New licencing requirements for landlords in Newham

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Licencing of rental properties Newham could start a trend in the rental sector

Newham Landlords who rent out properties privately are the first in the country to face mandatory licensing which came into effect on the 1 January 2013.

Following a 10-week consultation on proposals to introduce a licensing scheme for all private landlords in the East London Borough, the scheme was approved by Councillors  making it a requirement for private landlords in Newham to show that they are “fit and proper persons”.

Landlords are now required to fill in an application form which allows the council to check the credit background of landlords as well as requiring them to provide proof of safety checks. Follow this link for more information from Newham Council, including a link to the form for licencing.

Newham Council ran a pilot scheme for 18 months prior to the Olympics charging £500 for a licence, or £300 for early applications.
The aim of the council is to improve the quality of private rented housing in the borough and eradicate so called ‘rogue landlords’ who do not take their obligations seriously. The discounted fee has been extended from the 1st January to the 31st January 2013 but it is unlikely to be further extended.

Newham mayor, Sir Robin Wales (above), said: “We want to ensure that private sector rented properties are well managed and meet a good standard.” He added “We also want to deal with the crime and anti-social behaviour that is sometimes associated with bad private sector rented housing,”

A national regulatory scheme to protect tenants was proposed by the previous Labour government after the Rugg Review, a reported on the private rented sector. The then government proposed plans to establish a national register of landlords, make written tenancy agreements compulsory and regulate letting and managing agents.

However, Coalition government housing minister Grant Shapps rejected the regulations as he believes the majority of England’s three million private tenants are happy with the conditions of their housing.

In 2010 he announced to landlord: “I am satisfied that the current system strikes the right balance between the rights and responsibilities of tenants and landlords.” Going on to promise “the government has no plans to create any burdensome red tape and bureaucracy.”

We would advise landlords who run their rental property as a business with the rights and responsibilities that incurs are unlikely to have any problems getting licenced by Newham or any other borough. Riley Marshall have noticed a marked increase in demand for new property in the rental sector over the last twelve months which is obviously good news for property developers, and investors. New properties are not likely to have any problems with licencing if it does come into effect more widely, but as long as your property is well maintained there is no reason you should have a problem even if it is an older building.

The Riley Marshall Blog intends to keep you up to date with property matters – why not check out our series on what you agent does for you click here to go to part 1 – Marketing.

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House Prices are subject to the North – South divide

block-managementProperty prices rose and fell around Britain last year but the trend overall was downward. With already low interest rates and lenders being cautious many people will have to continue to rent as mortgages are out of their reach

According to the figures released by Nationwide this week house prices fell last year however this is not the story over the Great Britain as a whole.

While average house prices fell in the North of England, Wales and Scotland by around 3%, worse in Northern Ireland which suffered an Northern Ireland 8.2% fall, while property prices rose in London by 0.7%.

Commuter zones also benefited from a slight rise, and by 0.2% the in the South West. This is probably due to the higher employment rates in these areas.

Many tenants would like to buy but deposit requirements are making it impossible for them to do so. Taking an average first-time buyer property price of £140,000 requiring a 20% deposit which amounts to £28,000, this would require buyers to save £450 a month for five years, assuming an interest rate of 2.5%. Out of most people’s pockets we believe.

So it appears that renting is going to be the future for many young people in the UK, if they want to set up their own home.

For information on the properties we have available please visit our home page and fill in the search options.

Gas Safety in rental property – What your agent does for you Part 6

Landlords: If you have gas appliances in your rental property they must be checked every year, and an annual Gas Safety Certificate issued by a Gas Safe engineer. We explore why you should use a letting/management agent?

Gas appliances must be checked by a Gas Safe Engineer

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How does your letting agent help?
Any gas installation and appliances in rented property should be safe. In the UK it is a legal requirement for landlords to have gas appliances checked by a Gas Safe engineer annually. Your Letting or Estate agent can arrange these inspections on your behalf. This can benefit you by finding the most competitive rates. They will liaise with tenants to get access to the property for workmen. Once the work is done the bills can typically be paid from the rent collected. Perhaps the most important role your managing agent plays is the keeping records of due dates and certification.

Letting and managing agents build up good relations with reputable local tradesmen and this often leads to these engineers giving priority to their agents when there is an emergency or urgent job to deal with. It is in their interests to make sure a bigger client like a letting/estate agent is happy in circumstances where they might keep an individual waiting.

Tenants are often not as patient as homeowners when it comes to repairs so this can be beneficial to landlords who value hanging onto their good tenants.

CORGI replaced by Gas Safe
The old approved registration for Gas installers was called CORGI, and many people still refer to it even though it been replaced by the Gas Safe Register. Any gas fitter in the UK, Guernsey, and Isle of Man must be on the register to work legally on gas installations and gas appliances. Any reputable agent will only allow any gas related work at your rental property to be carried out by a Gas Safe engineer. If your agent does not comply with this basic standard then they put you and themelves at risk of prosecution, in which case you should get yourself a new managing agent.

The engineer will test that the appliance is working safely and write a report on their findings. This will include any mandatory work, any recommended work, and an any notes for the future. If you are arranging an engineer yourself it is worth checking that they are Gas Safe registered (and not just claiming to be) you can check their credentials on the Gas Safe Register site here.

When to get your Gas Safety Certificate
Your letting agent should arrange your Gas Safety Certificate to be issued before you let your property. Do not leave it until the tenants move in. We understand this means you incur costs before the property is let but moving tenants into a potentially unsafe environment has legal implications for you as landlord and for your letting/management agent. You may have a valid Landlords Gas Safety Certificate already in place from a previous tenancy and this is perfectly acceptable. Your letting agent should have a copy for their own records. You do not need to have a gas safety inspection carried out at the beginning or end of each tenancy – just on an annual basis.

Renewing your Gas Safety Certificate when appliances are serviced saves you money
If you are not sure when to have appliances serviced and maintained, it is worth noting that although anniversaries of renewal are likely to be dictated by the first tenancy, it is actually a good idea to have gas appliances tested, serviced, and maintained in the spring and summer. That way if there are problems to be addressed the tenant will be less inconvenienced. Finding a reliable GasSafe engineer, with time to make repairs, will be much easier in the summer too. There is no problem with having two Landlords Gas Safety Certificates issued within a year if you decide to make your dates coincide, just don’t wait for longer than 12 months t have your safety certificate issued.

Remedial works – your agents role
If the engineer finds a gas appliance or installation is not safe he is obliged to disconnect it and place a warning sticker on it (like the one below), so the tenant cannot use it, until it is repaired. This can upset tenants and so it may be helpful for you to have a letting agent as a middleman to deal with their concerns.

One of the best ways to prevent this inconvenience to your tenant is to have the appliance serviced when you have it tested. This is most appropriate for gas boilers and fires. Many landlords assume that their appliance will be serviced as part of the fee, but actually it is more like a car MOT – the engineer is simply testing performance and not carrying out any maintenance work. Your managing agent can arrange to have the appliance serviced at the same time as the annual gas safety check, and it is often cheaper to have this done together, rather than on two separate visits.

Remedial works are tax deductible and any good managing agent will receive the bill on your behalf, deduct the amount from rent paid by the tenant and pay the contractor for you. Your letting agent will keep records and issue statements which you can use to fill in tax returns.

About Riley Marshall Limited
Riley Marshall are Estate agents who specialist in letting and management of properties in South East London. If you would like us to come out to discuss managing your property around Greenwich, Shad Thames, Bermondsey, Rotherhithe, Deptford, Lewisham or New Cross areas then please do contact us for a free valuation. For other blogs on matters relating to property please visit our main blog page.

What your agent does for you – Part 5 Feedback

The benefit of the feedback you get from your agent cannot be overestimated. Agents spend their days talking with tenants so they know exactly what tenants want and can quickly react to trends in the market. Fluctuations in the market occur for a number of reasons throughout the year, (which could be the subject of another blog) and a good agent is an excellent tool for measuring demand. This blog explores how best to utilise this valuable resource.

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Your agent should give you regular feedback on viewings at your property. Make time for them to do this for you, tell them what methods of contact you prefer and when you like to be contacted. Some landlords like to be called each time we visit and others prefer a quick email, some want a weekly roundup.

You can do your part by remaining receptive to what your agent is telling you. It is much easier for an agent to advise you if you are clear about what you are, and are not, prepared to consider in respect of tenants’ requests. These may include: removing or providing furnishings; negotiating on rent; agreeing move-in dates; and improving décor and maintaining the property.

It might help for you to have a best scenario in mind, and an idea of your lowest limits. For instance the table below shows what you would really want, but gives the agent an idea of what you might be able to accommodate if a tenant requests it. You don’t have to prepare it in such a formal way but it might help you to list them in a way that you find appropriate, and then discuss the points with your agent. Don’t forget to keep re-evaluating this throughout the process if things change.

Best Will accept Will not accept
Rent £1000 per month £900 per month Less than £880 per month
Professional tenant students with guarantor students without guarantor DSS tenants
Furnished as it is removing any furniture apart from the beds adding furniture or removing the beds
Décor as is Painting the living room and kitchen and external paintwork Painting any other areas or replacing windows/doors
Move in 1st December 2 week lead time More than a month lead time without increasing the rent

If you have laid out your wishes to your agent in this way they will still bring offers to you – indeed they are obliged to put offers forward, however they will have been able to negotiate ‘best terms’ offers with the prospective tenants based on your wishes, before approaching you. This should save a lot of time for you and the tenant, and allows us to act more efficiently as your agent.

See more in our series of Blogs on What your agent does for you

What your agent does for you – Part 1 Marketing

We like to blog in series – giving our clients information in bite sized pieces that they can easily digest. In our latest planned group of blogs we are going to look at the role that the agent plays in … Continue reading →

 

Bucking the trend of slating the ‘Olympic Landlord’

The positive side of The Olympics and the  rental market in London

While many landlords and agents have come under fire from the media because of the higher rents they are charging over the Olympic period, bear in mind that without residents offering this facility we would not be able to house all the extra visitors the Games will generate, because our hotels would be filled beyond capacity.

It may seem that some of the properties are expensive, however take an example of a three-bed house in Greenwich sleeping eight people, which is being rented for £11,000 during the Olympic Games period – including the opening and closing ceremonies. So sixteen nights’ accommodation for £85 per person per night, which sounds much more reasonable, especially when you take into account the owners higher risk and depreciation, not to mention the higher demands being made for this type of tenant who is expecting hotel-like service.

Also while these temporary tenants are staying in the community they will be spending money in local shops, cafes, restaurants and bars. This could well be happening in areas that don’t traditionally benefit from tourism.

This is not to excuse the behaviour of property owners who have treated their long-term tenants badly but, as always, this is a minority of people in a sector of the industry that has risen to the challenge of accommodating extra visitors in a creative and flexible way. Most landlords have taken the view that if their long term tenants are settled they will not try to ‘cash in’ on the Olympics, but where their property is naturally available they have tried to maximise their assets.

The role of the Agent is always to find the best (highest) rent that the market will bear for their clients property and while some Agents may have been very bullish about the market it is always easy to criticise this attitude in retrospect. Landlords were expecting high prices, tenants were expecting high prices, no one knew what the supply and demand figures would actually be and so agents had to test the market to ensure they didn’t let property too cheaply. It is worth noting that Estate Agents would have been criticised for this action as they are for charging high rents.

There are many local people who do not fancy trying to live their normal lives with the disruption of the Games going on who will be away for the duration and for them the chance to let out their property allows them to take a comfortable holiday and make a little extra money too.

Anyway with the Games almost upon us perhaps it is time to draw a line under this argument? There are unlikely to be any visitors that have left it this late to rent accommodation.

You can see out other blog on Olympic letting here.

How has the Olympics affected the London rental market?

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With around 4 million extra visitors to London over the Olympic period it was forecast that the rental market would explode during the games, the reality has been less inspiring.

Properties that are very luxurious, or have views of one of the venues, or those that offer the chance to stay in central London while visiting the games, have been successfully and profitably let, but the chances of renting out an average family home in the east end of London are looking increasingly less likely as the games draw nearer and landlords are accepting that they are not likely to cash in on the Olympics.

In April this year The Guardian reported one agent who has closed his books on the Olympic lets because he is oversubscribed and another manager of a chain who confesses they had let less than ten of the five hundred Olympic lets on their books.

There have been cases of unscrupulous landlords evicting tenants illegally to take advantage of the higher rents that can be achieved during the Olympics. One case highlighted by the BBC is of Ninna Thorhuge who was given two weeks’ notice to leave. This is not legal and Housing minister Grant Shapps gave a statement to the BBC condemning this behaviour “Landlords should be under no doubt that it is a criminal offence for them to evict a tenant without giving proper notice, and that anyone found guilty of doing this – or of harassing a tenant – could lead to a custodial sentence of up to two years.’

For landlords to act within the law, tenants must be served with a valid notice before they can be evicted, which is usually two months, and then they can only be evicted after a court order has been issued, and a baliffs warrant granted.

Evicting long term tenants is a very short sighted attitude that is unlikely to pay off for landlords. When the mass of people abate after the Olympics, those landlords with long term regular tenants may well feel they have the last laugh as other landlords all try to relet their Olympic lets at the same time.

In many cases the short term gains will be wiped out by the void periods between lets, the expense of adding furniture and fittings and the increased wear and tear likely to property let on this basis.

There were reports of similar property scrambles in Sydney and in in Vancouver after the Olympics in those cities, with parallel tales of disappointed Landlords and disgruntled tenants.

Landlords who are renting their property on a short term let should see our blog on the ‘legalities of renting during the Olympics’.

Landlords tell your Tenants

If you own property in an area that will be affected by the Olympic and Paralympic Games then you may want to send your tenants this blog page.

Temporary parking restrictions during the Olympics

Now that the Olympics is becoming a concrete structure in our lives – literally and metaphorically – our mind is turning to the practicalities that surround those of us who live and work around the venue sites.

In case you are not aware of what is about to happen to your free on-street parking this guide aims to enlighten and inform.

The Olympic Games start on Friday 27th July until Sunday 12th August, followed by the Paralympic Games from Wednesday 29th August until Friday 9th September.

There will be temporary parking restrictions around the Games Venues to prioritise parking facilities for local residents and businesses, and to prevent spectators from using local on-street parking. Obviously London is going to be most affected by the volume of visitors, but other areas will also have changes to their parking arrangements too.

There are different permit arrangements in different areas and the official 2012 website has a list detailing what they are Click Here.

Most people who live in these areas will have had information about parking changes through their door, but if like me you don’t read all of the community news pamphlets, then you may have noticed some red and white blocks appearing at the end of your street. These will hold signs stating the temporary regulations for parking that will occur during the Olympic and Paralympic period.

The local borough councils are aiming to link up the DVLA records with their Council Tax information to ensure that local residents and business are automatically issued with permits. It is recommended that if you haven’t received these in the next two weeks then you should contact your local authority.

Procedures are in place for those who live in an affected area but whose car is registered elsewhere, (for instance if you have a company car), and in this instance you should contact your local council to register your vehicle. This can be done online.

In addition to these measures London Councils are recommending an increase in illegal parking fines to £200 and will be prioritising towing vehicles that are illegally parked in order to keep the highways as free as possible.

Residents and local businesses are also entitled to visitors parking permits for the duration of the temporary parking. Details of when this will be and how many will be issued is yet to be released.

These changes affect street parking only. Parking in your private driveway will remain unaffected. If you currently live in a controlled parking zone then your permit arrangements will remain unaffected.

It is not yet clear what will happen about house removals in these areas but for up to date information on this we can recommend checking in with ICM Gerson who have a very informative blog about the industry.