names is hard enough) and suggested that as a leading property author I could help them correct this failing. I’m still waiting for the call back.

MIND IF WE KICK YOU AGAIN SIR?
Don’t tell my partner but I have subscribed for most of the rights issues in the shares I have.
Many of these shares are well down on what I paid for them, so it’s a bit like asking a mugger if he would like to hit you and rob you again.
But the shares are all very heavily discounted and I figure that after the RBS’s famous 200 pence a pop rights issue surely, no one would be allowed to put out a rights issue prospectus which was so clearly full of nonsense.

TIPS FOR USING LETTING AGENTS
Don’t go with the letting agent that charges the lowest fees or one who claims he can get the highest rent. It is important yes, but not the only thing that counts. If the agent says they can get a premium rent. Fine. Ask them to prove what rent they have achieved for properties like yours by showing you comparables.
Ask other landlords which agents they use and trust. Then check if the agent is a member of a recognised trade association such as The Association of Residential Letting Agents which has a code of practice for members and client money protection schemes in place. Others bodies offering similar protection include The Royal Institution of Chartered Surveyors and the National Approved Lettings Scheme.
Landlords should check what protection the agent’s membership of a trade body gives them and if the agent is really still a member.
True, there are some very good and long established agents who are not members of any trade body for good reasons - like the very high cost of membership.
If you are set on using one of these, that’s fine, but make extra sure to check references and find out how long they have been in business.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of LettingFocus.com - the landlord experts. Read Property Articles.
I’m the author of “Successful Property Letting” which for the last 3 years has been the UK’s top selling property book - buy Property Investment Book. The new edition is for both accidental landlords and more experienced residental property investors and is fully up to date with all the recent changes to tenancy deposit schemes, landlord registration and capital gains taxes.
I’m a property expert and property speaker - and I run the well known property blog that you are reading now.
I contribute to newspapers and a host of property websites, write a number of columns in the press and I provide general advice on property letting to anyone looking to buy property for themselves or to let.
What’s unique about lettingfocus.com is that we offer independent unbiased advice on renting out property because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier other than through the links we have on our affilate scheme page. Find out about some great deals we have arranged at our Property Affiliate page.
For landlords' insurance products such as rent guarantee cover and property insurance click on Ukinsurancenet. Don't forget to quote our reference code, LFOC, to get the best rates from them too.
Copyright: David Lawrenson 2009. This blog is updated roughly once a week.
WANT TO BE KEPT UPDATED WITH OUR LATEST BLOGS?
Over on the right hand side under all the previous blog entries and the bit where it says “Links” and “Subscribe” you will see a button saying “Site Feed.”
Just copy the site feed link into your News Reader or News Aggregator. Even a non techie like me managed to do this.
Please note if you have a website & are thinking of reproducing material here - that’s fine but we DO require a link to the blog to be included, including also the links in this section. The full article including all links must be available to ALL VIEWERS of your site and not restricted.
WANT TO ADD A COMMENT
To add a comment to this post, you just click on “link to this post” then simply add your comment.
To view past comments, once again you’ll need to click “link to this post” and view the comments (which appear at the bottom of the post.) All comments are moderated.

Real Evidence property prices have turned says LettingFocus.com

Cripes property prices seem to be turning up a bit in our part of London, at least for family type houses in average nick, which is not good news if you, like me were hoping that low prices would be around for a while.
To give you an example of this I had my beedy eyes on a nice two bed house for a first time buyer client in SE London back in January 2009 which was up for sale by a big landowning estate.
All it needed was £3K in basic redecoration. It would have been lettable right away at a rent of at least £900 per month or the guy could have lived in it himself.
Over Xmas, when all around was doom and gloom, it was actually marked down to £200K from £225K but this time around I was just too cheeky and went in too low at £185K. (I blame THE BOSS for the over-cheekiness!)
But the seller wasn’t budging and he put it on at a property auction in late January where the property fetched 195K, just over the £185K reserve price.
Since then the general economy and the state of the property market has started to look at lot rosier so the buyer put it back on the market in late April - in exactly the same condition - and has just sold it through an estate agent at £245K.
The investor probably paid cash at the property auction which will give him a profit of at least £40K after costs and an allowance for the opportunity cost of his own money.
So good luck to that property investor and well done to him.

PROPERTY AUCTIONS – WHY I AM NOT THEIR BIGGEST FAN
Now I have to say that I am not the biggest fan of buying property at auction and this is usually because… 1) Most times I am not a cash buyer and 2) Most of the property I see coming up at auction is rarely freehold property in anything like a decent condition. (I only buy leasehold flats that are self contained, in good condition and with a good management company where the directors are also the leaseholders – these can be pretty rare especially at auction.)
Property auctions always have lots of run down flats with poor management and duff leases. Where freeholds are for sale they are usually “building projects” (which I don’t have the time for right now.)

IF YOU NEED A MORTGAGE YOU ARE AT A DISADVANTGE AT A PROPERTY AUCTION
However, that property (the one that sold at auction at which sold at 195K) was unusual because it was a freehold house that needed not much doing to it.
Trouble is I didn’t want to chuck half a grand on a banks’ mortgage valuation just to be out bid at the auction.
And that is the trouble with auctions because at a property auction it is much better if you are a cash buyer.
So, I lost out on a chance to make £40K (or if it has been me buying, to get a great rental yield and a super investment)
Never mind, it all ended OK for me.
I went on to buy a similar property just down the road in better condition via my old trusted estate agency route for about the same money - £203K – so honours even on that one.
If you see the potential in flats or building projects and you want to go down the auction route and buy property this way take a look at my article Property Auctions.

WHAT DOES YOUR CREDIT FILE SAY ABOUT YOU?
Apparently, record numbers of people are checking their credit files to find out exactly what their credit record file says about them.
No doubt, the prompt for this is the fact they are all of a sudden being turned down for credit by our newly tight fisted banks and building societies.
Read my article; Checking Your Credit Record for more on how to check your file.

HOUSE PRICES
Finally, on the subject of house prices again, it always amuses me how when commentators talk about this it really gets people incredibly worked up.
Even more worked up than a bunch of guys discussing the England football team. Ok, well not quite that bad.
You can see this from all the vitriolic comments the big papers get in their online edition whenever the subject of the direction of house prices comes up.
Well, as you know, I have stated my colours firmly to the mast.
I think prices of family houses in the range £200k – 600K in London and the South East and many other parts of England and Wales have reached the bottom or near enough.
(Of course another Fred Goodwin type cock up or a flu pandemic will put the tin hat on any increase in prices, but these things are impossible to predict and if you don’t like risk you should stick with National Savings index linked certificates instead of property!)
In my work as a Property Finder I am certainly getting a lot of work right now from people who need help buying in the right areas. And that is a sure sign that people think property prices are going up.

LANDLORDS SUFFFERING SAY THE MEDIA
Mmm, I’m not so sure about that one.
Even if rents were down 20% on the year (which they aren’t for the type of property I buy), as most landlords existing mortgages are down about 50% following big cuts in interest rates, unless I’m “Mr. Dim at Maths” that surely means more profit for landlords?
Unless you have to sell now of course and therefore cop a potential capital loss. However most landlords are in it for the long term so won’t be uduly worried by rents that are down a bit.

AM I RIGHT YET RAY?
About 3 years ago I predicted that the proportion of let property could hit 25% by 2025 (unless the regulatory and tax environment facing landlords changed significantly). A leading commentator said I was naive. Well Ray, as the proportion of property that is let continues to increase rapidly to almost 13%, maybe you might still owe me a drink come 2025.

DON’T SHOOT THE PRESIDENT
I don’t normally do politics but Obama is such a breath of fresh air after the previous incumbent especially on foreign policy that I think some credit for the economic recovery must be attributed to him.
Partly, this must be down to the fact that his words, if translated into action, will certainly make the world a much fairer and safer place for us all. I just hope that some nut case “No Surrender” settler in Israel hasn’t got the poor man in his sights.
More on politics... will someone please get rid of that awful BBC political correspondent -the chappie with the glasses. You're not the news, Mister!
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of LettingFocus.com - the landlord experts. Read Property Articles.
I’m the author of “Successful Property Letting” which for the last 3 years has been the UK’s top selling property book - buy Property Investment Book. The new edition is for accidental and experienced landlords and is fully up to date with all the recent changes to tenancy deposit schemes, landlord registration and capital gains taxes.
I’m a property expert and property speaker - and I run the well known property blog that you are reading now.
I contribute to newspapers and a host of property websites, write a number of columns in the press and I provide general advice on property letting to anyone looking to buy property for themselves or to let.
What’s unique about lettingfocus.com is that we offer independent unbiased advice on renting out property because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier.
Find out about some great deals we have arranged at our Property Affiliate page.
For landlords' insurance products such as rent guarantee cover and property insurance click on Ukinsurancenet. Don't forget to quote our reference code, LFOC, to get the best rates from them too.
Copyright: David Lawrenson 2009. This blog is updated roughly once a week.
WANT TO BE KEPT UPDATED WITH OUR LATEST BLOGS?
Over on the right hand side under all the previous blog entries and the bit where it says “Links” and “Subscribe” you will see a button saying “Site Feed.”
Just copy the site feed link into your News Reader or News Aggregator. Even a non techie like me managed to do this.
Please note if you have a website & are thinking of reproducing material here - that’s fine but we DO require a link to the blog to be included, including also the links in this section. The full article including all links must be available to ALL VIEWERS of your site and not restricted.
WANT TO ADD A COMMENT
To add a comment to this post, you just click on “link to this post” then simply add your comment.
To view past comments, again, you’ll need to click “link to this post” and view the comments (which appear at the bottom of the post.) All comments are moderated.

Mortgage lenders evict tenants too easily say LettingFocus.com

In the press at the mo’ there is a lot of stories about tenants who get evicted from a property where their landlord lets out their property without the lenders consent and then failed to pay the mortgage.
It seems unfair on good tenants to turf them out when they have done nothing wrong and it seems to me that the mortgage lenders are still not doing enough to help out.
To illustrate this I had a correspondence with the Council of Mortgage Lenders about this.
Please read it and make your own mind up.

The Council of Mortgage Lenders (CML) in a press release said: “……..Lenders are also sympathetic to the position of tenants of landlords who have failed to gain consent to let their property, but the legal position is more complicated. Lenders have contractual obligations to the borrower, despite their breach of the mortgage terms, and there are also potential legal constraints on their ability to collect rent from tenants in this position. The CML looks forward to working with the government to resolve these complexities and ensure that the notice period for these tenants is consistent with the lender's other legal obligations.”

So, at LettingFocus.com we asked the CML: “Can you elaborate on what “the legal constraints and obligations” are please?”

They replied: “Basically it's the potential conflict of interest between what may be best for the tenant and best for the borrower.
Lender's contractual relationship is with borrower not tenant (and so lender has duty to obtain best price that can reasonably be obtained etc, which could potentially be compromised).
Also, lender can't collect rent without recognising (ie authorising) the tenancy – (which) changes the legal status of the tenancy. If this conflicts with the best interests of the borrower, the lender's actions could be contested.
Plus there is also - not a legal point but a relevant one - the fact that on a case-by-case basis the lender may end up assessing that its own commercial position will be worse - ie its losses will be greater - if it authorises the tenancy (with the costs that may involve) and cannot sell until later than if it takes possession and sells sooner.
None of these issues apply with bona fide buy-to-let, only with owner-occupier mortagges where the borrower has failed to get consent to enter into a tenancy.

We replied: “We wonder, notwithstanding the points you make, that it may be in best interests of everyone if the lender were to accept rent, in those cases where the tenant is up to date with previous payments to their errant landlord.
The lender could take the rent and then re-sell property with tenants in it.
Speaking as a landlord-investor I would love to buy a repossessed property which had a tenant in it from a lender, especially where the lender could show me that they have received all the rent on time from said tenant from the time they took it over as a receiver of the rents.
I’m sure I’m not alone in this.
I would benefit by getting a property with tenants in it who I know have paid rent…. Surely that would be better than having it stand empty having stood neglected for 6 months, and possibly damaged by tenants who were cross they have been evicted through no fault of their own.
I wonder whether this has avenue been explored fully by the lenders.
OK, you may have to change your existing Agreements with your borrowers but I can’t see why it would not be possible to do this.

The Council of Mortgage Lenders retorted with this: “Well, there are several points here – including that as a lender you can’t just unilaterally change the contract you have with your borrower (even if you would like to, and even if your borrower is in breach), that the valuation of a tenanted property is discounted from an open market value valuation and you may therefore be accused of not getting best price and worsening the borrower’s shortfall etc etc – that also need to be considered!
I think the overall point is that dealing with these issues is just not quite as straightforward as it looks – and is actually quite difficult to deal with on a “one-size-fits-all” basis, as circumstances will vary and assessing the likely outcome of different courses of action is also difficult.
However, thanks for your thoughts and I can certainly assure you lenders are not idle on these issues and are trying to work solutions (including of the type you describe) that make sense.

At LettingFocus, our view still remains that as landlords we would love to buy a property with good tenants already in it and if a bank could confirm that they had paid rent on time during the period the property had been repossessed from their errant landlord, so much the better.
I’m sure that with that assurance, properties with tenants in them would fetch a premium price when sold, not a discount.
So, I think the CML and the mortgage lenders could at least try to re-sell these properties with tenants in the property. The rent could be used to pay off mortgage debt owed by the defaulting landlord and the property could sell faster.
And best of all a good tenant would not lose their home.
Let me know if you agree.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of LettingFocus.com - the property investing experts. Read Property Articles.
I’m the author of “Successful Property Letting” which for the last 3 years has been the UK’s top selling property book - buy Property Investment Book.
The new edition is for accidental and experienced landlords and is fully up to date with all the recent changes to tenancy deposit schemes, HMOs, licensing and capital gains taxes.
I’m an expert property writer and property speaker - and I run the well known landlords blog that you are reading now.
I contribute to newspapers and a host of property websites, write a number of columns in the press and I provide general advice on property letting and consulting to anyone looking to buy property for themselves or to let out. I can help private individuals with any aspect of buying property or buy to let.
What’s unique about lettingfocus.com is that we offer independent unbiased advice on renting out and investing in property because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier and do not receive commissions from these sources.
On the contrary, we are often asked to evaluate other property investments.
Find out about some great deals we have arranged at our Landlords Links page.
Copyright: David Lawrenson 2009. This blog is updated roughly once a week.
WANT TO BE KEPT UPDATED WITH OUR LATEST BLOGS?
It’s easy.
Over on the right hand side under all the previous blog entries and the bit where it says “Links” and “Subscribe” you will see a button saying “Site Feed.”
Just copy the site feed link into your News Reader or News Aggregator. Even a non techie like me managed to do this.
Please note if you have a website & are thinking of reproducing material here - that’s fine but we DO require the full links shown in each blog to be included, including also the links in this section. The full article including all links must be available to ALL VIEWERS of your site and not restricted to members.
WANT TO ADD A COMMENT
The way the technology to add and read comments works with Blogger is a tad illogical, I’ll admit.
To add a comment to this post, you will need to click on “link to this post” then simply add your comment.
To view past comments, once again, you’ll need to click “link to this post” and view the comments which appear at the bottom of the post.
All comments are moderated.

MPs, second homes, capital gains tax and Property Watch by Lawrenson of LettingFocus.com

In my last post I said that one of the real reasons why a landlord register and landlord licensing is on the agenda is that the powers in Westminster think that lots of landlords are not paying their taxes and so a register would give HMRC more info on this.
Of course, the rogue landlords – the ones who fail to repair their properties and treat tenants like dirt - will not be inclined to register and most definitely won’t if it involves making them liable to pay tax, thus registering the whole exercise potentially pointless and making the register just another bit of bureaucracy for good landlords, but hey, that’s another story covered last week.
But how funny it was, then, to to see some legislators caught with their noses in the trough on second homes – as if their generous final salary scheme was not enough.
A lot of this is to do with the definition of what constitutes a principle private residence or PPR (whch are capital gains tax exempt) and the dubious practice of flipping from one house to another to claim PPR on both.
Lots of landlords have already sailed pretty close to the wind on this and I dare say a few MPs will have got the UK’s top selling Property Investment Book to read the very detailed tax chapter which explains in detail how capital gains taxes can be ameliorated by living in a let property for a time.
Now that some of them have rather taken the mickey (to put it mildly) by overusing exemptions like this we may expect to see the whole area of PPR and Private Letting Relief being looked at again.
This could end up badly for landlords.
GUM TREE NOT WHAT IT WAS
Nothing that’s free ever lasts too long and I see landlord friendly letting site GumTree seems to have now altered their system so it’s not so easy any more to refresh ads and still appear near the top of the next days listings.
Also, they seem to have got pretty tight about what constitutes a professional landlord – making pretty well everyone pay for ads as can be seen by the fact theat there are now very few private ads that are now posted at the site.
They even banned a guy I know who has just two let properties! Hardly makes him a pro does it? (He actually complained and they re-instated his ads.)
But on the old internet there is always someone else ready to come along and offer a freebie.
At the site LetUrself.co.uk they have set up a website for landlords who don’t need a high street letting agent and who are happy to do a fair bit of the legwork themselves. A bit like Gumtree in the old days then!
They offer all the same services of a traditional letting agency so you can get your let property on the big portals and if you register before the end of May, then for every property that you upload, you will receive 28 days free advertising on the website.
Sounds good.
PROPERTY WATCH ON BBC
Did you see Property Watch?
Not a bad show apart from the fact that someone had told the usually great presenters to gurn a la Gordon B on Youtube. Didn’t bother me but it annoyed The Boss in our house.
I actually contacted the show’s researcher and had a perfectly successful landlord lined up for them.
He has 60 houses in the north Manchester area. He’s a great down to earth chap who has done very well in buy to let and who has great relations with his tenants too.
Unfortunately, the show clearly wanted someone who made a muck up in buy to let and so despite speaking to my man 8 times they put someone on the show that had made a complete hash of being a landlord.
Typical anti landlord media in other words, but if scare stories like the one they featured keeps out a landlord who doesn’t want to find out how to do things properly by frightening them off, then that may be good for tenants who can also suffer if their landlord doesn’t know the ropes.
Oh, two years ago arch property bear, Merryn who featured on the programme every night and is usually an excellent analyst, said to invest in Japan. I did, and the two investment trusts I put money in are both 40% down.
So the message is make your own mind up.
And if you think these shows could do with some new faces and maybe have the author of the UK’s top selling property book on, do let them know won’t you.
BIG BUY TO LET MORTGAGE LENDER GIVES OUT MONEY
I have a few mortgages with a certain big buy to let mortgage lender.
I pay an interest only mortgage so could not figure out why the final balance on my mortgage statement was higher than the opening balance 365 days earlier.
The geniuses at their call centre tried in vain – “Its daily balances….it’s when the interest is applied that is different from the pay date… blah blah” but could not give me a sensible answer and in the end gave up and sent me a credit for the difference.
I suggest you check your mortgage account statement and if you find the same thing has happened to you, you give them a ring and get your money back.
I’ve phoned the PR department of this lender for their view on this but they clearly can’t be bothered to get back to me so expect to see this in the press soon and the lender named.
On a related point, see also my article on claiming back unfair mortgage exit fees
BUY TO LET MORTGAGES STILL COSTLY
For new mortgages, I see that mortgage lenders have cut mortgage interest rates, “application fees” and deposit requirements for standard residential mortgages.
But over on buy to let mortgages, the rates, fees and deposit requirements are staying stubbornly high.
It’s still impossible to get a buy to let mortgage unless you have 25% of the equity to put in and can also stomach application fees of 3% on your mortgage loan on top.
So, the would-be new landlord is still frozen out.
With a lack of players in the market the lenders who are still involved are getting away with this nonsense.
Surely, the downside risks for the mortgage lenders cannot justify these daft rates, high deposit requirement and exclusions.
Hopefully, a more dynamic lender will be along soon and shake it up.
Come on in, Santander – who seem a lot more savvy than most of our bankers!
If you need help navigating landlord mortgages, try the broker, Mortgagesforbusiness.co.uk. Click on Great Rates on Buy to Let Mortgages and quote LettingFocus for their special offer of £250 brokerage on buy to let mortgages which they have set up especially for us.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of LettingFocus.com - the property investing experts. Read Property Articles.
I’m the author of “Successful Property Letting” which for the last 3 years has been the UK’s top selling property book - buy Property Investment Book.
The new edition is for accidental and experienced landlords and is fully up to date with all the recent changes to tenancy deposit schemes, HMOs, licensing and capital gains taxes.
I’m an expert property writer and property speaker - and I run the well known landlords blog that you are reading now.
I contribute to newspapers and a host of property websites, write a number of columns in the press and I provide general advice on property letting and consulting to anyone looking to buy property for themselves or to let out. I can help private individuals with any aspect of buying property or buy to let.
What’s unique about lettingfocus.com is that we offer independent unbiased advice on renting out and investing in property because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier and do not receive commissions from these sources.
On the contrary, we are often asked to evaluate other property investments.
Find out about some great deals we have arranged at our Landlords Links page.
Copyright: David Lawrenson 2009. This blog is updated roughly once a week.
WANT TO BE KEPT UPDATED WITH OUR LATEST BLOGS?
It’s easy.
Over on the right hand side under all the previous blog entries and the bit where it says “Links” and “Subscribe” you will see a button saying “Site Feed.”
Just copy the site feed link into your News Reader or News Aggregator. Even a non techie like me managed to do this.
Please note if you have a website & are thinking of reproducing material here - that’s fine but we DO require the full links shown in each blog to be included, including also the links in this section. The full article including all links must be available to ALL VIEWERS of your site and not restricted to members.
WANT TO ADD A COMMENT
The way the technology to add and read comments works with Blogger is a tad illogical, I’ll admit.
To add a comment to this post, you will need to click on “link to this post” then simply add your comment.
To view past comments, once again, you’ll need to click “link to this post” and view the comments which appear at the bottom of the post.
All comments are moderated.

Landlords licensing, register & build to let - LettingFocus.com

It’s looking increasingly likely that all private landlords in England and Wales will soon have to be registered before they can let residential property.
The costs are likely to be low at about £50 per annum and will cover all private landlords but, natch, it looks unlikely to apply to those models of efficiency, the social landlords!
For decent landlords it looks unlikely that you will have to do anything more than you do now, apart from have to pay another fee, of course.
This new idea comes on top of extra work like tenancy deposits, HIPs and getting an HMO license (if you operate in that sector). all of which have been introduced in the last 3 years.
GOOD LANDLORDS WONT NEED TO WORRY
Good landlords already carry out repairs and they don’t intimidate tenants. And why should they? After all, decent landlords want to keep decent tenants not lose them.
The intention from the government is that the system will operate with a “light touch” to root out rogue landlords, but another compliance cost and another level of bureaucracy will be just one more thing to scare off both would-be landlords and the new “accidental landlords” who have fallen into letting because they cannot sell their house.
No wonder most letting agents think it is a good idea as more and more novice landlords will be ever more likely chuck their lot in with a letting agent rather than read a book on letting property and learn to do it right themselves.
BUT IS THIS REALLY ABOUT GETTING TAX EVADERS?
It is likely that a landlord would get a licence number which would have to be shown on all documents related to a letting.
A spin off of all this is that it would make it easier for HMRC to identify tax evaders and many think this is the real driver behind the move - because it is well known that the taxman thinks lots of landlords are evading tax. (If that is the case, we suggest a trawl of Land Registry data to show multiple ownership would be a better starting point!)
LETTING FOCUS’S VIEW
At LettingFocus.com we say another piece of regulation on top of all the others probably wont hurt too much but how it will be implemented is key.
There are undoubtedly some bad landlords out there and weak letting agents too - and if this roots them out then that is for the good of society.
But if it is just another bit of bureacracy with no teeth that will further put off good landlords, then it will be a waste of time and money.
One can only hope that implementation is better than it was In Scotland, the land of Big Government, where they already have a landlords registration scheme.
There, in year one, only one in 6 landlords bothered to register at all and rogue landlords continue to ignore the scheme despite the penalties.
WHAT ABOUT IMPROVING THE LUMBERING COURTS PROCESS TO SPEED UP EVICTIONS?
Good landlords will also rightly question when something will be done to speed up their ability to recover their property from bad tenants which can take 6 months to go through the lumbering courts process all the way to bailiffs and an eviction.
Indeed recent figures show it is taking longer than ever as more people fall behind on rental payments.
SMALL LANDLORDS MISS OUT TO THE BIG BOYS - AND IT DOES NOT SEEM FAIR The proposal for landlords licensing falls out of the Rugg Report from last year but it’s a shame that the Government is not expected to back Rugg’s other call for tax relief for landlord repairs, such as new roofs, windows or boilers.
And hey, there are other plans afoot too because the Homes and Communities Agency has invited big property firms and other investors to support a fund to build lots more homes for rent – so called “build to let”.
I can see the logic of this. It would restart the house building sector and provide places for people to live. All good!
But what I object to is that the government seems to be negotiating incentives for big investors like stamp duty tax breaks or guarantees to underwrite rents on unfilled properties to get them on board.
This is unfair on two counts.
First, the Rugg report clearly said that small landlords do the job better.
Second, government incentives almost certainly will not be available to small scale landlords and so will penalise them and create an uneven playing field.
But can we be surprised?
The current government seems to be getting increasingly close to big business as we can see from other industries - just look at food retailing where Tesco and the other big boys have been allowed to wipe out the competition from the smaller players.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of LettingFocus.com - the property investing experts. Read Property Articles.
I’m the author of “Successful Property Letting” which for the last 3 years has been the UK’s top selling property book - buy Property Investment Book.
The new edition is for accidental and experienced landlords and is fully up to date with all the recent changes to tenancy deposit schemes, HMOs, licensing and capital gains taxes.
I’m an expert property writer and property speaker - and I run the well known landlords blog that you are reading now.
I contribute to newspapers and a host of property websites, write a number of columns in the press and I provide general advice on property letting and consulting to anyone looking to buy property for themselves or to let out. I can help private individuals with any aspect of buying property or buy to let.
What’s unique about lettingfocus.com is that we offer independent unbiased property advice because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier and do not receive commissions from these sources.
On the contrary, we are often asked to evaluate other property investments.
Find out about some great deals we have arranged at our Landlords Links page.
Copyright: David Lawrenson 2009. This blog is updated roughly once a week.
WANT TO BE KEPT UPDATED WITH OUR LATEST BLOGS?
It’s easy.
Over on the right hand side under all the previous blog entries and the bit where it says “Links” and “Subscribe” you will see a button saying “Site Feed.”
Just copy the site feed link into your News Reader or News Aggregator. Even a non techie like me managed to do this.
Please note if you have a website & are thinking of reproducing material here - that’s fine but we DO require the full links shown in each blog to be included, including also the links in this section. The full article including all links must be available to ALL VIEWERS of your site and not restricted to members.
WANT TO ADD A COMMENT
To add a comment to this post, you will need to click on “link to this post” then simply add your comment.
To view past comments you’ll need to click “link to this post” and view the comments which will appear at the bottom of the post.
All comments are moderated.