Winter is Coming!
Hi from all at Town and Country Property Services!
With winter fast approaching I wanted to write and offer some of my thoughts on how you can maximize rent levels, reduce void periods and unwanted maintenance expenditure on your property/properties.
I have below a ‘Top Tips’ section gleaned from nearly 20 years’ experience in the local lettings market and I hope you find some of the information helpful – I am aware that much of the information will be common sense to many of you who have more experience than I in renting properties!
I will also update on some potential legislation changes and general market conditions.
I wanted to thank you from all at Town and Country Property Services for your loyalty over the past 12 months.
We are a professional letting and managing agents but we are also human. Whilst I do not wish to dwell on the death of Andrew it would be remiss of me not to highlight that it was a year ago in September that he passed. We think that Andrew would be incredibly proud of how we have driven the business forward under difficult circumstances.
On a really positive note Susan Boyle (Sue if you speak to her on the phone!) has been actively generating funds for The Martlets Hospice in the past year in memory of Andrew.
We can proudly announce that we have raised over £8500 for them in memory of Andrew and we even have a new office dog! If you are passing, pop in and meet the pooch. Stay Lily Pup!
Our Lily Pup – We raised over £8500 for the Martlets Hospice in memory of Andrew.
TOP TIPS FOR LANDLORDS
The key to a good return on your investment is to ensure long term tenancies with good tenants on market rent levels – the holy grail!
To do this here are our top tips:
- Keep properties neutral and modern.
- Kitchens and bathrooms not only sell properties they rent them too. Many a positive viewing has turned negative when applicants have walked into a kitchen or bathroom that are dated. We are not suggesting upgrades when they are not necessary but we have had to have forthright discussions with past clients that a 20 year old kitchen, which had seen better days, should be updated!
- Be realistic with rents. It is our job to advise you of the rent level but rents can fluctuate depending on current market conditions. A percentage of something is better than nothing of nothing.
- Be flexible on some of the types of tenants. Is it worth considering someone with a child for example even if you really prefer no children? Or a pet? Again, its about minimizing void periods which, now Council tax is payable on the first day of the void period, are the biggest thing to avoid.
- Cheapest option is not always the best. Sometimes a repair to an appliance that is old may give a few months of extra life but it is worth considering replacement depending on age. Our contractors give honest advice which we always pass on.
Ban on letting fees
There is a ban on charging tenants lettings fees on the horizon and potentially coming into effect next year – there is no set timescale and I think the current UK government has quite a lot on its plate currently!
This will effectively mean that we cannot charge the tenant to reference them as we do now and would have to pass some of the costs on to you, our clients.
I have very strong feelings about this and have been lobbying my MP as frankly it is a political vote chasing stunt and will likely result in increased costs for tenants and not reductions. In Scotland where they introduced this ban rents increased.
We are keeping a very close eye on the discussions in Parliament and will advise what steps we have to take when more information and detail comes to light.
Brighton and Hove City Council have received approval from the Secretary of State for Housing, Communities and Local Government for a selective licensing scheme for all private rented property in 12 wards/areas of the City which will be introduced from 4 February 2019.
It will apply to ALL private rented properties in these areas and they will require a license detailing the below:
- Any storeys
- One person or more
- One household or more
- How many occupants can live at the property
The cost of the licence is a standard fee of £460 (price quoted by Brighton and Hove City Council at the time of issuing this newsletter) and the licence will last for a maximum of 5 years after it commences.
There will be certain mandatory requirements of the license including:
- A valid Energy Performance Certificate
- A valid Gas Safety Certificate
- Carbon Monoxide alarms
- Smoke alarms
- Good management practices
- PAT testing (Portable Appliance Testing) of any appliances supplied
- Periodic Electric Inspection to be carried out every 5 years unless otherwise specified
We will be providing more detail in due course and advising those clients whose properties will require a license.
I am afraid that the license will be per property and not per landlord meaning the charge of £460 will be levied on each property owned.
For more information please visit the Brighton and Hove Council website.
GENERAL MARKET CONDITIONS
The market, which was very static this winter, saw the usual ‘bounce’ in the summer. Properties that became available benefited from some significant rent increases. This in turn has given us as a company the confidence to increase rent levels recently on many of the properties we manage on your behalf. Long may this continue!
Brexit still looms large in the distance however and it would be foolish to make any long term predictions as to what this may mean for the rental market in the UK. One thing I can state is that there is still very much a property shortage, in the South East of England generally, and in Brighton and Hove and surrounding areas. There is the South Downs protected land behind us and the Sea in front of us meaning a lack of building sites and therefore property values and rental levels should remain some of the best in the Country for the property investor.
Winter is approaching – it’s cold walking my dog at 6:30am now! – and the market generally slows but currently we have only 3 properties available out of a stock of circa 300 properties, around half of which we manage alongside our friends, RDA Estates. We have worked alongside RDA Estates for 25 years and they are truly experts in their field, sourcing good rental properties and, ultimately, enabling investors to enjoy the profit when they come to sell. Should any of our clients wish to be introduced to RDA Estates to potentially grow your own portfolio please contact me for an introduction.
The trend of longer term tenancies seems to be set which is great news for straight forward hassle free investment.
NALS GUIDANCE – FUNDING WORKS
We recently had an audit by the National Approved Letting Scheme (NALS) which we are a member of. They highlighted that payments for works for clients were being made from the client account and in some cases being recouped from future rental income. We were told in no uncertain terms that this practice cannot continue as otherwise we would have our license revoked. This license is vital for our reputation for clients and tenants alike in an unregulated industry.
This means that for any future expenditure that cannot be met by one months rental income funds must be forwarded by all clients without exception. This will also include service charge demands etc.