With Brexit looming, it’s unclear what the state of the UK economy will look like in a few months’ time, let alone the private rented market.
While it’s right to be wary, Brexit doesn’t necessarily spell disaster for landlords. In fact, there may even be some positive developments. Here, we look at how Brexit will affect the rental market, what it might mean for landlords and how to protect your investment in this unsettling period.
Will Brexit Affect Right to Rent?
Since February, 2016 it has been a legal requirement for landlords to ensure that their tenants have the right to rent in the UK. If landlords are found to be letting to an illegal immigrant, they could face fines of around £600 per tenant.
However, Brexit brought new uncertainties as guidance on the new regulations after leaving the EU were unclear, particularly in regard to the status of EU national renters.
For now, the Home Office have confirmed that during this transitional period, EU nationals will still have the right to remain in the UK and will be able to use their current passports or ID as proof of legal status. According to the Home Office, the European Union settlement scheme will provide legal EU citizens with digital documents to make these checks easier for landlords.
However, longer term this could cause issues, especially if longer term tenancy agreements are signed, as the legal status of some tenants may change post-Brexit.
The most recent update from the government confirms that the right to rent check regulations will stay the same until January 2021, regardless of whether a deal is made. Similarly, the requirements for Irish citizens will not change.
How to Stay Protected
One of the easiest ways to stay on top of essential document checks is to enlist the help of a professional reporting service.
No Letting Go clerks can verify right to rent documentation at check in, to determine whether they match the tenant’s appearance as part of our right to rent service. This is particularly helpful for landlords who aren’t able to meet with tenants personally.
Unstable House Prices: Good News for Buy-To-Let Landlords?
Brexit uncertainty has caused the UK housing market to slow down, with average UK house prices falling by £5000 at the beginning of this year.
This could be seen as a positive for buy-to-let landlords who can take advantage of this lull in the UK property market. For landlords looking to expand their portfolio, it could be your chance to buy for less.
However, a lack of stability is understandably putting some people off;
- Recent changes to stamp duty have meant that landlords have to pay an extra 3% on each band on new buy to let properties, significantly increasing outgoings.
- While the reduction of tax relief for buy-to-let mortgages means landlords will be paying more in tax by 2020 and may even find themselves in a higher tax bracket.
Combined, these changes are making landlords think twice about investing in buy-to-let as it may be harder to enjoy the same rental yields as before.
How to Improve Your Rental Yield
If you do decide to take the plunge, you may find a real buy-to-let bargain!
To minimise the risks, it’s worth doing your research to find the best place in the UK for rental yields.
Brexit and Mortgages
Depending on what happens to Bank of England interest rates, mortgages could be affected by Brexit. It has been suggested that the base rate may rise after Brexit, which could make buy-to-let mortgages more expensive. One way around this could be to re-mortgage your property now, before the economy shifts.
Nonetheless, if this is the case, mortgages will be equally difficult to obtain for prospective house buyers, adding to the increase in those looking to rent.
The Impact of Brexit on the Rental Market
The instability of the UK housing market could put off potential home buyers from taking any risks in the near future. With less people buying, this could be good news for letting agents and residential landlords, as more people will be looking to extend their lease.
Shortages in social housing could also result in a rise in rental demand, placing landlords and property professionals in the private rental sector in a good position.
Bearing this in mind, it looks like the rental market should stay secure for the foreseeable future.
One thing to think about is that the location of your rental property could have an impact on the number of prospective tenants looking for housing. For example, some No Letting Go regional branches in which a higher level of EU nationals reside experienced lulls after the referendum due to uncertainty surrounding legal status.
How to Stay Protected
Providing quality rental properties that people want to live in will help minimise the risk of any void periods as we prepare for this transition. Staying on top of essential property maintenance and providing an appealing home for tenants will help to ensure you don’t lose out.
Property Renovation and Build to Rent
If you’re thinking of renovating your rental property or building property to rent, Brexit could make things a little difficult.
As much of the construction materials and labour resources used are imported from around the EU, tariffs and ease of supply could be affected. So, if you’re thinking or extending or renovating, you may need to save up more than you originally planned for to be on the safe side.
Thankfully, the government has confirmed that those with EEA qualifications, such as EU architects will still be able to work in the UK, even in the event of a no deal Brexit. Therefore, there shouldn’t be any disruption to ongoing work.
Brexit for Landlords: Stay Protected
To sum up, Brexit may not be the blow some private landlords thought it might. Although it’s hard to predict what might happen in the coming months, unstable house prices and rising mortgage rates could even drive the demand for rental properties.
To make sure you don’t miss out when the time comes, it pays to have a solid plan in place. And that’s where we come in.
Our professional property inventory services provide you with the essential reports you need to stay on top of the latest legislation. Covering everything from right to rent to property appraisals, our teams of experts are here to help protect your investment and give you peace of mind.
Browse our full list of property services to find out more about our individually tailored services.
Last year we attended the National Franchise Exhibition in Birmingham, where we spoke to potential franchisees about what we offer. This year, we’re heading to the Northern Franchise Exhibition to share our latest franchise opportunities alongside hundreds of other approved franchise brands.
Here’s what to expect from the event and a little more on what a franchise with No Letting Go involves.
What is Franchising?
Firstly, let’s define the meaning of franchising.
Franchising is the process of purchasing a ready-made start-up from an existing company and operating the business under the name of the established company.
This helps companies expand, as well as providing the franchisee with essential training and experience of running a business.
The Benefits of Franchising
Purchasing a franchise gives franchisees added support and peace of mind when it comes to operating their own business.
With the backing of an established brand behind them, new business owners are equipped with expert knowledge and a recognised name from the get-go.
In addition, most franchises offer initial and ongoing training to help secure success.
The Northern Franchise Exhibition 2019
The Northern Franchise Exhibition is being held at EventCity Manchester on the 21-22 June 2019.
If you’re looking to invest in a franchise, or considering franchising your business, this event is a fantastic way of accessing insider industry knowledge. With a huge variety of franchise opportunities on offer, there is something to suit every need.
This event is a BFA supported franchise exhibition. As a partner of the British Franchise Association (BFA), you know that all the franchise opportunities listed are fully accredited.
The event gathers together leading franchise brands for two days of presentations, workshops and Q&A sessions to help those looking for franchise opportunities in the UK.
This year, No Letting Go will be exhibiting to showcase our exciting franchise opportunities currently on offer.
Keen to attend and meet us in person? Visit our stand where our team will be happy to answer all your questions and give you an insight into what it means to be one of our franchisees.
We’re pleased to offer free tickets from the official website. Just use the promotion code KIT1.
A Franchise with No Letting Go
We have over 50 property franchises across the UK, and we’re always looking to expand. A franchise with us means you could be providing your local area with our professional property services, including inventory management and reports.
The great thing about starting a franchise with No Letting Go, is that you don’t need any specialised industry experience or qualifications. All we ask for is your time and commitment. We run a highly accessible scheme, with franchisees from all walks of life heading up our UK offices.
The Training Academy
If you start a franchise with us, you will receive access to an ongoing training programme which covers how to conduct reports, inventories, use our Kaptur software and perfect your sales and marketing techniques.
As well as day-to-day training, we also provide help with business strategy and expansion to ensure you have all the tools needed for long-term success.
How to Start a No Letting Go Franchise
If you’re interested in becoming a No Letting Go Franchisee, and joining our team of successful business owners, here’s how the process goes;
- We’ll start with an informal chat over the phone.
- We can then meet up to get to know you and explain the funding options available.
- The next step is to put you in contact with an existing franchisee so you can get an insight into what a franchise with us is like.
- We’ll then review your financial projection and make a decision.
Finally, you will receive your training pack, ready to get started!
Become a No Letting Go Franchisee
No Letting Go is a leading inventory management company for letting agents, landlords and property professionals. We provide unbiased property reports, checks and check in/check out services for our clients across the UK.
If you’re looking for a franchise opportunity with high income, a quick return on investment, and low set-up costs, then get in touch via our property franchise page.
Landlords and property professionals get ready!
Thanks to the introduction of the Tenant Fees Act on 1st June, you’re likely to see an influx of tenants looking to benefit from this ban on tenant fees.
Recommendations from No Letting Go have recently been featured in the Property Reporter, exploring the impact of this upcoming ban on tenant activity and how landlords and property professionals can get prepared.
Read on to find out how to prepare for the tenant fees ban with our handy quiz and guide.
What is the Tenant Fees Act 2019?
The Act sets out new rules and standards for landlords and letting agents, banning several upfront fees.
This ban includes the following:
- Security deposits must not exceed the cost of five weeks rent
- Holding deposits must not exceed one weeks rent (and should be refundable to the tenant)
- The fee to change a tenancy will be capped at £50
Any breaches to these new standards could result in hefty financial penalties from the enforcement authorities, and landlords will be unable to seize possession of a property through section 21 notices until they have repaid these charges.
When is the Tenant Fee Ban Coming In?
The Tenant Fees Bill was first proposed by the government in 2017 with the aim of making renting more affordable for tenants.
The Tenant Fee Act comes into force on 1 June 2019 from which date landlords and lettings agents will no longer be allowed to charge fees as described above.
Tenant Fee Ban Update: Impact on Tenant Activity
Research from the Deposit Protection Service (DPS) identified a lull in rental activity during the first quarter of 2019 which they attribute to tenants delaying moving until this ban becomes law on 1st June.
According to Nick Lyons, No Letting Go’s CEO;
“It’s no surprise to see shrewd tenants delaying moves until after the fees ban and deposit caps are introduced on 1st June. The upfront cost of moving between rental homes can be high – particularly in London and the South East – so renters will do anything they can to keep costs down, even if that means putting their move on hold for a few months.”
The Impact on the Private Rented Sector
With potential tenants waiting to make their move, landlords and property professionals will need to prepare for a surge in activity after 1st June.
It’s likely that tenants have continued their property search over the last few months and will be ready to begin the rental process as soon as the ban is in place.
This swell in tenants could be an exciting time for landlords and property professionals, with lots of potential profits on the horizon. The better prepared you are as a landlord to take this on, the more you can benefit from this demand.
How to Prepare for the Tenant Fees Act
The first thing you can do as a landlord or property professional is to ensure you are fully aware of the details of the ban and which fees are prohibited payments.
The Tenant Fees Act Quiz
Here at No Letting Go, we’ve put together a useful quiz including all the important points you need to remember about the upcoming Act.
This short, multiple choice quiz consists of 15 questions encompassing everything from tenancy deposits to permitted payments.
Another way to stay ahead of the curve is to outsource important reporting and services to the experts.
The Importance of Professional Inventories
With deposits being capped at five weeks rent, landlords and letting agents will need to take extra precautions when it comes to protecting their rental properties.
If you own property in locations such as London or the South East, this change could make a difference to the amount of deposit you can ask tenants to pay. To compensate, having a comprehensive inventory in place can help when it comes to making deposit deductions.
No Letting Go provide independent inventory reports detailing the condition and contents of your property at the start and end of the tenancy. Using the latest software, the report contains extensive written and photographic evidence in addition to meter readings and safety compliance checks.
The benefit of investing in a professional inventory service is that an unbiased account can help prevent and resolve any conflicts that may arise.
For lettings agents, partnering with us could save time and money at what looks set to be a busy period this June. Outsourcing this administrative work will free up time to provide a personalised service to your clients.
Get Prepared with No Letting Go
To ensure you have everything in place before 1st June, it’s best to start preparing now. Once you’ve got clued up and taken our quiz, it’s time to think about streamlining your workload.
No Letting Go provides services encompassing everything from right to rent checks and house viewings to unbiased property inventory reports.
Browse our full list of services here to find out how we can help you navigate this transition.
In a rapidly changing world, the property management industry needs to keep up. With the widespread digitisation of products and services taking over almost every sector, estate agents, property professionals and landlords alike will need to stay on the pulse.
PropTech has become one of the latest buzzwords on everyone’s lips. However, this doesn’t look like a passing fad. Not only could property tech improve the property market, but it could completely transform it for the better.
With this year’s Future PropTech event coming up, we thought it was a good time to explain what PropTech is, and why as a landlord, you should embrace it.
What is PropTech?
Firstly, let’s try to define this much-used term.
PropTech, or property technology, refers to the digital transformation of the property industry. This includes innovative technology products to improve the real estate industry as a whole. From 3d printing and machine learning to big data and virtual reality, real estate technology is ramping up a gear.
So, how could PropTech benefit you as a landlord or real estate professional?
Simplifying Tenant Checks
There’s a lot that goes on behind the scenes for property professionals when letting a property. From tenant checks to inventory management, the list goes on.
New, smart technologies could help simplify and streamline some of these processes.
Moving potential tenant checks into the online space could be key in managing workloads. PropTech innovations can help this happen, by providing easy online systems or applications. These online systems can conduct credit checks, employment history checks and process references, all at a few clicks of a mouse.
Finding the Right Tenants
Artificial Intelligence (AI) is making waves in the private rental industry and could help landlords and tenants alike find the perfect match.
By providing accurate data, smart algorithms can pair landlords with the right tenants, eliminating unsuitable partnerships and saving time.
The Badi Platform, for example, helps novice landlords rent out spare rooms safely and securely.
Smart PropTech in the Home
Smart technologies using Internet of Things (IoT) technologies are becoming increasingly popular and widespread.
Smart meters, smart security and intelligent temperature control in the home, for example are all big attractions for potential renters. To stay ahead of the competition, getting excited about these advancements could benefit you as a landlord.
We’re not saying that every tenant now expects a smart fridge that monitors its contents, but high-speed broadband could be a game changer in today’s rental market.
Handy Mobile Applications for Landlords
Mobile apps are a great way of staying on top of your portfolio. There is now a growing number of mobile apps for landlords designed to save time and make your life easier.
From tracking rent to keeping important documents safe, there’s now an app for everything! There are apps for setting key reminders such as when to update your gas safety certificate, and apps to help advertise your property to the right tenants.
For busy landlords, these organisational miracles are worth getting excited about!
Collecting Rent on Time
It’s become so prevalent now that we can barely remember our lives without it but setting up online direct debits is all thanks to these new technologies!
By setting up regular, online payments with your tenants you can feel reassured that your rent will be delivered to your bank account on time, without having to chase it up.
This process has become even quicker and easier with the development of mobile banking, meaning you can access vital information and make emergency payment transfers on the go.
These technologies are evolving all the time, so who knows how convenient rent collection could be in a few years’ time!
Streamlining Maintenance Work
For landlords with several rental properties in their portfolio, dealing with routine maintenance can feel never ending.
New PropTech technologies can take the hassle out of maintenance by providing convenient apps and systems to make requesting and performing maintenance tasks easier than ever.
For example, a tenant could report a broken boiler on an app, which could then be assessed for level of urgency, then a message could be sent to both you, the landlord, and your chosen engineer or tradesperson. Uploading photos of the repair needed also cuts out the middle step of the landlord or letting agent visiting the property to assess the issue.
360 Virtual Reality Tours
Virtual reality is becoming more prevalent everywhere we look, including within the real estate market.
Virtual tours of properties allow buyers, sellers and renters to view buildings remotely. For example, if you’re a landlord living in a different country to your rental property, a virtual tour allows you to inspect your investment without the hassle and expense of travel.
It’s also a big draw for potential tenants who are often time-poor and can help your property stand out from the crowd in an increasingly saturated market.
No Letting Go provide a nation-wide 360 virtual tour service for all types of properties with a speedy 24-hour turn around. Our tours can be embedded into any compliance report or be used in commercial sales and marketing literature. A VR tour is a great way of providing a thorough inventory for tenants or for inspecting derelict or uninhabited buildings.
Future PropTech 2019
Future PropTech 2019 is described as the world’s number one PropTech event and is a great opportunity for landlords and property professionals to discuss challenges in the industry and collaborate to find solutions.
Through a series of talks, workshops and brand showcases, this event is an easy way of keeping track of current trends and gives you the chance to network with fellow property professionals.
Stay on the Pulse with No Letting Go
Here at No Letting Go, we are dedicated to staying ahead of the latest technology in the property industry.
For our reports and inventory services, we use Kaptur, the latest in property inventory software. It’s designed by property inventory professionals to provide the most efficient way to collect, prepare, report and manage information.
If you’re a landlord or property professional looking to get ahead of the PropTech curve, we could help. We have branches across the UK providing professional, comprehensive inventory services, unbiased compliance reports and property viewings.
Browse our full range of property services here to find out how we could help.
The way you do your taxes is changing.
Say goodbye to piles of paperwork, the tax system is having a digital makeover.
Although changes to routines can be worrying, these alterations are being implemented to make life easier for businesses and self-employed individuals. The proposed scheme to completely digitise the tax system by the end of 2020 aims to make taxes more accurate, efficient and easier to manage.
As a landlord, you’ll need to be aware of these changes and how they affect you, in order to prepare for digital taxes becoming mandatory in April 2019. Here’s everything you need to know about making tax digital for landlords.
What is MTD?
Making Tax Digital, or MTD, is a government scheme to overhaul the tax system to make it completely digital by the end of 2020. This means that from April 2019, VAT tax records and VAT returns will be managed online.
Will MTD Affect Me?
Any VAT-registered business with a taxable turnover above the VAT threshold will have to make these changes.
So, if you are a landlord with an annual rental income of over £10,000, then the MTD changes will apply to you from April 2019. With UK rental prices rising, this is likely to affect most landlords in the UK.
The Making Tax Digital timeline commences on the 1st April 2019, when the changes will become mandatory for all customers, excluding a small number of customers with complex requirements which are being deferred until October 2019. (These types of customers include trusts, non-profits and public sector groups).
The new process will require self-employed individuals and landlords to:
- Use specific software or apps to keep track of their records
- Update HMRC every quarter through a new digital tax account
- Provide a full annual declaration at the end of each year
Further information can be found in the Finance Act, 2017.
The Income Tax Pilot Scheme
The government already has an income tax pilot scheme in place, which self-employed businesses or landlords can use voluntarily.
This scheme allows users to test out the MTD compatible software to store their digital records and send income tax updates to HMRC in place of filing a self assessment tax return.
Voluntary users can choose from a number of software options, sending a summary of income and expenses to HMRC every 3 months and sending a full report at the end of the year. You can even pay bills as you go and ask your accountant or bookkeeper to send the updates for you.
A Closer Look at the HMRC Making Tax Digital Scheme
Many landlords already choose to manage their taxes and accounts digitally through cloud based apps and software programmes.
Once the changes come in, these methods and software applications will need to follow new regulations. HMRC are not building their own software programme but will provide a list of approved software companies, some of which will be free of charge. You will still be able to use your current software system, as long as it complies with the new system.
Users will be required to communicate with HMRC via their Application Programming Interface (API) platform and submit VAT returns using information from these digital records.
This software should be able to calculate your return automatically- saving a whole lot of time and effort.
If you currently use spreadsheets to manage your taxes, it may be worth switching to a software solution now. Although spreadsheets are allowed if they comply with the new regulations, it might cost you more money to produce quarterly reports.
Your digital tax account will allow you to view and access all of your tax information in one handy place online. An agent services account grants accountants or other financial professionals you may employ access to relevant tax details.
Is the MTD Scheme Compulsory for Landlords?
Unless your annual income from your rental property and trade combined is under £10,000 or you are unable to partake in digital programmes due to disability or age, this change is compulsory.
It is expected that late fines will be implemented if you fail to file reports on time once the scheme is established.
MTD for Multiple Properties
If you are a landlord of multiple properties, you will only be required to provide income and expenditure for your investments as a whole.
However, it’s best to keep a record of individual properties to manage and assess the income of various rental properties you may own.
The Benefits of MTD for VAT
According to the latest edition of the tax gap report, there was a gap of around £33 billion in the last tax year! This clearly shows that something isn’t right and suggests that lots of people are making errors when it comes to submitting their records.
By digitising the way tax records are stored and reported to HMRC, the scheme hopes to make tax reporting far more accurate and easier for stakeholders to complete. Sending this information directly to HMRC online will hopefully minimise any mistakes that currently occur during the exchange of information.
For busy landlords who manage multiple properties, it can be hard to stay on track of receipts and invoices. Implementing a digital system which allows you to add information on the go via mobile applications will help prevent taxable claims from escaping.
The digital system will also allow you to see approximately how much tax you owe ‘as you go’ rather than waiting to find out at the end of the tax year.
By seeing all of your reports for individual properties in one place, it will be easier to manage your portfolio and determine which properties generate the best return.
Get Ready for Making Tax Digital with No Letting Go
To sum up, from the beginning of April 2019, landlords will be required to use MTD compatible software to manage their tax records, updating HMRC every 3 months and providing an annual declaration.
Although the end result aims to make managing taxes more efficient, there’s likely to be some teething problems at the start.
To prepare yourself for this shift, it’s best to start early. Make sure your current software is compatible, and if not, plan which system to use. Staying organised across the whole of your property management processes is key to ensuring a smooth transition.
No Letting Go provide professional, accurate property reports to help landlords and property professionals keep track of their investments.
To see the full range of reports we provide, browse the No Letting Go Services section on our website.
There’s been lots of talk over the last few years around the possibility of abolishing letting agent management fees. Now, it seems, it’s come to fruition. On the 12th February, the Tenant Fees Act 2019 was passed and became law.
While good news for tenants, for lettings agents and landlords, this change requires careful planning. Whichever side of the fence you’re on, it’s helpful to have all of the facts.
That’s why we’ve rounded up all the information about the new letting agent fees ban and what it means for landlords, letting agents, property professionals and tenants.
What are Letting Agent Fees For?
Up until now, letting agents have been legally permitted to charge fees for admin, tenant reference checks and other costs.
The responsibilities of letting agents include sourcing tenants, collecting rent, and acting as a means of communication between tenants and landlords.
Typical letting agent fees for tenants should be around £200 to £300 per tenancy, however some groups argue that this figure has been greatly increased by some rogue agencies. For tenants paying higher costs, this ban comes as welcome relief. However, lettings agents who charge reasonable and necessary fees may think otherwise.
The Government Proposal
The effort to get letting agent fees abolished was driven by the government’s aim to make renting more stable for tenants. With 4.5 million households in England now renting, this market is growing rapidly.
While they accepted that many letting agents provide a legitimate and valuable service, the issue of varying admin fees from agency to agency needed to be addressed.
According to the government, banning agency fees will result in greater transparency for tenants, make moving more affordable and allow landlords to ‘shop around’ to find the best letting agent.
The Tenant Fees Act 2019
The proposal to ban letting fees has been in process for a number of years.
The ball started rolling in April 2017, when the government opened up a dialogue to work on the details of the ban. The aims of the ban were to make renting ‘fairer and easier’ for tenants by making costs more transparent and to improve competition in the rental market. This consultation received responses from tenants (50%), lettings agents (32%), landlords (10%) and other stakeholders (8%).
The Tenant Fees Bill draft was then announced in June during the Queen’s speech at the opening of parliament.
In May 2018, housing secretary James Brokenshire MP introduced the bill to parliament, which then passed through the House of Commons in September.
January of this year saw the ban being passed in parliament which was then cemented as law on the 12th of February as the Tenant Fees Act 2019.
What is the Tenant Fee Ban?
The act sets out the new rules and standards for the ban on letting fees;
- Security deposits cannot be more than the cost of five weeks of rent payments. (Unless rent exceeds £500,000 when it’s capped at six weeks)
- The ban includes capping holding deposits to one weeks rent and making them refundable to the tenant
- The fee to change a tenancy will be capped at £50
- If a landlord or letting agent breaches the requirements, a fine of £5000 is payable in the first instance. If a similar offence has been committed within the last five years, it could be deemed a criminal offence. Prosecution or fines of up to £30,000 could be issued
- The ban will be enforced by Trading Standards who will help tenants recover funds that were unlawfully charged
- Landlords will be unable to seize possession of property via Section 21 until they have repaid any unlawful charges
- Letting agent fee transparency should be extended to property sites such as Zoopla and Rightmove
What Can Landlords and Letting Agents Charge Under the New Act?
Under the new act, property agents will only be permitted to charge for the following;
- Early termination of a tenancy at the tenant’s request. This means the costs to the landlord or letting agent to find tenants will be covered
- Council tax, utilities and communication services
- Payment of damages in the case of breached agreements
- Late rent payment
- Replacing keys etc.
Can Letting Agents Still Charge Fees?
Currently, yes. The ban only comes into play on the 1st June 2019. Until the letting agent fees ban date, this practice is still legal.
However, if you’re a landlord or letting agent you might want to start thinking about this change and what plans to put in place.
The Impact of the Ban on Landlords and Agents
One issue that is being raised regarding the ban is the possible impact on landlords. Some are arguing that the ban will result in charges being passed on from letting agents to landlords.
This, they argue, is counterproductive as it means landlords may be forced to raise monthly rent collections in order to make up costs.
The Association of Residential Letting Agents (ARLA) for example, are against the ban and believe that instead of an outright abolishment, fees should be ‘open, transparent and reasonable’. In response to the Government ban, ARLA recommend that upfront fees should be banned, but letting agents should be allowed to spread these costs across the tenancy.
They believe that a blanket ban would ‘put additional pressures on landlords, with fewer tenant checks and a lower quality of service’ and that ‘spreading the cost of these services will allow letting agents to retain current service levels to tenants’.
The Impact on Inventory Management
One suggested outcome of the ban is that letting agents will start to take inventory services ‘in-house’. A guide has been created by TDS, Propertymark and the Association of Independant Inventory Clerks (AIIC) to provide information on avoiding disputes regarding poorly executed inventories and deposit deductions.
Speaking on the report, the AIIC encouraged unbiased, comprehensive reports to protect all parties involved. Similarly, Propertymark highlighted the importance of a thorough inventory and the need for an ‘evidence-based approach’ to protect investments for both landlords and tenants.
Be Prepared with No Letting Go
Whichever stance you take, it‘s best to prepare for the changes early.
If you’re a landlord or letting agent looking to get ahead and prepare for the changes, No Letting Go can help.
We offer reliable, professional property management services to help you stay on top of your responsibilities and protect your investment. From property inventory reports to appraisals and tenant checks, No Letting Go helps protect your property for the long term.
Browse our full range of services here to see how we can help.
High tenant demand means buy to lets can offer a lucrative investment for prospective and professional landlords. However, changing terms to tax relief on buy to let mortgages and rising interest rates require landlords to think carefully about the risks and rewards of entering into one.
If you’re considering a buy to let (BTL) mortgage, it’s important you understand the differences between a BTL mortgage and a residential mortgage and the different types available to you.
Having all the information available is one way to make a secure decision. That’s why we’ve created this guide on buy to let mortgages so you can make the right choice for you.
What is a Buy to Let Mortgage?
Put simply, a buy to let mortgage is a loan specifically designed for landlords looking to buy property to rent.
Buy to let mortgages are viewed as higher risk by lenders, meaning there can be higher fees, deposits and interest rates than residential mortgages.
But don’t let that put you off completely!
Can Anyone Get a Buy to Let Mortgage?
If you’re looking to buy property in order to rent it to other parties, it’s likely you’ll need to make a BTL mortgage application.
There are certain criteria you need to meet in order to be considered.
You are eligible for a BTL mortgage if:
- You are looking to invest in residential property (this includes houses and flats)
- You have the financial stability to repay the mortgage
- You own your own home (either with a previous mortgage or outright)
- You have a good credit rating
- You earn over £25,000 per annum
- You are below a certain age. (Most lenders have stipulations regarding the age you are when your mortgage ends which is usually between 70-75 maximum)
How do Buy to Let Mortgages Work?
BTL mortgages aren’t too different from regular mortgages, which, as a homeowner, you’ll be very familiar with.
There are, however, some variations it’s important to be aware of:
- Fees and interest rates are a lot higher than residential mortgages
- The deposit is around 25% of the property’s value as a minimum
- BTL mortgages tend to be interest only, rather than requiring monthly repayments. This means that the loan is to be paid in full at the end of the mortgage term.
- Most buy to let mortgages are not regulated by the Financial Conduct Authority (FCA). However, if you are letting the property to a family member, this will be considered as a consumer buy to let mortgage and will be subject to the same regulations as a regular residential mortgage.
Types of Buy to Let Mortgages
Buy to let mortgage deals can differ depending on which lender you go with.
Interest rates will all depend on the amount of money you borrow and how much rental income you receive.
It will also be affected by the type of buy to let mortgage you choose:
Tracker BTL Mortgage
If you opt for a tracker mortgage, your monthly repayments are subject to change each month depending on interest rates. This is great news if rates decrease, but not so good if they increase dramatically.
Discounted Variable Mortgage
A discounted variable mortgage is a mortgage deal with an interest rate set around 2% below the SVR (standard variable rate). These deals usually last around two years. The rate is still subject to change dependant on the SVR, but the discount will stay in place for the agreed time.
Multiple Year Fixed Rate Mortgage
A fixed-rate mortgage will keep your repayments low and stable for two to five years. Different mortgage providers offer different deals, so it’s worth shopping around. Just make sure to check what the rate will increase to at the end of the fixed period.
How to Get a Buy to Let Mortgage
Now you know the basics, it’s time to find out how to apply for a BTL mortgage and where to look.
Most large banks loan BTL mortgages, and a mortgage broker can help you decide which mortgage deal makes the most sense for your needs and purposes.
Another place to look when searching for the best mortgage rates is a reputable price comparison website.
Here are some reliable sites to use:
It’s worth checking a few comparison sites to get the bigger picture before making a decision. And don’t forget to read the small print for hidden fees and extra charges!
How Much Can I Borrow?
Your borrowing limit is connected to your rental income. This is called a loan-to-value, or LTV amount, which is worked out as a percentage of the property value. An LTV for BTL mortgages is usually around 90%- 95% rather than 100% for residential mortgages.
This means that your loan is likely to be lower, due to the perceived high risk factor.
Because of this, it’s recommended that you charge around 25%- 30% more for rent than your mortgage payment.
Local property agents or websites can help you get an idea of the amount of rent you can charge in your desired area.
Despite lower borrowing amounts and a larger deposit, the average buy to let purchase price is actually lower than for a residential property.
Tax on Buy to Let Mortgages
Keep in mind that there will be other outgoings to consider when deciding if you can afford a BTL mortgage.
Income tax, capital gains tax, landlord fees, landlord insurance, and letting agent fees all need to be considered.
With changing terms to tax relief on buy to let mortgages it’s important to keep track.
The new regulations mean that landlords can no longer claim all their mortgage interest against income tax on rent. The amount of interest deductible is being reduced by 25% a year until 2020, when it will become a 20% tax credit on the mortgage interest paid.
This change has the potential to raise some landlords up a tax bracket.
Plan for all Circumstances
As you know, applying for a mortgage is a not a decision to be taken lightly as the responsibilities are a long-term commitment.
To protect your financial security, it’s a good idea to have a plan in place for different eventualities.
For example, it’s not uncommon for a rental property to experience void periods in which no rent is coming in. Or, at some point or another, a pipe might burst, or a roof might need urgent repair. As a responsible landlord, you need to be able to provide effective and timely repairs.
To protect yourself from this burden, making a savings plan is vital. Ensure you are saving as much as possible when you have full paying tenants to avoid any stressful situations in the future. This should happen before making an offer on a house.
Tip: Don’t rely on selling the property to pay the mortgage off! If house prices fall, and you don’t have a backup plan, you’re in serious trouble.
Protect Your Buy to Let Investment
While applying for a mortgage is always a risk, once you have all the information at your fingertips, you can make a better informed decision.
One way to help guarantee the safety of your property investment is to ensure you are fulfilling all your duties and requirements as a landlord.
No Letting Go offer a wide range of property management services including professional unbiased inventories, safety assessments and maintenance reports to help you protect your investment.
Browse our full list of services to find out how we can help.
It’s no secret that the private rental sector needs improvements in some areas. A lack of organisation and a minority of poorly maintained, privately rented properties are damaging the sector’s reputation. These negative aspects are often used as fuel to publish damming headlines blaming landlords and property professionals for failures in the industry.
However, a 2018 report by University of York academics, Julie Rugg and David Rhodes named the ‘Evolving Private Rented Sector: Its Contribution and Potential’ is the latest source to argue that the problems in the rental sector are not the fault of landlords and letting agents alone.
We’ve been featured in Letting Agent Today on our support of this new proposal. Here’s how a new rental property ‘MOT’ certificate could improve the private rental sector for both landlords and tenants.
The property MOT is the initiative created by The Lettings Industry Council (TLC). The group is made up of a cross range of letting experts who represent landlords, letting agents, tenants, suppliers and others in the Private Rental Sector and includes government advisors. The groups aim is to improve standards across the industry.
The Report: Improving the Private Rental Sector
The report acknowledged that the private rental sector is currently ‘failing at multiple levels’. Subpar housing conditions, disorganised management and the fact that many tenants and landlords are unsure of their rights and responsibilities has resulted in this situation.
The report recommends introducing a new, annual MOT-style certificate to set a new minimum standard for rented housing conditions.
The New Property Licence
The suggested scheme would ensure a property is licensed before being let. Landlords would be required to apply for a licence so that an independent property inspector can review the property.
This service would be performed by property professionals, trained to assess whether a property is fit to let. Once affirmed, all licensed properties would be added to a national database connected to the landlords phone number, while unlicensed properties would be subject to legal action if let.
For HMO properties (houses in multiple occupation), a slightly amended certificate would be required, taking into consideration the extra safety checks needed.
If introduced, mortgage lenders would have to check the status of a property before loaning money and it would be illegal for letting agents to manage an unlicensed property.
The authors believe that, alongside other revisions to the industry, this ‘MOT’ could improve conditions for renters. They also hope that the new scheme would free up time and resources for local authorities to combat criminal activities and other pressing issues in the industry.
Benefits for Private Rental Landlords
One benefit of this proposed scheme, is that it would integrate existing health and safety certificates for rental properties. Gas and electric checks and the energy performance certificate (EPC) would be added to with a basic standards for habitation assessment.
This goes hand in hand with the recent 2018 Homes (Fitness for Habitation) Bill which requires all rental properties to be safe and free of health risks for tenants. This act makes any landlords not meeting these standards liable by giving tenants the power to take legal action.
Integrating these property licenses has the potential to make things simpler and more streamlined for landlords.
Reaction from Property Professionals
The report has been praised by property professionals for moving away from the culture of blame often placed on landlords and other property agents in the media. Instead, finding sensible solutions to current problems and improving systems for both landlords and tenants could help to transform the industry as a whole.
No Letting Go’s founder and chief executive, Nick Lyons spoke to Letting Agent Today on why he believes that creating an MOT certificate system could raise the standard of homes in the private rental industry;
“An MOT report, ensuring a property meets a minimum standard, alongside an independently and professionally compiled inventory would ensure that everything about a property’s condition and contents is suitably documented at the start of a tenancy”.
It’s not just No Letting Go championing this idea. ARLA Propertymark, the professional body for raising standards in residential lettings, agrees that this certificate could be a simple and practical solution to current issues.
Keeping on Top of Your Rental Properties
If you’re a landlord who’s worried about potential changes to your responsibilities and feel overwhelmed with licencing applications, why not delegate some of the work?
No Letting Go are one of the largest providers of inventory services in the UK. We provide independent property reports, including check in/check out services and safety checks to help give landlords peace of mind. Find out more about our services here.
Making the choice to buy a property is probably the biggest financial decision you’ll ever make. Definitely not one to be taken lightly.
You’ve probably been told that buying a property is the way forward in terms of financial stability and you may feel under pressure to buy your own home to make that first step onto the property ladder. But is it really the best option for everyone?
We believe there are pros and cons to buying a house and that renting a property can be a smarter option for some.
That’s why we’ve put together this guide, so you can decide, once and for all; is it better to rent or buy?
The Benefits of Renting
Despite what older generations might tell you, there are many advantages to renting in today’s world.
Consider these before you dismiss renting as an option:
It Pays to Rent
The costs of buying a house can seem never ending. Hidden extra charges like paying for surveys, stamp duty and removal costs are enough to induce a panic attack. For rental properties, the upfront costs are pretty standard; a secure deposit, a month’s rent and any Letting Agency fees are all you’ll need to pay.
Once you’re in, the costs don’t stop when you own your own home. Recurring expenses like homeowners insurance and property taxes are just the start. Maintenance and repairs can really add up too. A dodgy boiler giving up in the middle of the night mid-November or a leaky pipe creating a downpour in your bedroom is all down to you to fix. If you’ve ever had to track down a tradesperson out of hours you’ll understand the pain.
With renting, these responsibilities lie in the hands of your landlord. Landlords have a legal responsibility to provide a safe, liveable home that is well maintained. This means the landlord foots the bill for any essential repairs.
Skip the Hefty Deposit
For first-time buyers, it’s becoming increasingly difficult to buy.
Soaring house prices have resulted in eye watering deposits that seem unattainable for lots of us. Finding somewhere to buy within a reasonable commute to work is almost out of the question, with people being forced to live in less desirable areas.
Although rent prices increase in sought-after locations, it’s far less drastic.
Flexible Housing for Flexible Living
In today’s world of employment, people switch jobs every few years and no one is quite sure what’s around the corner. If work decides to transfer you to the opposite end of the country or, worst case scenario, you lose your job, you could be left with mounting mortgage repayments. Selling is stressful, costly and always takes longer than you expect.
The pros of renting a house mean it’s easier to move quickly. Usually, tenancy agreements have a break cause and you could move somewhere new within a month with minimal fuss.
Scared of Commitment?
If you’re a commitment-phobe in your relationships, you might not want to be tied down by a property. Renting a home is the more flexible option, allowing you to jump ship if things get boring.
Renting could also be the intelligent choice if you’re moving in with a new partner. There’s nothing like a few months of living together to test a relationship. Discovering your partner’s unsavoury living habits could swiftly make you think twice about your happily-ever-after home. Toenail clippings behind the sofa or late night video game sessions could be the final straw.
The advantages of renting a house mean you can test each other out short-term, without the added pressure of mortgage repayments.
Stay Safe and Secure
As we mentioned earlier, landlords have obligations to fulfil when it comes to property maintenance. These responsibilities stretch further than fixing the odd appliance.
Safety standards have to be adhered to, such as gas, electrical and fire safety checks. These regulations are all designed to protect tenants.
Avoid Rising Interest Rates
Rising interest rates mean your mortgage repayments go up. If the budget is already tight, this could have grave consequences on your finances and living situation.
Equally, property values are famously volatile, and if the value of your property goes down it will be more difficult to sell later down the line.
Renting sidesteps these stresses.
The Cons of Renting a House
As with everything, there are some negative aspects to renting. It really depends on the stage of your life you’re at and what will benefit you now as well as in the long run.
Think about these issues before making your final decision:
Sacrifice the Freedom to Decorate
One downside with renting is that you’re more restricted when it comes to redecorating and making structural changes to your home. Alterations need to be ok’d by the landlord before they go ahead, sometimes even down to hanging a picture frame!
This isn’t a problem if DIY isn’t really your thing, and most landlords are reasonable when it comes to home improvements. You are enhancing their property after all.
If you have a pet you’ll need to make this clear at the beginning as living with pets isn’t allowed in all rental properties. It is possible to rent with pets, just make it a priority for your search.
Be at the Mercy of Your Landlord
One thing that can put people off renting is the idea of being at the mercy of their landlord. If they choose, landlords can raise the rent and even decide to kick you out.
Although this is a possibility, it’s a rare one. Landlords have to compete with the rest of the property market and if they charge extortionate prices they risk not filling properties. You also have a tenancy contract which will stipulate how much notice a landlord can give you if they decide to make changes.
Save Money in the Long Run?
Many people claim there is a long-term, financial benefit to buying. Once you’ve finally paid off your mortgage, they say, you will be able to live rent free.
But, how long will that take?
Mortgages that take up to 35 years to repay are not uncommon. That’s a long time to commit to.
In the short-term at least, it’s cheaper to rent. Rent is usually less than the monthly mortgage repayments and the original deposit is just a fraction of the cost of buying a house.
The Final Say
To sum up, it really depends on your specific situation as to whether it’s best to buy or rent.
Some things to think about before you buy are;
- Before making an offer on a house – can you afford the mortgage?
- Can you afford the monthly repayments (taking possible rises into consideration)?
- Are you planning to stay in the property for a significant length of time?
If it’s flexibility, minimal upfront costs and the security of knowing your landlord is there to cover maintenance you’re after, renting is the best option.
On team rent? If you let out your home, make the process as smooth as possible by taking advantage of No Letting Go’s inventory services. This way, you won’t get caught out with unexpected charges as all the information about the property’s condition is independently evaluated and stored securely. Whether you’re a landlord or letting agent, find out how we can help with our professional, unbiased property reports.
If you fancy turning your hand to property investment but unsure where to start, we’ve got it covered. We’ve taken a look at the best place to invest in property in the UK. To work this out, we’ve looked at the average rental yield all UK cities and ranked them accordingly. We’ve worked this out by looking at the average property value and average annual rent in each city. Where does your city rank?
Ranked from bottom to top by average rental yield percentage, here are the results…
68. St Albans – 2.76%
Average property price: £581,041
Average rent: £1,336 pcm
67. Truro – 2.85%
Average property price: £320,611
Average rent: £761 pcm
66. Worcester – 2.87%
Average property price: £260,039
Average rent: £623 pcm
65. Chelmsford – 3.04%
Average property price: £387,413
Average rent: £982 pcm
64. Salisbury – 3.08%
Average property price: £341,338
Average rent: £876 pcm
63. St Asaph – 3.1%
Average property price: £225,104
Average rent: £581 pcm
62. Hereford – 3.14%
Average property price: £249,947
Average rent: £655 pcm
61. Ripon – 3.2%
Average property price: £290,495
Average rent: £774 pcm
60. Lichfield – 3.2%
Average property price: £291,353
Average rent: £777 pcm
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59. Wells – 3.31%
Average property price: £308,536
Average rent: £850 pcm
58. Cambridge – 3.34%
Average property price: £455,104
Average rent: £1,268 pcm
57. Winchester – 3.36%
Average property price: £548,755
Average rent: £1,537 pcm
56. Chichester – 3.4%
Average property price: £428,867
Average rent: £1,214 pcm
55. Wolverhampton – 3.44%
Average property price: £188,146
Average rent: £539 pcm
54. Bath – 3.44%
Average property price: £444,257
Average rent: £1,274 pcm
53. Gloucester – 3.47%
Average property price: £230,997
Average rent: £668 pcm
52. Chester – 3.5%
Average property price: £254,681
Average rent: £742 pcm
51. Perth – 3.5%
Average property price: £202,679
Average rent: £591 pcm
50. Exeter – 3.52%
Average property price: £293,069
Average rent: £860 pcm
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49. York – 3.55%
Average property price: £282,874
Average rent: £837 pcm
48. St David’s – 3.56%
Average property price: £234,104
Average rent: £695 pcm
47. Peterborough – 3.7%
Average property price: £217,668
Average rent: £672 pcm
46. Carlisle – 3.73%
Average property price: £157,070
Average rent: £488 pcm
45. Ely – 3.8%
Average property price: £295,045
Average rent: £935 pcm
44. Norwich – 3.9%
Average property price: £265,871
Average rent: £864 pcm
43. Leicester – 4.01%
Average property price: £216,421
Average rent: £724 pcm
42. Bristol – 4.03%
Average property price: £314,629
Average rent: £1,057 pcm
41. Canterbury – 4.07%
Average property price: £335,782
Average rent: £1,138 pcm
40. Lincoln – 4.07%
Average property price: £192,423
Average rent: £653 pcm
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39. Wakefield – 4.08%
Average property price: £177,810
Average rent: £605 pcm
38. Derby – 4.12%
Average property price: £194,951
Average rent: £669 pcm
37. Lancaster – 4.25%
Average property price: £191,729
Average rent: £679 pcm
36. Dundee – 4.28%
Average rental price: £156,781
Average rent: £559 pcm
35. Southampton – 4.36%
Average rental price: £289,546
Average rent: £1,053 pcm
34. Hull – 4.43%
Average rental price: £133,306
Average rent: £492 pcm
33. Newry – 4.44%
Average rental price: £146,353
Average rent: £542 pcm
32. Oxford – 4.46%
Average property price: £503,570
Average rent: £1,870 pcm
31. Stoke-on-Trent – 4.53%
Average property price: £143,358
Average rent: £541 pcm
30. Bradford – 4.53%
Average property price: £129,444
Average rent: £489 pcm
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29. Aberdeen – 4.58%
Average property price: £197,352
Average rent: £753 pcm
28. Preston – 4.6%
Average property price: £179,405
Average rent: £687 pcm
27. Inverness – 4.68%
Average property price: £177,736
Average rent: £693 pcm
26. Newport – 4.71%
Average property price: £165,970
Average rent: £651 pcm
25. Stirling – 4.78%
Average property price: £194,439
Average rent: £775 pcm
24. Brighton & Hove – 4.79%
Average property price: £385,220
Average rent: £1,537 pcm
23. London – 4.8%
Average property price: £672,390
Average rent: £2,692 pcm
22. Newcastle – 4.81%
Average property price: £203,524
Average rent: £816 pcm
21. Sheffield – 4.91%
Average property price: £187,360
Average rent: £767 pcm
20. Sunderland – 5.02%
Average property price: £139,518
Average rent: £584 pcm
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19. Derry – 5.12%
Average property price: £110,884
Average rent: £473 pcm
18. Glasgow – 5.21%
Average property price: £175,623
Average rent: £762 pcm
17. Lisburn – 5.36%
Average property price: £143,435
Average rent: £641 pcm
16. Plymouth – 5.47%
Average property price: £200,655
Average rent: £914 pcm
15. Cardiff – 5.6%
Average property price: £233,833
Average rent: £1,092 pcm
14. Belfast – 5.72%
Average property price: £153,310
Average rent: £731 pcm
13. Swansea – 5.74%
Average property price: £167,147
Average rent: £799 pcm
12. Liverpool – 5.78%
Average property price: £164,838
Average rent: £794 pcm
11. Portsmouth – 5.81%
Average property price: £227,041
Average rent: £1,100 pcm
10. Edinburgh – 5.89%
Coming in at 10th place is Scotland’s capital Edinburgh. The city is a highly desirable place to live and is a huge cultural hub north of the border. Having said this, property prices are relatively low while rent remains high. This means, Edinburgh is a great place for any landlord to build a portfolio.
Average property price: £268,989
Average rent: £1,320 pcm
9. Nottingham – 5.97%
With a popular university paired with high standard of living, property investment in Nottingham could be a money maker. With a 5.97% average rental yield, this is a serious consideration for anyone looking to make money.
Average property price: £188,609
Average rent: £939 pcm
8. Birmingham – 6.27%
Proclaimed to be the second city in the UK, Birmingham was guaranteed to feature high in this list. The property prices are in line with much of the midlands while rent is high. The popular university also prevents an opportunity for those considering student lets.
Average property price: £188,235
Average rent: £984 pcm
7. Armagh – 6.42%
The Northern Irish city is claimed to be the fifth-least-populous city in the UK. Maybe that goes some way to explaining the low property prices. Rent, at least, is in line with the surrounding area.
Average property price: £105,815
Average rent: £566 pcm
6. Manchester – 6.5%
Though Birmingham takes the title of Britain’s second city, Manchester seems to be stealing the attention. It’s a highly favourable place to live, especially among the younger generations who seek a buzzy metropolitan area. This has led to rent remaining high while property prices sit in line with much of the north of England.
Average property price: £175,872
Average rent: £952 pcm
5. Coventry – 6.64%
Coventry storms ahead into 5th position in our list. As the ninth largest city in the UK, it’s no surprise it features high. The city is the only Midlands spot to break the £1,000 average rent mark.
Average property price: £195,255
Average rent: £1,080 pcm
4. Durham – 6.71%
At the business end of the list we find north-eastern city of Durham. The location is renowned for its beauty and highly respected university. There are plenty of reasons why people are attracted to the city, an alluring potential for investment.
Average property price: £159,146
Average rent: £890 pcm
3. Leeds – 6.89%
Another city that people are naturally driven to. Leeds is metropolitan city renowned for its shopping, nightlife and culture. If you consider the high rent prices and relatively low property prices, you may find yourself building a portfolio here.
Average property price: £204,644
Average rent: £1,175 pcm
2. Salford – 7.53%
If you’re looking to invest in Manchester, you may do better by looking to neighbouring Salford. The city offers similar average rent but with a reduction in average property prices, a win-win!
Average property price: £156,118
Average rent: £979 pcm
1. Bangor – 9.42%
The best place to invest in property in the UK is Bangor – an exceptional opportunity for anyone considering property investment. The house prices are aligned with the local area and pretty low. The average rent is considerably higher, exceeding £1,300 pcm.
Average property price: £169,148
Average rent: £1,328 pcm
All figures accurate on date of publish.
If you’re considering becoming a landlord, don’t get caught up in messy deposit disputes. We can help. Find out how No Letting Go’s inventory services can remove the hassle from the situation.