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Rental Property Seen As Safe Investment

Rental Property Seen As Safe Investment

Landlords Increasing Rental
Property Portfolios

There has been a rise in the number of landlords expanding their rental property portfolios over the last three months, according to fresh research by the Association of Residential Letting Agents (ARLA).

ARLA questioned its members to find out if landlords are currently increasing their investment in rental properties in the private rental sector (PRS) and they discovered that the number of landlords buying properties has risen from 30% to 39% over the last three months.

ARLA have taken the responses from their members to indicate greater confidence in the UK private rented sector and that rental property is still perceived as a safe investment amidst ongoing global and national financial instability by landlords with existing rental property portfolios.

ARLA research also revealed that fewer landlords are quitting the UK private rental sector and selling their rental properties too, with numbers incrementally down on the previous quarter, from 15% to 14%.

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Countrywide’s Quarterly Lettings Index Results

Survey Reveals Favourable Rental Market For UK Landlords

Survey Reveals Favourable Rental Market For UK Landlords

Results from the latest Countrywide Quarterly Lettings Index has revealed a favourable UK lettings market for buy to let landlords.

Countrywide’s Quarterly Lettings Index analyses rental prices, rent arrears and gross rental yields in the UK private rented sector and is the UK’s largest national lettings index based on over 50,000 properties across England, Scotland and Wales and the latest survey has uncovered a number of interesting statistics:

  • Average monthly rents in Inner London are the highest in the UK and four times more than in Scotland
  • Scotland has the cheapest rental accommodation in the UK and is the only region where arrears have increased
  • Average monthly rents increased the most in Wales and the East of England at 5.5%, followed by Outer London at 5.4%
  • Average UK rental yields of 6.2%, with Wales topping list at 6.7%
  • Rising rents, falling arrears and fast letting times provide perfect recipe for buy-to-let investors
  • Average rents have risen and rental payment arrears have fallen in Q1 2013 compared to the prior year.

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Specialist Insurance can help landlords profit from property

Specialist Insurance can help landlords avoid tenant rent default

In the UK private rented sector, the average rent for a residential property now stands at a staggering £777 (GBP) per month across the whole of the country but there are some regional differences.

Private sector rents in Greater London rose by 6.7% during the last 12 months to reach a regional average of £1,224 (GBP) per calendar month (pcm).

In stark contrast, PRS tenants in the North-East living in similar sized properties are paying an average rent of just £512 (GBP) pcm.

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Fall in the number of tenants in severe rent arrears

Fall in the number of tenants in severe rent arrears

The number of tenants in severe rent arrears declined by 15.6% during the final quarter of 2012, according to data released by Templeton LPA, part of the LSL Property Services group.

The data indicates that in the last quarter of 2012, almost 16,000 fewer tenants faced severe rent arrears of more than 8 weeks rental costs, compared with the previous quarter of 2012.

The number of tenants in this situation has dropped for the first time in over a year and could in part be due to the development and availability of Rent Guarantee Insurance products.

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2012 Property Investment Review

2012 Property Investment Review

Well it’s the end of the year that was supposed to mark the end of the world for mankind and yet we survived and it wasn’t all doom and gloom, 2012 did bring the UK some joy with events and celebrations across the country, including:

For the general public: An inferior team, who hadn’t won anything for over 34 years, winning the 2011/12 Premiership title with virtually the last kick of the season, (not that I am a biased Man Utd fan or anything….), the Queen’s Diamond Jubilee, the Olympics and Paralympics, the end of the double dip recession,

For Property Investors and landlords: 2012 saw the emergence of Rent Guarantee products that are good value for money, property prices continuing to behave like a roller coaster ride but eventually recovering and ending the an average of 1% year up on last year’s prices and lets not forget the return of some decent Buy To Let mortgage products to the UK mortgage marketplace.

How was 2012 for you? Has the year lived up to your expectations and did you achieve any of your property investment goals?

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Landlords Lose Out Due To Unexpected Costs

Landlords Lose Out Due To Unexpected Costs

If You Fail To Plan Then You Are Planning To Fail

A recent survey by a national lettings agency has highlighted financial losses incurred by UK landlords due to failing to adequately plan for unexpected costs.

 Landlords pay on average around £1500 (GBP) per year of their rental income covering tenant rent arrears, maintenance, repair bills and void periods; a figure that equates to over £2 Billion (GBP) per year nationally, according to the survey by Northwood.

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Avoid Tenant's from Hell

Avoid Tenant’s from Hell

As thousands of people struggle to sell their properties in the current financial climate, many are turning to renting them out in order to move on with their lives. However this comes with its own problems and responsibilities that many people are not really prepared for.

Being a landlord means you have legal responsibilities towards the housing of others. In order to stay on the right side of the law, provide a place where people want to live and avoid tenants from hell, it is recommended that landlords should seek to use recognised and trusted professional services to help them operate their rental property business and educate themselves before it’s too late.

The most common concerns faced by new landlords regarding offering a new tenancy are:

  • Background of tenants
  • The rent / rent arrears
  • Property maintenance
  • Insurance
  • Legal compliance

Tenant Referencing

Every landlord wants to avoid the tenant from hell, someone who doesn’t respect where they live, the neighbours or the landlord and who doesn’t pay the rent. Tenant referencing can help landlords avoid bad tenants and professional referencing should include:

  • Credit Check
  • Employers / Accountants Reference
  • Landlords / Managing Agent’s Reference
  • Financial Review
  • Bankruptcy Search
  • Anti Fraud Check

Rent Guarantee

With the current financial unrest still being felt by many people, employment uncertainties and austerity measures still emerging, it can be a worry for landlords and their tenants about being able to pay the rent on time.

The rent can be guaranteed providing that the conditions of the rent guarantee insurance are met, usually meaning that the applying tenant must be credit checked and properly referenced prior to the start of the tenancy.

Property Maintenance

Landlords may need to provide repairs or conduct regular maintenance on their rental property in order to maintain their income producing asset. They may know a bloke from the pub that can do the job but it is recommended to use recognised tradesmen to do any work on the property. Repairs will be done to the correct standard and tradesmen should be professionally registered with their respective federations to ensure quality. Any repairs involving gas can only be conducted by a GasSafe registered engineer.


Landlords need to ensure they have adequate insurance for the protection of their rental property, many mortgage providers demand proof of insurance. There are a multitude of different insurance products on the market but it is recommended that landlords protect the landlord’s contents within a property as well as the fabric of the building. This means fixtures and fittings such as the kitchen and bathroom suite are insured. Find out more here

Legal Compliance

Self managing landlords need to ensure they are compliant with over 70 separate pieces of government legislation and a raft of local authority regulations. There are a number of useful governement resouces that can be found on the web, however, it is recommended that landlords seek professional property management agents to ensure that all the correct legal requirements are met.

Tenants without Rent Guarantee Insurance Face Higher PRS Rents

Tenants without Rent Guarantee Insurance Face Higher PRS Rents

Rental prices in the UK Private Rented Sector have now reached a new record high, with the average PRS rent during September across the UK reaching approximately £741 (GBP) per calendar month (pcm).

The startling cost of PRS rental was revealed by LSL property services and represents a rise of 1.1% on the previous record high of £734 (GBP) set in August 2012.

Taken as an annual average, PRS rents have increased by 3.2% across the whole of the UK.

Rental prices in London and the South-East regions went up the most, with PRS rents rising by 1.7% and 1.9% respectively.

Average rent in London is now 6.2% higher than in 2011, averaging £1062 (GBP) pcm.

In other parts of the UK there are still pockets where rental prices are being forced down due to tenants driving a hard bargain with landlords and letting agents. Rental prices saw a decrease in three UK regions in September:

  • East of England
  • Yorkshire & Humber
  • West Midlands.

However, the increase in PRS rental prices in the rest of the UK has also left tenants without Rent Guarantee Insurance financially struggling, with 9.1% of all rent due to landlords being late or unpaid at the end of September.

Landlords can take steps to ensure regular rental income and ease the financial burden faced by many tenants by obtaining market leading Rent Guarantee Insurance from

Tenant Referencing Is Crucial For Landlords

Tenant Referencing Is Crucial For Landlords

Most tenants are complete strangers, who as a landlord, you may meet once or twice before granting a tenancy agreement to or handing over the keys to the rental property.

If using a good letting agent, the landlord may not even meet the tenant until after they have moved in.

This leaves the landlord with a few questions, including:

  • What are the tenants like?
  • Have they rented previously?
  • Have they always paid their rent on time?
  • Why do they need the property?
  • Do they look after their home?

As a landlord, if you were approached by a person on the street and asked for the keys to your rental property on the promise that a stranger would look after it, would you hand over the keys?

Surely the answer from experienced landlords and clued up property investors should be a resounding NO!

But the scary thing is some inexperienced landlords are not far off doing this exact thing when renting out property to tenants.

Tenants can potentially cause expensive problems that can cost even more to put right and the risk of this increases if landlords haven’t vetted them properly.

As much as everyone would like to live in a world where people can be taken at their word, in terms of their character and reliability, unfortunately the truth is somewhat different. The unfortunate reality is that no-one can be taken at face value and it’s advisable to have a reputable tenant referencing company carry out checks on all potential applicants, which will include credit checks, employer references and previous landlords’ references.

Tenant referencing should be completed before offering a tenancy agreement or allowing tenant’s to move in.

The credit check will detail the tenant’s credit profile via credit reference agencies to determine any adverse history such as missed payments or CCJs (County Court Judgements).

A tenant with a low credit score may not be all bad! They may have had problems in the past making payments on finance, or they may have been assessed by the credit reference agency as a risk because of difficulty making payments.

A low credit score doesn’t necessarily mean that you are dealing with a bad or unreliable tenant – an example would be students who have little or no credit history and as such may possess a bad score.

Legal4Landlords offer specialist services for landlords and letting agents

Legal4Landlords offer specialist services for landlords and letting agents

In situations like this, as long as the other aspects of the tenant reference are adequate, a guarantor can be sought for the tenant. However, the guarantor will have to undergo the same referencing procedure.

The tenant reference should detail

  • The performance of the tenant during the course of their previous tenancy.
  • Payment history
  • The condition of their previous rental property at exit
  • Whether their previous landlord would rent property to them again

This should help the new landlord get a good indication of the applying tenant’s track record.

The employment reference determines

  • Tenant’s employment status
  • How long they have been employed
  • Salary.

This information will enable the landlord to determine if their wages are enough to cover the rent, bills and associated living costs and also the stability of their employment, i.e. whether they are permanent or temporary employees.

Even tenants in long-term employment could be at risk of redundancy in the current economic climate, and landlords should take advantage of rent guarantee insurance, which protects the landlord should the tenant default on their rent.

It is advisable for landlords to offer a 12 month contract (AST) with a 6 month break clause to allow for flexibility in case things do go wrong during the tenancy.

One month’s rent should be taken in advance from the tenant along with a damage deposit equivalent to 6 weeks of rent.

This allows for a financial buffer in case the tenant fails to pay the last month’s rent at the end of the tenancy or if there is damage to the rental property.

Tenant Referencing by Legal4Landlords

Tenant Referencing by Legal4Landlords

Landlords Need To Educate Themselves To Take Advantage Of Products And Services Designed To Help Them And Their Tenants

Landlords Need To Educate Themselves To Take Advantage Of Products And Services Designed To Help Them And Their Tenants

If you are considering becoming a Buy-To-Let landlord you should calculate the costs involved and do plenty of research before taking any financial risk.

This is according to Sim Sekhon, spokesman for specialist landlord services provider, Legal 4 Landlords, who explained that many new landlords rush in without calculating mortgage repayments or repairs and maintenance to rental property. He said “There are an increasing number of property investors who have been forced to adapt their strategies due to the instability of the UK property market, and they have ended up as reluctant landlords, when they are unable to flip properties. They end up either self managing the property or handing to a letting agent to deal with, often forgetting to calculate running costs. Landlords need to remember that as far as rented property is concerned, profit without Rent Guarantee insurance is a long-term investment, and property maintenance and repairs will be a cash drain.”

Landlords must treat their rental properties as a business and calculate all of the necessary financial requirements of running it before purchasing an investment property, and investors should plan to reap the benefits both in the short and long term.

Mr Sekhon added: “Landlords can increase rental yields and reduce void periods by Tenant Referencing all applicants and using rent Guarantee insurance for all of their tenants. We have developed a range of specialist products and services for landlords and letting agents to get the most from UK Buy-To-Let whilst providing long term reassurance for tenants.”

The full range of all products and services offered by Legal 4 Landlords can be found here

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