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Government want to ensure tenants in the

Private Rented Sector are not illegal Immigrants

Landlords Warned Over Illegal Immigrants

Landlords Warned Over Illegal Immigrants

Government ministers want to ensure tenants in the Private Rented Sector (PRS) are not living in the UK illegally and are already working with local authorities to tackle rogue landlords who exploit immigrants by housing them in ‘beds in sheds’.

Many private sector landlords already take the correct measures by tenant referencing all applicants to check the tenants’ identity and credit status, making it difficult for illegal immigrants to rent properties from them.

However, despite numerous calls from UK property industry specialists, not all landlords bother with tenant referencing, and a small minority of rogue landlords knowingly target illegal immigrants who would not be in a position to complain about any sub-standard rental accommodation.

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With newspaper reports of rising rent arrears and tenant rent defaults, many landlords want to protect against the loss of rent. There are a number of specialist products available for landlords to use including Rent Guarantee Insurance.

Here Legal 4 Landlords, the UK’s leading provider of specialist products and services to landlords and the lettings industry, explain the benefits of rent guarantee insurance, as well as looking at some of the smaller print.

How it works

The Truth About Rent Guarantee Insurance

The Truth About Rent Guarantee Insurance

In theory, rent guarantee insurance can be a landlord’s proverbial best friend: if your tenant fails to pay their rent, the insurer will pay you instead.

The outstanding amount is then recovered by the insurance company from the tenants directly.

Of course, in some instances you may agree with your tenant to accept a delayed payment because of financial problems or other extenuating circumstances, and therefore would not need to make an insurance claim.

On the other hand, landlords may face difficulties of their own some months, and for around £120 a year rent guarantee insurance offers you piece of mind that your rent will be paid on time and in full when you most need it.

Relief for legal costs and void periods

Most good insurance policies will also include legal cover for the eviction of the tenant. Landlords should note that the eviction process can be a lengthy and costly period of time, the legal cover provides landlords relief in terms of time and money.

What’s more, as long as the eviction process started within the policy period, the insurance company will continue to pay your legal costs up to the policy limit even once the policy has ended.

In addition, most policies will pay 50% of the rent for up to 3 months after eviction whilst you find a new tenant. However, if policy ends during the eviction process you will of course have to renew the policy in order to receive this and your monthly rental payment.

The small print

Tenants need to be thoroughly referenced and credit checked in order to be granted the policy. Landlords should have had these checks done before the tenant moved in so there should be no additional costs.

Some insurers won’t allow claims for the first 3 months of the policy, and there may be an excess to pay that is equivalent to one months’ rent and landlords won’t receive anything without renewing if you are in the last month of an active policy.

It also means that there is little point in claiming for rent that is a month late unless you are sure the tenant will continue to not pay and/or you want to evict the tenant.

With only 30 days to claim after the rent became overdue, this can be a difficult judgement to make as your tenant may well intend to pay.

If you do agree to delay payment by more than 30 days, make sure you keep all your correspondence otherwise you won’t be able to backdate the claim if the tenant doesn’t end up paying.

Not only do you then lose another month’s rent on the excess, but it could void your policy altogether in some instances.

Policy renewals are not guaranteed. Unless eviction proceedings begin immediately, any tenant defaulting towards the end of a policy could stop you from being able to renew and so the eviction costs could have to be met by the landlord

The way that some other rent guarantee policies are set up means that the odds are stacked in favour of the insurance company.

Despite this, in a recessionary environment with decreased job stability even tenants with a good credit history may face financial difficulties, so it is very worthwhile for landlords to take action protecting against rent default.

ARLA calls for more investment in UK buy to let

ARLA Calls For More Investment In UK Buy-To-Let Property Rental Market

The Association of Residential Letting Agents, (ARLA), have urged the Chancellor of the Exchequer, George Osborne, to use the forthcoming Budget to encourage more investment into the UK’s Private Rented Sector, (PRS).

ARLA have called on the UK coalition Government to support the observed growth in the UK Buy-To-Let sector and remove many of the prohibitive barriers to further investment.

ARLA’s Budget submission calls for landlords to be treated as running businesses for Capital Gains Tax purposes, for the introduction of roll-over relief for landlords looking to reinvest, and for UK Stamp Duty to be made fairer.

UK landlords currently have to shop around for a wide range of landlord services in order to help them save money and operate as a business. The emergence of Tenant Referencing and Tenant Eviction services and the development of specialist Landlord Insurance products have ensured that there is still money to be made, by UK landlords, from the UK PRS rental market.

ARLA’s Operations Manager Ian Potter, said: “Buy To Let landlords must be treated as the entrepreneurial businesses they have now become. Supporting growth and encouraging greater investment into the private rented sector will help boost our economy and is an open goal for the Chancellor. Demand for private rented housing continues to grow, with 3.4 Million tenants living in the private rented sector – an increase of over 1 Million tenants since 2005. The tax system can be used by the Government to incentivise investment in housing stock in the PRS, and therefore improve the conditions in which those 3.4 Million tenants live. Some landlords face tax bills of up to 28% when selling a property, preventing them from reinvesting in the market.”

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UK Buy-To-Let Mortgage numbers up 84,000 on 2010 figures

UK Buy-To-Let Booming Again!

2011 saw the number of UK residential properties bought using Buy To Let mortgages rise by 84,000 on 2010 figures.

Council of Mortgage Lenders (CML) figures show that landlords advanced a total of 34,800 buy to mortgages in the last three months of 2011 alone, with a total value of more than £4 Billion (GBP).

Therefore buy to let mortgage lending now accounts for almost 13% of the total outstanding value of all residential mortgages in the UK.

CML Director General, Paul Smee said “Buy-to-let lending continues to perform well. Demand for rented property remains high, so the rationale for buy-to-let remains strong and there is little reason to foresee any change to this positive outlook for the UK private rental sector.”

With improvements in the general availability of Buy-To-Let mortgage products, better tenant referencing and the introduction of specialist insurance policies such as Rent Guarantee Insurance, landlords are likely to have a few less financial worries, so, the PRS Buy To Let mortgage figures are very likely to rise again this year.

There are currently more buy to let mortgage products available than at any time since the onset of the financial downturn in 2007 and specialist mortgage lenders recently referred to 2012 as being ‘a boom time for landlords’.

House prices in England and Wales held steady in November, with no change on a month earlier and prices down 0.7% on the year, at an average £220,043.

According to the LSL/Acadametrics index, the only region recording annual price growth is London, where the value of the typical home has risen 3.1%.

November also saw an improvement in activity, with 4.5% more homes changing hands than this time last year.

LSL commercial director, David Brown, points out that static house prices don’t mean property values are standing still.

He explains: “For buyers looking to get onto the market, 0% price growth means that in real terms property is becoming more affordable. With inflation running at 5%, the real cost of property is getting smaller and smaller, which is good news for buyers and mortgage borrowers alike.”

According to Acadametrics chairman, Dr Peter Williams, the housing market in England and Wales looks as if it will end 2011 in better shape than expected.

As for the future, Dr Williams believes the outlook for transactions might weaken slightly in 2012, in the light of reduced confidence, tighter household budgets and restricted lending.

Buy To Let is expanding in the UK

UK PRS sees Strong Growth

The Council of Mortgage Lenders’ (CML), has noted that UK Landlords, Property Management Companies, Lettings and Estate Agents are currently seeing strong rental returns within the UK PRS, and this income improvement is likely to continue for the foreseeable future as the already high demand for private sector rented property continues to increase and many financial experts have also suggested the UK Private Rented Sector (PRS), will keep expanding over the next few years

The reasons behind the strength of the private rented sector include a shortage of social housing and the difficulty of would-be first-time buyers to be able to afford a home.

The Council of Mortgage Lenders noted that the UK Buy To Let sector offers, people who can’t buy residential property, multiple home options and some degree of quality of choice, whilst they save up to get their own foot on the property ladder.

The CML reported that the UK Private Rented Sector has been expanding rapidly over the last two quarters, with inward net migration one driver behind its growth in recent years, while some householders have decided to move into a leased property in order to rent theirs out to make extra money. A smart financial move, so long as they have remembered to get the correct permissions and suitable landlord insurance.

Many people are also choosing to rent property in the Private Rental Sector rather than becoming an UK home owner-occupier because it gives them more freedom and flexibility.

The fundamentals of growth in the number of UK households, combined with constraints on access to the owner-occupied and social housing sectors in the foreseeable future, suggest that over the next few years, demand for privately rented accommodation will remain strong and continue to grow.

The demand for UK Buy To Let properties is so strong at the moment that it is outstripping supply at an astonishing rate.

UK landlords could think about renovating unoccupied / empty properties or taking on repossessed homes in order to extend their property portfolio’s, to take advantage of the record numbers of people looking for rented accommodation.

Such prospective tenant demand means that UK landlords have the enviable position of being able to choose the best prospects for their properties, by means of thorough tenant referencing. Landlords are able to determine the financial backgrounds of all applicants prior to granting them an AST.

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