Damage By Water Leaks and How Landlords Can Reduce Their Impact and Save Costs

January 31st, 2012

In this blog post by LettingFocus.com, we explain why smart and insured tenants can cut a landlords repair bills, especially repairs due to damage caused by leaks of water.

It’s that very cold time of the year when landlords are always pretty busy.

As soon as the weather gets cold, the inevitable boiler breakdown will occur and it’s then that it is imperative that you have a good local heating mechanic (or engineer as they are called in the UK) to come out and affect repairs, fast.

And if you have a dopey tenant, it’s often around this time of year that they decide to forget to tell you about that small leak that keeps making the kitchen floor wet. Their delay will cause even more damage to decorations, carpets, walls and ceilings in the rest of the building.

On top of that, the cool, wet summer of 2011 has meant that condensation problems are very bad this year. So tenants who fail to air their homes, will be seeing the characteristic spotty, black condensation-related mould appear on the inside of exterior north and east facing walls.

Get Smart Tenants

Landlords’ best bet to manage issues with damp and leaks is to ensure that they choose tenants who are clued up and practical in the first place.

This is because clued up tenants are a landlord’s first line of defence. So when they discover a leak the occupiers should always know how to turn the mains water off. (All landlords should give their tenant customers a guided tour and leave them with a laminated guide which points out where the water stop valve, gas cut off switch and the electricity control unit is.)

And, next, the tenant should be straight on the phone to you or to your people who can fix the problem permanently as soon as possible.

I try to select tenants who have some of what my grandmother used to call “gumption.” And whether they have gumption or not, often becomes apparent before you let, when you are still taking references.

The smart ones (the ones with gumption) always decide whether they like a property quickly, and they don’t delay in getting hold of the references and documents you need to see. (The really smart ones – less than one percent of all applicants – have references with them when they go out to view a place!)

These kinds of people are my tenants, though occasionally, as is the case now, I will end up with one with little gumption who has somehow slipped through my net.

Insurance Issues

At the tenancy inception, along with the House Guide, I always write to my tenants to “strongly advise them to take out contents insurance and to ensure that this also includes accidental damage cover.”

Of course, I can’t force them to take out suitable and extensive contents  insurance, but if they do so, it should mean that things like carpets are covered if, say, they drop a hot iron on it or spill wine on the carpet. And I won’t have to go to the trouble of making a deduction against their deposit, if it was their fault – which I hate doing.

If tenant negligence and delay has made damage worse than it would have been, a landlord is fully entitled to make a deduction from the deposit. The reason is that a tenant has a duty to behave in a tenant like manner, which means he should take the same reasonable precautions as any other householder would.

Right now, I unfortunately have a set of tenants whose negligence in not sorting out an obvious leak quickly (either by fixing it themselves or calling my plumber) will mean that they will have to pay the bulk of the cost to fix the decoration that’s been damaged.

Though damage to walls and ceilings is a claim on the buildings insurance, as is typical of most buildings insurance for let properties in blocks these days, the excess is a whopping £500, so I’m looking to the tenants to make up this excess cost.

Importance of a Good Inventory

Of course, I had a thorough independent inventory done at the outset of the tenancy with photos, and the tenants have already admitted negligence, so there is not likely to be a problem.

It’s just a shame that tenants who lacked “gumption” managed to slip through my net. And it’s a shame, for them, that come of the cost to fix the problem will have to come out of their deposit.

And unless they start to show some gumption and common sense, I may not offer to extend the tenancy at the end of the fixed term.

Shop Around for Buildings Insurance

Our final observation is that landlords should look carefully at the excesses on buildings insurance claims.

Many insurers now impose very high excesses for claims for damage caused by water leaks. As ever, the best advice is to shop around for the best insurance deal – and that means both premium and level of cover.

ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Private Rented Sector Consultancy and advice.

Services to Businesses and the Public Sector

We are advisors to a range of organisations including banks, building societies, local authorities, social housing providers, institutional investors and insurers. We help them develop and improve their services and products for private landlords.

We also write for property websites, speak at property events (send an email to david@LettingFocus.com to find out about our next event) and we are regularly quoted by the media.

Services for Private Landlords

We also help landlords and property investors by showing how to make money in the private rented sector using ways which are fair to tenants and which involve minimal risk to the investor.

AT OUR WEBSITE LETTINGFOCUS.COM:

HOME PAGE OF THIS BLOG click here: Blog

To read blog posts on related posts use the tags and categories at the bottom of each post (after the list of links), or over to the right of this page – where, you can click on “Select Categories” and use the pull down menu to read all the posts on any Category that interests you.

THE HOME PAGE OF OUR MAIN SITE

Four our main home page click here:  http://www.LettingFocus.com

For general info on our CONSULTING SERVICES and also to find a small sample of links to where our comments have been featured in the National Press please click: Consultancy and Seminars

For ONE TO ONE PRIVATE CONSULTANCY FOR PRIVATE LANDLORDS click here: Property Advice

TO READ CLIENT TESTIMONIALS – from both organisations and private landlords click here: Testimonials

BUY “SUCCESSFUL PROPERTY LETTING”

Our book is the highest selling property book in the UK. Click here to Find Out More and Buy it at Amazon. If you are from an organisation and would like to bulk buy at least 50 books please ask us for special rates.

TO JOIN OUR FREE NEWSLETTER and get our latest Newsletter which goes to over 3,000 people (as at December 2011) just send an email to david@LettingFocus.com

We do not spam or sell our mailing list to advertisers, though we occasionally  mail landlords about good products from third parties. Please put us on your “white list” to ensure you receive our emails.

OFFERS ON PRODUCTS FOR LANDLORDS and TO ADVERTISE YOUR PRODUCTS to LANDLORDS click here: Landlords Resources

PERUSE LAST TEN BLOGS BY GETTING THE RSS FEED: Click Here

NEXT SEMINAR EVENT FOR LANDLORDS: Landlord and Property Letting Seminar

Copyright of Blog: David Lawrenson 2011 and 2012. Please link to us here or quote us.We actively pursue copyright infringements. The blog is updated once a week.

TWITTER PAGE For my thoughts on property, personal finance, plus other random things from sport, to 80s and 90s Indy Music, to tsunamis to musings on boardroom pay, plus my (usually) centre left “take” on politics please see our Twitter page.

LINK TO THIS BLOG OR TO OUR WEBSITE

Tags: , , , , ,
Posted in Buy to Let Insurance, Insurance for Let Property, Landlords Insurance, Property Letting Insurance | Comments Off

The Private Rented Sector and Some Key Issues for Government

January 25th, 2012

I was quoted extensively at the Guardian Housing Network blog last week and I think it is worth highlighting the key points I made.

Why the PRS is in the News

1. The private rented sector (PRS) is increasingly in the news and will remain so, partly because of its growing size and partly because of rising rent levels, which after a quiet decade have begun to soar, especially in economically advantaged areas like London.

2. This has led to some calls for rent control, but we think this would be too hard to enforce in the real world competitive marketplace and likely to lead to tenants offering other payments to secure their desired property.

3. Rising rents, like growing house prices, are simply a consequence of a lack of housing and a bulging population. In this matter, the PRS is indivisible from the rest of the housing market and the solution is the same: we simply need more homes.

Buy to Let Lenders Have an Impact on Length of Tenancy Agreements

4. Despite popular perceptions, our findings and those of other studies, including a recent one from the National Landlords Association, are that the majority of landlords actually want to hold on to good tenants for a long time – sometimes even if it means they have to accept less than market rent.

5. However, if there is a mortgage on the property, landlords will usually be restricted to offering tenancy agreements with fixed terms of no more than a year, because terms and conditions in their buy-to-let mortgage. Our work with some of the lenders has challenged the logic of this and I’m sure we will see longer-term assured shorthold tenancies become the norm in the future.

Why Many Landlords Fight Shy of LHA Lets

6. Compared to “non-LHA lets”, letting a property to tenants who are dependent on Local Housing Allowance (LHA) is seen as a huge extra hassle for landlords for a whole host of reasons.

- In a private, non LHA let, a landlord is paid rent in advance and usually there will also be a deposit which can be claimed against in the event of damage (providing the landlord did a thorough inventory at start and end of the tenancy.) There is usually no deposit on LHA lets and local authority bonds  – where available – can be hard to claim against.

- Tenants on LHA have to complete a lot of paperwork to set up their claim and the Housing Benefit department can often be slow to process these and start payments. LHA awards can also stop without warning simply because the tenant’s eligibility for support has changed. Delays in set up and changes in eligibility threaten the tenant’s ability to pay the rent.

- Under buy-to-let mortgage conditions some lenders still don’t allow a landlord to let to “non working” people. Insurance can also cost more too.

- LHA payments are now limited by caps and also to the 30th percentile of local market rents, setting a limit to what landlords can charge.

- Constant tinkering with the system of LHA / Housing Benefit over the years has confused landlords. Many are no longer sure how it works, and therefore avoid lets to LHA dependent tenants altogether.

Only when these some of these differences and problems are removed will significant numbers of landlords be willing to let to tenants who are dependent on LHA.

Government, Licensing, Accreditation and Landlords – the Regulatory Battleground

7. There is more that councils could do to improve the way they work with private landlords while still driving out the small rogue element. In particular, they need to sharpen up the marketing of the products and solutions they have for the LHA end of the private landlord market, stop internal wasteful competition between local authorities and housing associations and think more like private landlords  – whose main enemies are cost, time, risk and “hassle”.

8. In the short term, national and local government resources should be shifted away from universal landlord accreditation and licensing and onto uncovering the worst landlords – those who abuse tenants and let unfit properties.

9. But in the medium term accreditation may be inevitable. When it comes, the focus should be on offering simple, easy to join schemes of real value to private landlords, and thus their tenant customers -with any surplus directed to unmasking rogue landlords, not lost to administration.

ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Private Rented Sector Consultancy and advice.

Services to Businesses and the Public Sector

We are advisors to a range of organisations including banks, building societies, local authorities, social housing providers, institutional investors and insurers. We help them develop and improve their services and products for private landlords.

We also write for property websites, speak at property events (send an email to david@LettingFocus.com to find out about our next event) and we are regularly quoted by the media.

Services for Private Landlords

We also help landlords and property investors by showing how to make money in the private rented sector using ways which are fair to tenants and which involve minimal risk to the investor.

AT OUR WEBSITE LETTINGFOCUS.COM:

HOME PAGE OF THIS BLOG click here: Blog

To read blog posts on related posts use the tags and categories at the bottom of each post (after the list of links), or over to the right of this page – where, you can click on “Select Categories” and use the pull down menu to read all the posts on any Category that interests you.

THE HOME PAGE OF OUR MAIN SITE

Four our main home page click here:  http://www.LettingFocus.com

For general info on our CONSULTING SERVICES and also to find a small sample of links to where our comments have been featured in the National Press please click: Consultancy and Seminars

For ONE TO ONE PRIVATE CONSULTANCY FOR PRIVATE LANDLORDS click here: Property Advice

TO READ CLIENT TESTIMONIALS – from both organisations and private landlords click here: Testimonials

BUY “SUCCESSFUL PROPERTY LETTING”

Our book is the highest selling property book in the UK. Click here to Find Out More and Buy it at Amazon. If you are from an organisation and would like to bulk buy at least 50 books please ask us for special rates.

TO JOIN OUR FREE NEWSLETTER and get our latest Newsletter which goes to over 3,000 people (as at December 2011) just send an email to david@LettingFocus.com

We do not spam or sell our mailing list to advertisers. Please put us on your “white list” to ensure you receive our emails.

OFFERS ON PRODUCTS FOR LANDLORDS and TO ADVERTISE YOUR PRODUCTS to LANDLORDS click here: Landlords Resources

PERUSE LAST TEN BLOGS BY GETTING THE RSS FEED: Click Here

NEXT SEMINAR EVENT FOR LANDLORDS: Landlord and Property Letting Seminar

Copyright of Blog: David Lawrenson 2011 and 2012. Please link to us here or quote us.We actively pursue copyright infringements. The blog is updated once a week, usually on a Monday or Tuesday (or more frequently when “hot” news items come up.)

TWITTER PAGE For my thoughts on property, personal finance, plus other random things from sport, to 80s and 90s Indy Music, to tsunamis to musings on boardroom pay, plus my (usually) centre left “take” on politics please see our Twitter page.

LINK TO THIS BLOG OR TO OUR WEBSITE

Tags: , , , , , , , , , , , ,
Posted in Accredited Landlords, Buy to Let Mortgage Terms and Conditions, Housing Benefit, Landlord Accreditation, Landlord Regulation, Local Housing Allowance, Tenancy Agreement Length, Tenants Deposits | Comments Off

Private Landlords, Local Authorities and Buy to Let Mortgages

January 17th, 2012

We thought it would be useful to publish the October 2011 Newsletter right here on our blog. (Our latest, January 2012, Newsletter was published on 29th December and is available free now to those who sign up to receive our newsletter. Just send us an email if you would like to join the mailing list!)

Here is the Newsletter…..

“….. The continued upward trajectory of rents in most areas means the PRS is now attracting some serious press attention.

Each month, as soon as the LSL Rental Index comes out showing further big increases in private residential rents, the press frenzy starts once again.

Questions such as: “How can people afford to pay their rents, why are people not buying houses instead, whose fault is it, aren’t landlords driving out potential first time buyers by snapping up the little housing stock that does come on the market etc?” are hurled around the media.

And in response to the rising rents, there have been an increasing number of calls from some, for controls on rents (most unlikely to happen) and / or a review of the tax regime affecting landlords (still unlikely in the short term, but more chance of happening.)

Rising Rents

Rising rents are happening at the same time as the cuts to the way housing benefit is calculated are starting to bite.

One outcome of this is that that councils are finding it even harder to find landlords who are prepared to let to tenants who are on housing benefit (or Local Housing Allowance as it’s called when landlords are involved.)

Another side consequence of housing benefit cuts is a reduction in the amount of accommodation available from private landlords to house homeless or potentially homeless people. And so, with few private landlords coming forward, councils now have to spend increasing amounts of taxpayer cash on temporary accommodation to put potentially homeless people in B&B type properties.

Years ago we predicted this would happen unless strategies for the private rented sector at the town halls were radically re-shaped and revised. But alas, back then the opportunity was missed.

Wasteful Duplication at Some Town Halls

At our blog, we have often highlighted the sometimes wasteful duplication of products and services for landlords at local authority level, the lack of targeted marketing to recruit landlords by councils, the poor administration of housing benefit payments (a particular bug bear of landlords), the lack of understanding of the PRS by councils and some of their advisors and the obsession with well meaning accreditation type schemes which can cost a lot to promote but which too often lack any features that private landlords value.

Unfortunately, with many vested interests at some of the UK’s town halls – both in terms of sunken political capital and occasionally in terms of council and housing association jobs – we think change here will not come fast.

However, a parliamentary group of MPs and peers has now been set up to look at the private rented sector. We are talking to the MPs and making our views known.

Little Evidence that HB Cuts are Driving Down Rents

Many housing experts thought that the cuts to housing benefit rates could drive average rents in the private rented sector down. But this does not seem to be happening apart from for the most basic housing stock – the type of stock which never had much appeal to the non LHA tenant anyway.

And with rents in most areas rising, the key drivers remain the same as ever – a lack of sufficient housing supply and a rising population driven primarily by increases in net inward migration. (Last year alone net inward migration increased the population of the UK by 230,000, which is roughly the population of Derby.)  With further expansion of the EU on the agenda and the widespread use of the English language I don’t see that particular trend changing any time soon.

Job insecurity is also continuing to push potential house buyers – especially first time buyers – to rent instead of taking on the risks and high entry costs that come with home buying and servicing a mortgage. Some think the tight lending criteria from lenders are not helping first time buyers either (and this may be counteracting the relative affordability that’s now emerging.)

Buy to Let Mortgage Update

However, the fruits of our consultancy work advising buy to let mortgage lenders, will mean that the days of the “one mortgage fits all landlords” model be replaced in time, by a set of lending criteria that fully takes account of a landlord’s net asset and liabilities position, their level of experience and the risk inherent in different property types / locations as well as the intended target tenant market.

We may see more innovation in the buy to let mortgage product design too.

Landlords who know their business will benefit from this but landlords who sign up to the latest “get rich quick in property scheme with no money down” may find their choice of lenders becoming more ever reduced and their mortgages ever dearer.”

ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Private Rented Sector Consultancy and advice.

Services to Businesses and the Public Sector

We are advisors to a range of organisations including banks, building societies, local authorities, social housing providers, institutional investors and insurers. We help them develop and improve their services and products for private landlords.

We also write for property websites, speak at property events (send an email to david@LettingFocus.com to find out about our next event) and we are regularly quoted by the media.

Services for Private Landlords

We also help landlords and property investors by showing how to make money in the private rented sector using ways which are fair to tenants and which involve minimal risk to the investor.

AT OUR WEBSITE LETTINGFOCUS.COM:

HOME PAGE OF THIS BLOG click here: Blog

To read blog posts on related posts use the tags and categories at the bottom of each post (after the list of links), or over to the right of this page – where, you can click on “Select Categories” and use the pull down menu to read all the posts on any Category that interests you.

THE HOME PAGE OF OUR MAIN SITE

Four our main home page click here:  http://www.LettingFocus.com

For general info on our CONSULTING SERVICES and also to find a small sample of links to where our comments have been featured in the National Press please click: Consultancy and Seminars

For ONE TO ONE PRIVATE CONSULTANCY FOR PRIVATE LANDLORDS click here: Property Advice

TO READ CLIENT TESTIMONIALS – from both organisations and private landlords click here: Testimonials

BUY “SUCCESSFUL PROPERTY LETTING”

Our book is the highest selling property book in the UK. Click here to Find Out More and Buy it at Amazon. If you are from an organisation and would like to bulk buy at least 50 books please ask us for special rates.

TO JOIN OUR FREE NEWSLETTER and get our latest Newsletter which goes to over 3,000 people (as at December 2011) just send an email to david@LettingFocus.com

We do not spam or sell our mailing list to advertisers. Please put us on your “white list” to ensure you receive our emails.

OFFERS ON PRODUCTS FOR LANDLORDS and TO ADVERTISE YOUR PRODUCTS to LANDLORDS click here: Landlords Resources

PERUSE LAST TEN BLOGS BY GETTING THE RSS FEED: Click Here

NEXT SEMINAR EVENT FOR LANDLORDS: Landlord and Property Letting Seminar

Copyright of Blog: David Lawrenson 2011 and 2012. Please link to us here or quote us. We actively pursue copyright infringements. The blog is updated once a week, usually on a Monday or Tuesday (or more frequently when “hot” news items come up.)

TWITTER PAGE For my thoughts on property, personal finance, plus other random things from sport, to 80s and 90s Indy Music, to tsunamis to musings on why people cannot drive well if they are wearing a hat or a cap, plus my (usually) liberal “take” on politics please see our Twitter page.

LINK TO THIS BLOG OR TO OUR WEBSITE

Tags: , , ,
Posted in Old Newsletters | Comments Off

TV Programmes on the Private Rented Sector Seem to Be Setting Policy

January 9th, 2012

David Lawrenson, founder of LettingFocus.com says that TV programmes, which highlight the very worst tenants and landlords, seem to have too much influence on the policy debate on the private rented sector. It’s time for informed debate and sensible policy based on accurate research.

The facts are that if you know what you are doing, being a landlord is easy and it’s still  great fun to build a property portfolio at the same time as serving tenants and giving them a nice home that’s well looked after.

A personal touch to this week’s blog!

People often say to me, “Oh it must be hard being a landlord. I couldn’t do that – people calling you in the middle of the night all the time.”

I pondered this the other day as another really good tenant moved into one of my properties.

The previous tenant had left two days earlier. They been there three years, always paid the rent on time and had left the place in a very tidy order. Sure, there was a few things wrong – mainly a little bit of damp because they had not aired the place quite as well as they should have.

But this is easily sorted out and I’m not the sort of landlord to “sweat the small stuff” – my view is that life is just too short. So the old tenants got their deposit back in full on the day they left, no quibbles.

It took eight different evening appointments from placing my £99 advert on a specialist landlords letting portal (which uploads to Right Move, Zoopla et al) before I found my new tenant. (See our Landlords Offers pages below.) And in those eight appointments I met 14 different sets of tenants before I found someone I felt would pass my criteria and who liked the property.

No Void

As is usual for me, the period between tenancy ending and new one starting was just two days. (I don’t do empty properties!)

The new tenants are now happily settled in and love the place. They know that they can call my plumber, gas man or electrician if anything goes wrong. (I tell them there’s no point in calling me as I don’t know how to fix taps and neither do I want to learn how.)

The old tenants emailed me to ay they are also happy in their new place 9they bought a house).

Both old and new tenants got bottles of wine when they left / moved in. And I have got a higher rent. And because of local regeneration and transport improvements, the value of the property is now 10% higher than when I bought it.

I figured that everything from placing the ads on line, to doing the viewings and all the reference checks and the check-ins and check-outs and all the other admin (inventory arrangements, dealing with the tenancy deposit scheme and the rest of the paperwork that comes with being a landlord) took up about four man days in total.

Of course, I could have used an agent. That would have saved on some of the days I spent, but it would have still involved me doing at least 1 days work to check that the agent had done the tenant referencing and other stuff to my exacting standards.

All Is Right with the World

So, someone has got a nice new home, someone had a nice home for three years and has now moved on to buy their own place. All is right with the world.

Of course, like anything, letting properties in the private rented sector is only hard if people don’t know what they are doing.

So far, just over 30,000 copies of my book have been sold over the six and half years since it came out. I also know that about 28,000 people are in landlords associations.

But there are about 1.3 million landlords – a far bigger number, so that leaves a good 1.2 million men and women who don’t have my book or haven’t bothered to join a landlords association.

Presumably, they must be trusting to letting agents (whose standards vary from the brilliant to the downright awful) or they somehow muddle through on their own.

Those who muddle through or who use a duff letting agent will make a mess up of things for themselves and their tenants. These landlords will have to learn the hard way. They will either try again or quit!

Being a Landlord is Fun

These days my consulting work with organisations (and sometimes landlords) takes up about 90% of my time. It’s nice to help organisations as diverse as building societies and local authorities make a success of their products and services for the private rented sector and landlords. (Its fun and the amazing difference in culture between public and private sectors is an eternally fascinating feature of my work.)

But in the other 10% of my time, there is nothing else I’d rather be than a landlord – letting my properties and keeping my tenants happy. (But just in case, I turn my mobile off at night and sleep soundly!)

There are lots of landlords like me. The trouble is that a TV programme: “Good Landlord and Tenant Get on Well, Tenant Has a Lovely House and Gets Deposit Back in Full” does not make for exciting TV and won’t pull in viewers or advertisers.

This explains why most programmes about the PRS always focus on the worst landlords and tenants and explains why the landlord trade has such a rough image. It also explains why lots of people imagine I get calls in the middle of the night.

Clouding of Facts

It’s a shame that TV programmes are clouding the real facts, which have been revealed in every study of the private rented sector ever done: that most landlords and tenants get on fine and it is the tenant who usually moves out on their own accord, amicably at the end of the tenancy.

At the moment instead of good research like the 2008 Rugg Review driving policy in the private rented sector, we seem to have policy being driven by audience chasing TV programmes whose main aim is to show the very worst of the worst landlords and tenants.

ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Private Rented Sector Consultancy and advice.

Services to Businesses and the Public Sector

We are advisors to a range of organisations including banks, building societies, local authorities, social housing providers, institutional investors and insurers. We help them develop and improve their services and products for private landlords.

We also write for property websites, speak at property events (send an email to david@LettingFocus.com to find out about our next event) and we are regularly quoted by the media.

Services for Private Landlords

We also help landlords and property investors by showing how to make money in the private rented sector using ways which are fair to tenants and which involve minimal risk to the investor.

AT OUR WEBSITE LETTINGFOCUS.COM:

HOME PAGE OF THIS BLOG click here: Blog

To read blog posts on related posts use the tags and categories at the bottom of each post (after the list of links), or over to the right of this page = where, you can click on “Select Categories” and use the pull down menu to read all the posts on any Category that interests you.

THE HOME PAGE OF OUR MAIN SITE

Four our main home page click here:  http://www.LettingFocus.com

For general info on our CONSULTING SERVICES and also to find a small sample of links to where our comments have been featured in the National Press please click: Consultancy and Seminars

For ONE TO ONE PRIVATE CONSULTANCY FOR PRIVATE LANDLORDS click here: Property Advice

TO READ CLIENT TESTIMONIALS – from both organisations and private landlords click here: Testimonials

BUY “SUCCESSFUL PROPERTY LETTING”

Our book is the highest selling property book in the UK. Click here to Find Out More and Buy it at Amazon. If you are from an organisation and would like to bulk buy at least 50 books please ask us for special rates.

TO JOIN OUR FREE NEWSLETTER which goes to over 3,000 people (as at December 2011) just send an email to david@LettingFocus.com – We do not spam or sell our mailing list to advertisers. Please put us on your “white list” to ensure you receive our emails.

OFFERS ON PRODUCTS FOR LANDLORDS and TO ADVERTISE YOUR PRODUCTS to LANDLORDS click here: Landlords Resources

PERUSE LAST TEN BLOGS BY GETTING THE RSS FEED: Click Here

NEXT SEMINAR EVENT FOR LANDLORDS: Landlord and Property Letting Seminar

Copyright of Blog: David Lawrenson 2011 and 2012. Please link to us here or quote us. We actively pursue copyright infringements. The blog is updated once a week, usually on a Monday or Tuesday (or more frequently when “hot” news items come up.)

TWITTER PAGE For my thoughts on property, personal finance, plus other random things from sport, to 80s and 90s Indy Music, to tsunamis to musings on why people with Ipods walk in front of cars and my (usually) liberal “take” on politics please see our Twitter page.

LINK TO THIS BLOG OR TO OUR WEBSITE

Posted in Uncategorized | Comments Off

LettingFocus Property Seminar An Opportunity to Learn the Facts About Being a Landlord and Buy to Let

December 30th, 2011

We are pleased to annouce that on Tues. 20th March, we will be running a one off networking and seminar event for landlords.

Due to the pressure of our work with organisations, we now only run one of these a year now – and always in London.

Here is the link for more info and details on how to book: Landlord and Property Letting Seminar

As it’s Christmas and New Year Week, we will not be writing a blog this week, but readers who are on our newsletter mailing list should check their inboxes for our latest newsletter, which was sent 29th December at 330pm.

If you are not on our mailing list, it’s time to get on it.

Join it by emailing me at: david@LettingFocus.com

Finally, we would like to wish all our readers a very happy New Year.

Tags: ,
Posted in Landlord Seminar Meeting, Property Clubs | Comments Off

London Living Rent, Landlord Accreditation and Ken and Boris

December 15th, 2011

David Lawrenson of LettingFocus worries about Ken Livingston’s idea of rent controls and says that that accreditation and registration schemes for landlords are not needed because the vast majority of landlord and tenants enjoy good relations and the minority of rogue landlords will never register anyway.

Oh dear, oh dear, I spend a nice day at a CIH Conference telling many good people from the local authorities how they could make a better job of their relationships with the private rented sector and when I come back, I find that at another conference taking place on the same day, Ken Livingston and Boris Johnson are doing their best to come up with schemes for the private rented sector that will be hard to make work and will likely fail in their objectives.

Ken Livingston

Ken’s idea is for some kind of rent control.

Mmm. This has been tried in the past, and of course, gave us Rachman and a whole bunch of equally nasty landlords back in the 1960s and 70s.

For the benefit of younger readers, what happened was that horrible landlords like Peter Rachman just ignored rent controls anyway. And if a brave and foolish person ever stood up for their rights, they would find their lives rapidly took a turn for the worse when Rachman’s goons came to pay a visit.

In the 1960s and 70s the majority of fair minded landlords who obeyed the rent controls (and didn’t ask for “side payments”) found that they could not make any money from letting property, so their properties often fell into disrepair and gradually they all sold up – which is why by 1988, the private rented sector in the UK was so tiny – with only about 8% of the total housing stock. (In 1945 it was about 50% of the stock).

This tiny private rented sector was a problem for the economy – it meant that without a flexible housing alternative, people couldn’t move easily for work, which is why the government of the day brought in the new assured shorthold tenancies, to create a flexible housing tenure.

New York not as Great as Ken Makes Out

Ken Livingston referred to the success of New York’s rent control. I don’t know too much about New York’s experience apart from the fact that I have a friend who lived there 3 years ago and who said that side payments were the norm (to avoid the controls) and it personally helped him get a property when he offered a “contribution” to his landlord’s favoured religious charity. (In his case it was useful to have been of the same faith as the landlord or else he would not have even got a viewing.)

People familiar with Greece and the old communist Eastern Europe would be more than familiar with this kind of side payment left in a brown envelope.

It’s not clear how would Ken stop this kind of cheating of a rent control system and how would it be enforced anyway.

I’ve always rather liked Ken and have tended to vote for him, but I think he needs a history lesson here. Or maybe just spend some time in Greece.

Not for Profit Letting Agency

Ken’s other idea was for a Not for Profit Letting Agency.

We have commented here at this blog on the issue of local authorities setting up Local Lettings Agencies and the like on numerous occasions. Please see the links under “Categories” and the “Tags”.

But just two observations for now: Most private letting agents work at weekends and evenings. We would just hope that any such letting agency is not staffed by local government officers, as when I call my council it’s pretty much dead after 5pm and at weekends!

I also found his comments rather generalistic. Most letting agencies are decent and the people who work in them are fair and whilst I agree that more regulation of agents is needed, to appear to paint them all as ogres was going too far.

Boris’s Brainwaves

Boris’s ideas are rather simpler.

He too is in favour of accrediting all private landlords.

This idea has a little merit but accreditation has to be light touch (as Rugg proposed) and low cost too – with all landlords accepted. And accreditation must be accompanied by a very tough approach on the tiny number of rogue landlords who deliberately and consistently treat tenants in an awful way, housing them in appalling properties which break the law.

What we must avoid do at all costs is the kind of system of landlord registration that they have in Scotland. This scheme costs a huge amount of money to set up and run, is clunky, inefficient and few rogue landlords have ever been bought to book. And the majority of good Scottish landlords see it as a tax on them (and hence their tenants) with little benefit for their tenants either.

In London, we fear the same thing could happen – the same bureaucracy, the same waste, the same failure to root out the rogue bad apples in the landlord universe.

I have commented at previous blog posts about the appalling Sheds with Beds situation in Southall where a national newspaper (not the council) found that rogue landlords were routinely abusing mostly migrant (often illegal migrant) tenants by housing them in appalling “sheds.” These “tenants” did not know their rights or cannot enforce them.

The Problem with Accreditation

Would accreditation help these poor souls in the sheds in Southall and elsewhere?

No, somehow, we don’t think their landlords will be in the front of the queue to be accredited. And their (often illegal) immigrant tenants will hardly be reporting them either!

All the same, Boris has ploughed on. His big idea is to make membership of accreditation schemes a condition for a landlord to be paid Housing Benefit direct.

The London Landlords Accreditation Scheme is one such scheme with laudable objectives and which is much loved by the great and the good in London’s councils. After all, it was invented by councils, so it tends to get a good press at County Hall.

But we think it is currently a tad too hard to get accredited on it, which is why LLAS accredited landlords are still small in number – (fewer UK landlords are accredited than have my book) – even though the scheme has been around for years.

Getting Paid Housing Benefit/ LHA Direct

In relation to Boris’s idea to link membership of it to receiving HB payments direct, we find ourselves baffled, because at the moment private landlords are hardly jumping over barriers to accept “benefit tenants” irrespective of whether they are paid LHA direct or not.

Making them join LLAS or some other accredited scheme as a pre-condition is not going to assist this situation.

Who Cares About Accreditation?

Boris and Ken could do well to pay heed to my survey of the 2,000 landlords on my mailing list. Not a single one said they had ever been asked by a tenant if they were accredited.

They should also re-read the Rugg Review – which clearly said that the vast majority of landlords and tenants in the PRS enjoy very good relationships – and try to avoid getting distracted by TV programmes which naturally highlight the very worst landlords and tenants.

If most landlords and tenants get along fine and as all rogues would ignore ignore a landlord register, we would ask – where is the need for it.

I’d hoped for a better understanding from both Boris and Ken of two basic truths:

One. That private rents (like house prices) are on the up because of a lack of housing and a rising population (which is not going to stop rising as long as the UK remains in the EU).

Two. That what’s really needed is for local authorities to start using their existing powers to deal with rogue landlords harshly. If accreditation can be shown to assist the driving out of the rogues then great, but it’s hard to see how it could actually do this.

Time for the Mayor of London hopefuls to think again, we think.

ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Private Rented Sector Consultancy and advice.

Services to Businesses and the Public Sector

We are advisors to a range of organisations including banks, building societies, local authorities, social housing providers, institutional investors and insurers. We help them develop and improve their services and products for private landlords.

We also write for property websites, speak at property events (send an email to david@LettingFocus.com to find out about our next event) and we are regularly quoted by the media.

Services for Private Landlords

We also help landlords and property investors by showing how to make money in the private rented sector using ways which are fair to tenants and which involve minimal risk to the investor.

AT OUR WEBSITE LETTINGFOCUS.COM:

HOME PAGE OF THIS BLOG click here: Blog

To read blog posts on related posts use the tags and categories at the bottom of each post (after the list of links), or over to the right of this page = where, you can click on “Select Categories” and use the pull down menu to read all the posts on any Category that interests you.

THE HOME PAGE OF OUR MAIN SITE

Four our main home page click here:  http://www.LettingFocus.com

For general info on our CONSULTING SERVICES and also to find a small sample of links to where our comments have been featured in the National Press please click: Consultancy and Seminars

For ONE TO ONE PRIVATE CONSULTANCY FOR PRIVATE LANDLORDS click here: Property Advice

TO READ CLIENT TESTIMONIALS – from both organisations and private landlords click here: Testimonials

BUY “SUCCESSFUL PROPERTY LETTING”

Our book is the highest selling property book in the UK. Click here to Find Out More and Buy it at Amazon. If you are from an organisation and would like to bulk buy at least 50 books please ask us for special rates.

TO JOIN OUR FREE NEWSLETTER which goes to over 3,000 people (as at December 2011) just send an email to david@LettingFocus.com – We do not spam or sell our mailing list to advertisers. Please put us on your “white list” to ensure you receive our emails.

OFFERS ON PRODUCTS FOR LANDLORDS and TO ADVERTISE YOUR PRODUCTS to LANDLORDS click here: Landlords Resources

GET THE RSS FEED FOR THIS BLOG: Click Here

NEXT SEMINAR EVENT FOR LANDLORDS: Landlord and Property Letting Seminar

Copyright of Blog: David Lawrenson 2011 and 2012. Please link to us here or quote us. We actively pursue copyright infringements. The blog is updated once a week, usually on a Monday or Tuesday (or more frequently when “hot” news items come up.)

TWITTER PAGE For my thoughts on property, personal finance, plus other random things from sport, to 80s and 90s Indy Music, to tsunamis to musings on why people with Ipods walk in front of cars and my (usually) liberal “take” on politics please see our Twitter page.

LINK TO THIS BLOG OR TO OUR WEBSITE

Tags: , , , , , , , , , , , , , , , , , ,
Posted in Accredited Landlords, Boris Johnson, Generation Rent, Housing Benefit, Housing Strategy and the PRS, Ken Livingstone Rent Cap, Landlord Accreditation, Landlord Register and Licensing, Landlord Regulation, Landlords Register, Letting Agency Regulation, Local Housing Allowance, London Living Rent, Not for Profit Letting Agency, Private Rented Sector Regulation, Register of Landlords, Rising Rents | Comments Off

Scotland Landlord Registration Scheme Review Makes Grim Reading

December 5th, 2011

A new report on the Scotland Landlords Registration Scheme confirms what we have long suggested – that the scheme has failed on many of its objectives says David Lawrenson of LettingFocus.

Many people, in government and elsewhere, would like to see the private rented sector “regulated” more.

Of course they often have different ideas about exactly what sort of regulation they have in mind.

The now much forgotten, but generally brilliant, Rugg Review recommended that private landlords should be regulated via a very low cost scheme and broadly we welcomed the recommendation and the way Julie Rugg envisaged it working. (Most landlords associations were not so convinced, but as an independent expert I always take the line of “what’s best for society / the taxpayer” and I found myself agreeing with Rugg.)

However, one regulation scheme that I have been a constant critic of is the Scottish Landlords Registration Scheme.

Scotland’s Landlord Registration Scheme

In Scotland, just about all private landlords have to pay to be registered. The origins of Landlord Registration in Scotland are contained within the Antisocial Behaviour etc. (Scotland) Act 2004, which required almost all private landlords to apply for registration with their local authority.

So, what were the objectives of the scheme?

The Scottish Government Leaflet ‘Landlord Registration’ (2006) stated that:

‘All private landlords must register with their local authority. This gives tenants assurance that landlords are fit and proper people to let property, and gives the local authority a full picture of the private rented sector in their area. The requirement (to register) will help local authorities to remove disreputable landlords from the market, protect tenants, and protect communities from the impact of antisocial behaviour and mismanaged property.’

My Past Criticisms of the Scheme

Over the years, my main criticisms of it have been that

1. That it has cost far too much money

2.  It singularly achieved very little in bringing rogue landlords “to book”

3.  Landlords in Scotland tend to see it as a bureaucratic hassle (especially as they need to register in each local authority where you have a property) and that it acts as a tax on good landlords

4. There is little evidence that it has raised standards in the private rented sector in Scotland

Now the Scottish Government has reported the results of DTZ’s review of the Landlord Registration Scheme. We think this review makes pretty grim reading in terms of effectiveness in meeting objectives and budgetary accountability. In other words, it confirms most of the things we have been saying.

These are some quotes from the paper:

Extract of DTZ’s Findings for the Scottish Government

1. At this stage, it continues to be difficult to quantify exactly how many landlords have not yet registered and whether they do not register because they are unaware of the requirement to do so or because they ignore this requirement.

2. The research findings reveal that landlords are now more likely to have access to information and advice provided by local authority Landlord Registration teams. However, there is no guarantee that management of property among private sector landlords reaches a specified standard.

3. Many local authorities do not have a performance and monitoring system in place for Landlord Registration.

4. While feedback from the survey of local authorities, case studies and stakeholder consultation indicates that the IT system has improved, there continue to be many frustrations with the system and suggestions for improvement.

5. Problems with the user friendliness of the website are evident and a clear picture of the problems which landlords have in using the system is required before any changes are made.

6. The problems associated with the landlord website (such as user difficulties, labeling, joint applications and reporting tools) and associated administrative systems add to the administrative burden within local authorities.

7. Within the central administration of the scheme, there is scope for improvements in relation to the administrative process associated with fee payment, reporting and governance.

Fees and Admin

8. The fee payment system generates delays in payment processing and failed payments are resource intensive and take a long time to rectify. If timescales are improved, local authorities will be able to more effectively plan resources and reconcile the data with their records, which should be standard practice.

9. In the main, fees do not cover local authority costs, many being supplemented from other budgets. This lack of income means that resources are focused on the administration of the scheme rather than investigation or enforcement activity.

10. Many local authorities do not have a performance and monitoring system in place for Landlord Registration.

11. There is evidence that the sector is now more aware of its obligations when acting as a private sector landlord and there have been some improvements in landlord behaviour. However, the evidence collected suggests that Landlord Registration has not removed the ‘worst’ landlords from the sector.”

12. At present, there is no clear understanding of the overall administrative costs of Landlord Registration and this is not taken into account in any of the fee structures. Local authorities need to improve budgetary practices, so that they are aware of the income and expenditure associated with Landlord Registration.

13. There is little or no appetite for the administration of Landlord Registration (those functions currently undertaken centrally) to be carried out locally. Indeed, it may be more complex and resource intensive to deliver the system in this way. An alternative, which merits consideration, is the external administration of the scheme by an independent party or regulatory body.

Not pretty reading is it?

Benefits of the Scheme

OK, there have been some improvements in Scotland but reading the DTZ report, they seem few and far between and remain unquantified.

In conclusion, we think the costs of this scheme far outweigh the benefits achieved.

What’s needed for the PRS is sensible regulation, fairly enforced with real teeth to focus on and drive out the rogue landlords – the sort of operator that most in the PRS do not want to have in the sector. The worst indictment is that the costly Scottish scheme has failed to do this and we suspect rogue landlords continue to operate with impunity.

I fear that some of the “Regulate the PRS” lobby would like to bring in a similar system in England and Wales. I hope they will now stop and learn from the Scottish experience and design better and more efficient ways to control the sector.

ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Private Rented Sector Consultancy and advice.

Services to Businesses and the Public Sector

We are advisors to a range of organisations including banks, building societies, local authorities, social housing providers, institutional investors and insurers. We help them develop and improve their services and products for private landlords.

We also write for property websites, speak at property events (send an email to david@LettingFocus.com to find out about our next event) and we are regularly quoted by the media.

Services for Private Landlords

We also help landlords and property investors by showing how to make money in the private rented sector using ways which are fair to tenants and which involve minimal risk to the investor.

AT OUR WEBSITE LETTINGFOCUS.COM:

HOME PAGE OF THIS BLOG click here: Blog

To read blog posts on related posts use the tags and categories at the bottom of each post (after the list of links), or over to the right of this page = where, you can click on “Select Categories” and use the pull down menu to read all the posts on any Category that interests you.

THE HOME PAGE OF OUR MAIN SITE

Four our main home page click here:  http://www.LettingFocus.com

For general info on our CONSULTING SERVICES and also to find a small sample of links to where our comments have been featured in the National Press please click: Consultancy and Seminars

For ONE TO ONE PRIVATE CONSULTANCY FOR PRIVATE LANDLORDS click here: Property Advice

TO READ CLIENT TESTIMONIALS – from both organisations and private landlords click here: Testimonials

BUY “SUCCESSFUL PROPERTY LETTING”

Our book is the highest selling property book in the UK.

Click here to Find Out More and Buy it at Amazon. If you are from an organisation and would like to bulk buy at least 50 books please ask us for special rates.

TO JOIN OUR FREE NEWSLETTER which goes to over 3,000 people (as at December 2011) just send an email to david@LettingFocus.com – We do not spam or sell our mailing list to advertisers. Please put us on your “white list” to ensure you receive our emails.

OFFERS ON PRODUCTS FOR LANDLORDS and TO ADVERTISE YOUR PRODUCTS to LANDLORDS click here: Landlords Resources

GET THE RSS FEED FOR THIS BLOG: Click Here

Copyright of Blog: David Lawrenson 2011 and 2012. Please link to us here or quote us. We actively pursue copyright infringements. The blog is updated once a week, usually on a Monday or Tuesday (or more frequently when “hot” news items come up.)

TWITTER PAGE For my thoughts on property, personal finance, plus other random things from sport, to 80s and 90s Indy Music, to tsunamis to musings on why people with Ipods walk in front of cars and my (usually) liberal “take” on politics please see our Twitter page.

LINK TO THIS BLOG OR TO OUR WEBSITE

Tags: , , , , , , , , , , ,
Posted in Accredited Landlords, Housing Strategy and the PRS, Landlord Accreditation, Landlord Register and Licensing, Landlord Regulation, Landlords Register, Private Rented Sector Regulation, Register of Landlords, Scotland Landlords Registration | Comments Off

Strategy for Housing and the Private Rented Sector Govt Paper is a Bit of a Let Down

November 30th, 2011

So how is the Private Rented Sector (PRS) affected by the Government’s recently published new Strategy for Housing?

Well, first of all, there will be an independent review of barriers to investment in the PRS. Doubtless this will be looking closely at new build to let models, where homes are built specifically for the private rental market, with funding coming from major investors.

Also, there will be financial incentives for investment in private rent, in which major investors such as pension funds would pay just one percent in stamp duty, plus the ongoing reform of real estate investment trusts.

Our views on this?

Well it’s good that housing is back at the front of debate (but could it be anywhere else given the dire level of new build and pressures caused by the relentless rise in the UK population?)

Groundhog Day Again

But if you are feeling a touch of “Groundhog Day” again, don’t worry you really have actually heard most of this before because the cutting of stamp duty for blocks of housing was first announced back in the spring, as were the changes to REITs

We have reported for a long time that institutional investment, which currently makes up just one percent of the sector, has wanted to get into the PRS for some time (or should I say, their advisers would like them to.)

But so far, most of the big money has sat on the sidelines, because whilst small scale independent landlords have done very well and have grown the sector, thus far it’s not been sufficiently attractive for the big fund managers.

Sure, there has been lots of talk about “fund raisings” and some schemes have actually got off the ground, but there has not been a whole lot – yet.

There are many reasons for this reticence to invest and they have all been examined very well and in much depth already. As I said on the Guardian Housing Network blog – does the government really need to commission yet another review of the PRS (which was another announcement in the Housing Strategy) to tell us what lots of highly eminent consultants have already told us.

I think not.

Build to Let – Keep Waiting

At the Guardian Housing Network blog, after many contributors and cheerleaders for Build to Let had said their piece, I commented as follows:

“Re the Build to Let issues, yes institutional money does offer some economies of scale in the PRS, but as was pointed out (in the now sadly much ignored Rugg Review), small scale private landlords deliver efficiently with lots of uncharged-able “sweat capital” which big investors have to pay out as wages. Taking this into account, we are not sure the institutional advantages (of economies of scale) are as great as some here have claimed, which is why perhaps investment so far from this source has been so sluggish.”

I stick to that view but would add that in the course of the next few years I can only see the government shelling out more tax breaks for the City to invest in the PRS, (which will finally bring them in and which be good for aggregate housing supply but not so great for small landlords who will ultimately face extra competition for tenants.)

Other Stuff: More Been There Done That

Also, in the Housing Strategy paper, the Government pledged to work with local authorities to “tackle the worst properties” and called for new fact sheets to be provided to help private landlords “understand the basic requirements of managing a property for rent.”

Well, the local authorities already have a lot of power to deal with the worst of the rogue private landlords (though recent events in Ealing – see the “Sheds for Beds” story reported elsewhere at out blogs) does suggest they could be beefed up still more.

As to “fact sheets for private landlords”, there is much that is already on line – a lot of it at the government’s own websites. So I don’t really see much need for this.

And with over 30,000 copies of our book sold to date, I could always interest the government in a bulk discounted deal if they’d like to give it free to the 1 million odd landlords who don’t as yet have a copy!

Overall Impressions

So what is our overall impression of the bits of the Housing Strategy that impact the PRS?

In summary, it feels as though the government asked a junior at the CLG to chuck something in about the PRS for completeness.

OK, it’s good that the PRS gets a good mention but there’s not much new here and so I cannot give it more than 6 out of 10 – and I feel that is being pretty generous.

Of far more interest is the infrastructure plans – new road and rail/ tube links. Smart house buyers know that these will drive up rental and capital values and they will be poring over the new routes.

ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Private Rented Sector Consultancy and advice.

Services to Businesses and the Public Sector

We are consultants to a range of organisations including banks, building societies, local authorities, social housing providers, institutional investors and insurers. We help them develop and improve their services and products for private landlords.

We also write for property websites, speak at lots of property events (send an email to david@LettingFocus.com to find out about our next event) and we are regularly quoted by the media.

Services for Private Landlords

We also help landlords and property investors by showing how to make money in the private rented sector using ways which are fair to tenants and which involve minimal risk to the investor.

AT OUR WEBSITE LETTINGFOCUS.COM:

HOME PAGE OF THIS BLOG click here: Blog

To read blog posts on related posts use the tags and categories at the bottom of each post (after the list of links), or over to the right of this page = where, you can click on “Select Categories” and use the pull down menu to read all the posts on any Category that interests you.

THE HOME PAGE OF OUR MAIN SITE

Click here:  http://www.LettingFocus.com

For general info on our CONSULTING SERVICES and also to find a small sample of links to where our comments have been featured in the National Press please click: Consultancy and Seminars

For ONE TO ONE PRIVATE CONSULTANCY FOR PRIVATE LANDLORDS click here: Property Advice

TO READ CLIENT TESTIMONIALS – from both organisations and private landlords click here: Testimonials

BUY “SUCCESSFUL PROPERTY LETTING”

Our book is the highest selling property book in the UK. Click here to Find Out More and Buy it at Amazon. If you are from an organisation and would like to bulk buy at least 50 books please ask us for special rates.

TO JOIN OUR FREE NEWSLETTER which goes to 3,000 people just send an email to david@LettingFocus.com – We do not spam or sell our mailing list to advertisers. Please put us on your “white list” to ensure you receive our emails.

OFFERS ON PRODUCTS FOR LANDLORDS and TO ADVERTISE YOUR PRODUCTS to LANDLORDS: Landlords Resources

GET THE RSS FEED FOR THIS BLOG: Click Here

Copyright of Blog: David Lawrenson 2011. Please link to us here or quote us. We actively pursue copyright infringements. The blog is updated once a week, usually on a Monday or Tuesday (or more frequently when “hot” news items come up.)

TWITTER PAGE For my thoughts on property, personal finance, plus other random things from sport, to 80s and 90s Indy Music, to tsunamis and my liberal take on politics please see our Twitter page.

LINK TO THIS BLOG OR TO OUR WEBSITE

Tags: , , , ,
Posted in Build to Let, Housing Strategy, Housing Strategy and the PRS, Institutional Investment in the Private Rented Sector, PRSI, Private Rented Sector Initiative | Comments Off

How Freeholders and Managing Agents Can Abuse Leaseholders Legally

November 22nd, 2011

In this piece LettingFocus.com looks at how freeholders and their managing agents can abuse leaseholders and LettingFocus founder, David Lawrenson,  explains why he tends to avoid leasehold properties.

I contributed to an article for “The Times” the other week, which looked at the various ways leaseholders can get “turned over” by unscrupulous freeholders and their managing agents.

Here, based on what landlords and other home owners have told me, is my personal list of the six top abuses carried out by rogue freeholders and their agents:

1. Making leaseholders pay the freeholders’ own legal costs used in fighting other leaseholders or even for themselves in court! Yes, they can really do this, providing it’s allowed for by the terms of the lease.

2. Overcharging for arranging insurance or for replying to routine administration enquiries from conveyancers or mortgage lenders. Home owners need to be particularly careful to check what’s covered by the insurance policy and what the level of excess (deductible) is. I have seen one policy which had a £5,000 excess for any claim – which makes it about as much use as a proverbial chocolate teapot for most claims.

3. Not repairing a building properly on purpose in order to ensure more expensive repairs result later. See also “4″ below.

4. Doing unnecessary work on the building to profit from extra management fees. The discovery, in the 1970s, of the dangers posed by asbestos was a particular godsend for bad freeholders – allowing them to arrange for the carrying out of “urgent,” unnecessary and / or over-priced asbestos removal from a block.

5. Abusing or “ringing” tendering processes for repair work with builders – i.e. backhanders for inflated costs for works. For most works of any size, a freeholder will need three builders to quote for work, so a crooked freeholder with a number of properties could share the work out between each of three friendly builders and ensure each job costs more than is necessary. Of course, that assumes the three builders are in any sense “real” rather than being sham legal company constructs existing solely for the purpose of quoting for inflated work.

6. Overcharging landlords for “consent to let.” In my experience many leases do not require a leasehold-landlord to notify the freeholder, let alone to pay costs for this. That does not prevent lots of them from trying it on, though and, with more property than ever being let, this is a popular money spinner for the abusive freeholder. I have a freeholder who tries this on every few years and when I point out to them their error, they claim it was an honest mistake. Clearly it’s a mistake they are not learning from. This freeholder is big in the capital and now has a considerable “history” on line as regards this form of abuse.

Why I Avoid Leasehold

Personally, as an investor, I only buy leasehold if the block is low rise and if there is already a management company owned and run by active leaseholders (who ideally also live in the block or development) and who have the power to hire and fire the management company.

If the above requirements are not in place but the block is low rise with no lifts and the freeholder is a local authority, I might consider buying a leasehold property but only if more than 50% was now in owner occupation (i.e. occupants had previously exercised right to buy.)

Other reasons I tend to steer clear of leasehold properties are:

1. They are more time consuming than freehold with regards to what one needs to do to enforce one’s rights and to stand up to abusive freeholders and their agents.

2. I don’t like not being fully in charge of my investments.

3. Noise and other antisocial issues are more common with flats and soak up too much of my time.

Lots of freeholders and their agents are good. To avoid ending up with a “freeholder from hell”, ask other leaseholders before you buy and check what it says about the agent and the freeholder on line.

ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Private Rented Sector Consultancy and advice.

Services to Businesses and the Public Sector

We are consultants to a range of organisations including banks, building societies, local authorities, social housing providers, institutional investors and insurers. We help them develop and improve their services and products for private landlords.

We also write for property websites, speak at lots of property events (send an email to david@LettingFocus.com to find out about our next event) and we are regularly quoted by the media.

Services for Private Landlords

We also help landlords and property investors by showing how to make money in the private rented sector using ways which are fair to tenants and which involve minimal risk to the investor.

AT OUR WEBSITE LETTINGFOCUS.COM:

HOME PAGE OF THIS BLOG click here: Blog

To read blog posts on related posts use the tags and categories at the bottom of each post (after the list of links), or over to the right of this page = where, you can click on “Select Categories” and use the pull down menu to read all the posts on any Category that interests you.

THE HOME PAGE OF OUR MAIN SITE

Click here:  http://www.LettingFocus.com

For general info on our CONSULTING SERVICES and also to find a small sample of links to where our comments have been featured in the National Press please click: Consultancy and Seminars

For ONE TO ONE PRIVATE CONSULTANCY FOR PRIVATE LANDLORDS click here: Property Advice

TO READ CLIENT TESTIMONIALS – from both organisations and private landlords click here: Testimonials

BUY “SUCCESSFUL PROPERTY LETTING”

Our book is the highest selling property book in the UK. Click here to Find Out More and Buy it at Amazon. If you are from an organisation and would like to bulk buy at least 50 books please ask us for special rates.

TO JOIN OUR FREE NEWSLETTER which goes to 3,000 people just send an email to david@LettingFocus.com – We do not spam or sell our mailing list to advertisers. Please put us on your “white list” to ensure you receive our emails.

OFFERS ON PRODUCTS FOR LANDLORDS and TO ADVERTISE YOUR PRODUCTS to LANDLORDS: Landlords Resources

GET THE RSS FEED FOR THIS BLOG: Click Here

Copyright of Blog: David Lawrenson 2011. Please link to us here or quote us. We actively pursue copyright infringements. The blog is updated once a week, usually on a Monday or Tuesday (or more frequently when “hot” news items come up.)

TWITTER PAGE For my thoughts on property, personal finance, plus other random things from sport, to 80s and 90s Indy Music, to tsunamis and my liberal take on politics please see our Twitter page.

LINK TO THIS BLOG OR TO OUR WEBSITE

Tags: , , , ,
Posted in Consent to Let, Consent to Let Fees, Consent to Let Scam, Freehold Scams, Freeholder Cons | Comments Off

LSL Buy to Let Index and Its Nice to be Proved Right In the End

November 14th, 2011

The LSL Buy to Let Index comes out tomorrow and I fully expect it will show rents are up again.

Good tenants can, of course, do more to help themselves get the property they want, if only more of them “cottoned on” to what private landlords are looking for – as we explained in this recent blog post: A Guide for Tenants

Meanwhile, on the subject of the huge growth of the private rented sector, it’s nice to be proved right. This is what a leading expert was saying about it in The Telegraph earlier this week….

http://www.telegraph.co.uk/finance/economics/houseprices/8888429/Britain-to-become-nation-of-renters.html

…..And this was what I was saying all the way back in September 2006:

http://www.mortgagestrategy.co.uk/brokers-ridicule-buy-to-let-predictions/128457.article

Its a shame that back then, my predictions were much derided by some people as the article from over 5 years ago shows.

Its nice to be proved right in the end.

For more see us at www.LettingFocus.com

MORE ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Private Rented Sector Consultancy and advice.

Services to Businesses and the Public Sector

We are consultants to a range of organisations including banks, building societies, local authorities, social housing providers, institutional investors and insurers. We help them develop and improve their services and products for private landlords.

We also write for property websites, speak at lots of property events (send an email to david@LettingFocus.com to find out about our next event) and we are regularly quoted by the media.

Services for Private Landlords

We also help landlords and property investors by showing how to make money in the private rented sector using ways which are fair to tenants and which involve minimal risk to the investor.

AT OUR WEBSITE LETTINGFOCUS.COM:

HOME PAGE OF THIS BLOG click here: Blog

To read blog posts on related posts use the tags and categories at the bottom of each post (after the list of links), or over to the right of this page = where, you can click on “Select Categories” and use the pull down menu to read all the posts on any Category that interests you.

THE HOME PAGE OF OUR MAIN SITE

Click here:  http://www.LettingFocus.com

For general info on our CONSULTING SERVICES and also to find a small sample of links to where our comments have been featured in the National Press please click: Consultancy and Seminars

For ONE TO ONE PRIVATE CONSULTANCY FOR PRIVATE LANDLORDS click here: Property Advice

TO READ CLIENT TESTIMONIALS – from both organisations and private landlords click here: Testimonials

BUY “SUCCESSFUL PROPERTY LETTING”

Our book is the highest selling property book in the UK. Click here to Find Out More and Buy it at Amazon. If you are from an organisation and would like to bulk buy at least 50 books please ask us for special rates.

TO JOIN OUR FREE NEWSLETTER which goes to 3,000 people just send an email to david@LettingFocus.com – We do not spam or sell our mailing list to advertisers. Please put us on your “white list” to ensure you receive our emails.

OFFERS ON PRODUCTS FOR LANDLORDS and TO ADVERTISE YOUR PRODUCTS to LANDLORDS: Landlords Resources

GET THE RSS FEED FOR THIS BLOG: Click Here

Copyright of Blog: David Lawrenson 2011. Please link to us here or quote us. We actively pursue copyright infringements. The blog is updated once a week, usually on a Monday or Tuesday (or more frequently when “hot” news items come up.)

TWITTER PAGE For my thoughts on property, personal finance, plus other random things from sport, to 80s and 90s Indy Music, to tsunamis and my liberal take on politics please see our Twitter page.

LINK TO THIS BLOG OR TO OUR WEBSITE

Tags:
Posted in LSL Buy to Let Index, Uncategorized | Comments Off

« Older Entries