Thinking of investing in Build to Rent but not sure how to go about it or if it’s right for you? Our guide on why to invest in Build to Rent explores the risks and rewards of getting involved in the sector.

Build to Rent developments are growing across the UK thanks to higher demand for quality, purpose-built rental accommodation among young professionals and the over 50s. This burgeoning sector has great potential for property investors and commercial landlords, as long as you do it right.

 

What is Build to Rent?

Build to Rent, or (BTR) describes the process by which residential properties are purpose built for the private rental sector. In most cases, this is done by large property development companies, investors and commercial landlords.

Build to Rent developments commonly contain 50 homes or more, all managed by one landlord. They often feature desirable perks such as in-house gyms, entertainment facilities and sophisticated security systems.

 

The Build to Rent Trend

The Build to Rent sector in the UK is on the rise. According to property experts, Knight Frank, £50 billion will be invested into the sector by 2020 to accommodate for the growing demand in the private rented sector.

We’re now well aware that the rental sector is growing. Rising house prices and new working trends have resulted in a wider pool of tenants looking for suitable, long-term rental properties.

The demise of home ownership has resulted in a slightly older, professional tenant group looking for quality rented accommodation, complete with all of the modern conveniences.

 

How Does Build to Rent Work?

Typically, a Build to Rent development is owned by a large institution, such as a bank or pensions company and managed by a lettings agency.

Funding comes from investors keen to take advantage of reliable rental returns and long term growth. Some Build to Rent Schemes are also being supported by the Government to help with the building process and supporting infrastructure.

The main players in the Build to Rent process are;

  • Build to Rent investors
  • Build to Rent developers
  • Build to Rent letting agents
  • Commercial landlords

To invest in Build to Rent property, there are a few routes to go down, one of the easiest being through one of the large private rental developers.

 

The Benefits of Build to Rent Properties

According to Savills, Build to Rent investment came to £2.6 billion in 2018, suggesting that it can be a lucrative option for commercial landlords. There are many exciting opportunities for landlords investing in Build to Rent. Here are some of the benefits;

  • Longer tenancies are common (3 years +)
  • High tenant demand
  • Higher rent rates (around 11% higher than standard rental accommodation)
  • Reliable rental income and likely growth
  • Landlords retain control over their investment
  • Long term investment rewards

There are also many benefits for tenants which will make advertising and filling vacant rental properties much easier;

  • Greater choice of housing
  • Quality, purpose-built buildings with special amenities such as gyms and entertainment facilities
  • Access to convenient services such as security, laundry and concierge
  • Modern, sustainable buildings
  • Bills usually included
  • Furnished
  • On-site management
  • Encourages regeneration in surrounding areas

 

The Risks of Build to Rent

With all investment comes potential risk. Before going ahead, it’s important to understand what these risks are and how to manage them.

 

Construction Risks

Construction is a risky business, and all sorts can go wrong or take longer than planned, leading to greater financial costs.

 

Planning Permission Issues

As a relatively new phenomenon, planning permission for Build to Rent can take longer, resulting in growing costs and a reduction of rental income.

 

Void Periods

As the landlord, you may experience delays in receiving the full rental income as the development fills up. To avoid long void periods, you could implement a tenant sign-up scheme while the building is still in progress. Alternatively, you could plan the development in stages to ensure some rental income is coming in throughout the process.

 

Drawbacks for Tenants

It’s also important to consider the disadvantages for tenants when it comes to Build to Rent, as this will help you determine your target tenant and mitigate any risks.

Some drawbacks for tenants include;

  • Many Build to Rent developments target elderly tenants or young professionals and may not appeal to families or lower income renters
  • This type of accommodation can be more expensive for tenants

 

Homes UK Event

From incorporating affordable housing into your Build to Rent project, to attracting institutional investment, Homes UK: The Future of Living will be answering the pressing questions in the sector today.

Taking place at Excel in London 27-28 November 2019, the event is a great place to meet important players in the industry.

 

Protect Your Investment

Keen to take advantage of this fast growing sector? Here at No Letting Go, we supply a specially designed range of Build to Rent services to ensure compliant reporting, no matter the size of the development.

We offer;

  • Inventory management
  • Property visits
  • 360 virtual property photography for use in marketing, reporting and Build to Rent projects
  • Check in and right to rent
  • Legionella risk assessment and water testing
  • Central account management for national, corporate or large regional clients
  • Fully insured, qualified and professional clerks, surveyors and inspectors
  • 24 hour turnaround for reports

With our national and local services you get consistency, accuracy and efficiency delivered by our 65 offices across the UK.

Find our full list of Build to Rent services here.

Finding a reliable removal company can be a challenge, and tenants often turn to their landlord or letting agent for advice at the end of a tenancy.

Providing quality recommendations for trusted tradespeople and services builds trust with tenants and means they’re more likely to pass on your details to friends and family.

In order to provide your tenants with reputable removals services, we explore what to look for when searching for a removal company and the benefits of using this service.

 

Do I Need a Removals Company?

If your tenant asks this question at the end of a tenancy, the answer is usually yes. Most people gather lots of belongings, even over the space of a year. When packing and transporting expensive items of furniture and fragile items, it can pay to leave it to the professionals.

Unless the property is very small, they are renting one room or rent a fully furnished property, it’s likely a professional removal service will be beneficial.

A professional removal service offers tenants;

  • Time saving
  • Safer packing and transportation of fragile items
  • More van space

A professional removal service is even more important for families with lots of belongings and older tenants who may struggle to pack up their home.

 

How Do I Choose a Removal Company?

We’ve broken down finding the right removal company into a few simple steps;

 

Location

The first consideration is location. Removal companies based locally to your rental properties are likely to be cheaper than those that have further to travel.

These companies could become part of a portfolio of recommended tradespeople and services you can offer to your tenants.

 

Comparison Sites

One of the first places to go for local removal companies is a comparison site. Here, you will find a list of trusted traders and you will be able to filter your search results to find relevant companies more quickly.

Searching by price point, location and reviews can help narrow down your search.

 

Removal Quotes

The next step once you have found a few possible candidates is to check removal quotes. Most tenants will be searching for the most affordable option, so if you can recommend a reasonable company they should be happy customers.

Try to get at least three different quotes for the same move, with each cost broken down into insurance, packing, hourly rate, mileage and storage.

 

Customer Reviews

We’ve all heard disaster stories of rogue movers damaging expensive furniture or losing sentimental items, and tenants won’t be happy if your recommendation goes wrong.

Once you have narrowed down the search further, it’s time to check the customer reviews. Sometimes, companies are cheap for a reason, and you should be able to weed out any unreliable movers from the reviews online.

 

How do I Find a Reputable Moving Company?

We’ve got some top tips on how to spot a quality removal company you can rely on;

 

Ask for Recommendations

Word of mouth can be a powerful tool for finding reliable tradespeople and services.

Have any of your friends or family moved home recently? They may have their own recommendations to offer. It’s also worth checking which removal companies local letting agents recommend.

 

Have They Been Regulated?

An easy way to determine whether a removal firm is trustworthy, is to check whether they are a member of any regulatory boards or associations.

Check if the company is a member of The British Association of Removers (BAR), a regulatory body which ensures professional excellence. With lists of residential and commercial movers, all companies listed have been tested to industry standards.

 

Questions to Ask the Movers

Before you recommend a removal company to your tenant, ask these questions first;

  • How long has the company been operating?
  • Do you offer pre move surveys?
  • Do you offer storage facilities?
  • Do your quotes include insurance?
  • Is a packing service included?
  • Is parking on moving day included?
  • What is your delay policy?
  • Do you ask for any additional removal costs?

Having all the important information to hand is of great use for busy tenants and will make a great impression long term.

 

How Much Notice Do Removal Companies Need?

The process of getting an initial quote for moving house, the subsequent survey, finding an available date and getting all of the documents in order can take several weeks. It’s a good idea to remind tenants of this as it comes nearer to the end of their tenancy so they can be fully prepared on moving day.

 

What is the Average Cost of Removals?

The cost of using a professional removals company is dependent on several factors;

  • The number and size of the items being transported
  • The distance between properties
  • Size of the removals team on the day
  • Whether it includes packing and packing materials

 

The Movers and Storers Show

Another way to find reputable moving companies is to attend an industry event such as the Movers and Storers Show.

This year, the show is taking place in Coventry, 19th-20th November and is a convenient place to find trusted partners.

 

The Importance of Trusted Property Partners

Reputation is important in the lettings industry. If a tenant has a positive moving experience thanks to your recommendation, they are more likely to consider your services in the future and give positive recommendations to friends and family.

That goes for all services you use to manage the rental properties in your portfolio.

Here at No Letting Go, we offer a range of professional services to help landlords and letting agents manage their portfolios and stay on top of their responsibilities.

From property inventory to property visits, our services are designed to protect your investment for the long term.

Browse our full list of property inventory services here to find out how we can help.

Anyone who has worked within the lettings industry will understand the importance of a thorough inventory for rental properties.

And when landlords skip this vital step, major issues can occur. If you’re left facing serious damage at the end of a tenancy without the proper reports, you may lose out on thousands of pounds.

We explore the power of inventories by highlighting a recent high-profile case featuring a former pop star and £70,000 worth of damage.

 

Do I Need An Inventory?

Yes, as a landlord or letting agent, it is important to have an inventory report in place to provide the evidence needed if you need to make a claim on the deposit at the end of the tenancy.

Without a detailed inventory, you could be left having to repair damage out of your own pocket. We’ve created a simple guide on the key components to include and why they’re necessary;

 

Property Management Inventory Checklist

An inventory report must include the following key components;

  • A record of meter readings and keys provided
  • The condition and cleanliness of each room, including appliances, fixtures and fittings
  • A record of the condition of the garden, including any damage
  • A signature from the tenant confirming they agree with the contents of the report
  • A record of the condition of the mattresses if fully furnished
  • Date & time stamped photos of the property and its contents

It must also include essential safety points;

  • A record of furniture and furnishing fire safety labels
  • Evidence that the Smoke and CO alarms comply with legislation (working order & correct placement)
  • A record of loose or frayed carpets, cracked glass or windows, missing keys and inoperable locks

 

Check Out Report

In addition to the initial inventory report and schedule of condition that takes place when a tenant moves into a rental property, you will also need a check out report when they move out at the end of the tenancy.

Following the final inspection, the check out report should;

  • Include a detailed record of the condition of the property
  • Clearly show how the property has changed throughout the tenancy (in combination with the initial check in report)
  • Include recommended actions for landlords and tenants

This report provides a vital benchmark to help assess any changes to the property from the start of the tenancy to the end.

If any deposit disputes arise, these reports should provide clear evidence to help landlords get a fair return on any losses or repairs required.

 

Top Reasons for Tenancy Deposit Disputes

Some of the main reason’s disputes occur include;

  • Cleaning 54%
  • Damage 49%
  • Decoration 31%
  • Rent 20%
  • Gardening 16%

 

Dealing with Deposit Disputes

The security deposit taken at the start of a tenancy is considered the tenant’s money. This means that it can be tricky for landlords to withhold the deposit in response to damage or loss without significant evidence.

You will need to prove there is damage to your rental property above normal wear and tear in order to claim on the deposit.

That’s why poorly compiled inventory reports are one of the most common reasons landlords lose disputes.

Tip: Always enter the deposit into a tenancy deposit protection scheme as this is a legally required step!

 

Celebrity Rental Drama: The Power of Inventories

To demonstrate our point, we’ve got a high profile case study in which a property rental disaster was averted thanks to comprehensive inventory reports.

Former En-Dubz star and X Factor Judge, Tulisa Contostavlos was recently ordered to pay over £70,000 worth in damage to the landlord of her former luxury rental property.

Reported damage to the luxury North London flat included a smashed sink, cigarette burns, stains and doors ripped from hinges. Despite arguing that the damage was normal wear and tear, she was ordered to pay compensation, interest and legal costs to her former landlord.

Key to this case was the presence of a thorough and professional inventory and check-out report.

Clearly, a high rental value is no protection against severe damage, so no matter which end of the market you’re positioned in, covering your back is essential if you want to recover your costs.

Looking for help managing your portfolio of rental properties in London? Find a list of our No Letting Go London offices.

 

What is Fair Wear and Tear?

It can be problematic working out what is considered fair wear and tear as it differs case by case. Some examples of fair wear and tear include;

  • Small scuff marks on walls
  • Naturally worn down carpets
  • Frayed fabrics
  • Faded curtains
  • Carpet indentations

However, when we talk about damage this could include;

  • Broken locks or doors
  • Burn marks or large carpet stains
  • Holes in the walls
  • Broken windows or furniture
  • Poorly painted walls

One of the easiest ways to determine the difference is by commissioning a professional inventory clerk to visit the property and make a detailed report, including photographic imagery at the start of the tenancy.

 

How To Protect Your Rental Property from Damage

There are a few more steps you can take to protect your rental property;

Regular Property Inspections

To avoid a similar situation, making quarterly inspections of the property can help encourage tenants to practice good property maintenance.

Target Long Term Tenants

In addition, targeting long-term tenants who are more likely to treat the property as their home will help to avoid intentional damage.

Keep it Simple

Keep decoration simple and ensure your property is thoroughly clean at the start of the tenancy to avoid any future disputes.

 

Avoid the Risks with A Professional Inventory Service

You’ve heard the warning, now it’s time to cover your back. One of the easiest ways to protect your investment as a landlord or letting agent is to commission a professional inventory company to undertake comprehensive inventory reports and checks.

Our independent inventory clerks across the country are experienced at providing essential reports, checks and visits to help you stay protected from move in date up until the end of the tenancy agreement.

To find out how we could help, browse our list of professional property inventory services to get started.

We are delighted to have been shortlisted for the Best Supplier of the Year category with the prestigious Negotiator Awards.

These property awards help customers narrow down the search for the most reliable lettings and property services companies, while bringing well deserved recognition to hardworking property professionals.

Find out what the awards are all about and why No Letting Go has been nominated.

 

The Negotiator Awards

The Negotiator Awards provide a platform to celebrate the best of UK estate and lettings agencies in the residential property industry.

Since 2008, these awards have been recognising talent at one of the most lavish property parties of the year. Held at the Grosvenor House Hotel on Park Lane, London a black tie dinner is finished off with celebrity entertainment. No fees are accepted for entries, making the awards an inclusive and fair celebration of the industry.

Categories include; Community Champion, Marketing Campaign of the Year and Employer of the Year.

This year’s awards ceremony takes place on 29th November, 2019 where the winners will be revealed. With last year’s proceedings seen over by comedian Julian Clary, we’re excited to see who’s presenting the 2019 awards!

 

Supplier of the Year

We’re very pleased to be included in the shortlist for Supplier of the Year: Products and Services.

This is a competitive category, with a plethora of respected companies providing products and services to the lettings industry.

Last year we took home the silver award for this category, with Viewber taking gold, and Tenant Shop achieving bronze.

 

 

Our Professional Services

So, why are we being nominated for our delivery of products and services?

Whether you’re a landlord, letting agent, property professional or housing association, our teams of clerks provide a reliable, professional service to help you save time and protect your investment.

Here at No Letting Go, we offer;

Our No Letting Branches are spread across the UK, providing specific areas with tailored advice and services.

 

No Letting Go’s Accolades

Our teams work hard to provide their customers with quality services that put the customer’s needs at the centre.

Thanks to their dedication, we have been lucky enough to receive the following awards,

  • Bronze award for Supplier of the Year in The Times and Sunday Times
  • Lettings Agency of the Year 2016 Awards
  • Rachel Farr of our Bath branch was a finalist in the Woman Franchisee 2017 EWIF Awards
  • Best Inventory Supplier 2009

In addition, we’re also accredited by Safe Contractor, the British Franchise Association (BFA), Property Redress Scheme (PRS) and are regulated by Association of Residential Letting Agents (ARLA:PropertyMark)

 

How Can We Help?

Whilst we are crossing our fingers to win an award in November, we are proud to have been shortlisted alongside some fantastic brands in this category, and it is testimony to the high quality of services provided by our 65 offices around the country.

If you’re looking for unbiased property reporting and inventory services, browse our full list of property services to find out how we could help.

Subletting is surprisingly common and can offer benefits for both landlords and tenants. But what counts as subletting? And what do landlords need to know about the risks?

We explore what subletting is and what you can do as a landlord to mitigate the risks.

 

What is Considered Subletting?

Subletting is when a tenant decides to rent out either a room or whole property to a third party. For example, if a tenant decides to go travelling for an extended period, they might try to let their room out to another tenant to pay their rent. Other reasons could include;

  • Change in income
  • If they need to relocate before the end of a contract
  • If another tenant decides to move out before the end of the tenancy and they need to fill the space

To be a sublet, the original, existing tenant needs to give exclusive access of at least one area of the property to the subtenant. The subtenant will not pay rent directly to the landlord but to the original tenant.

 

Is Subletting Illegal?

In most cases, subletting is legal if the tenant obtains the landlords permission to let out the rental property.

However, if the tenant sublets without written permission, they could come into legal difficulties.

 

Can A Landlord Refuse A Sublet?

This all depends on what it says in the tenancy agreement. If there is a section in the agreement that says a tenant can ask the landlord to sublet, landlords will need to have a valid reason for refusal.

However, if there is no mention of subletting in the tenancy agreement, as a landlord, you can refuse more easily.

It’s worth noting that in the case of fixed term tenancies, the tenant may still be able to sublet without consent if there is no mention in the agreement. That’s why it’s important to be clear on the terms of your agreement from the get-go.

Not keen on the idea of allowing a tenant to sublet? There are a few steps you can take to ensure it doesn’t happen;

  • Include a section in the tenancy agreement prohibiting subletting
  • Arrange regular property inspections to help prevent unwanted subletting. The professional carrying out the inspection will usually be able to tell if something is awry. It will also indicate to your tenants that you aren’t complacent as a landlord.
  • Try to develop strong relationships with your tenants so they come to you first if they are having any difficulties making the rent.

 

Illegal Subletting

If a tenant decides to go ahead and sublet without permission, there are two main circumstances that most commonly occur;

The tenant rents out a room in the property whilst still living at the address.

This is the most common situation, and often happens when flatmates move out unexpectedly.

In this situation, think carefully about how you want to proceed. If the new subtenant has caused no issues and the rent is paid on time, it can sometimes be advantageous to allow them to continue living at the property. If this is the case, draw up an agreement to stay protected. Don’t accept any payment until you have a proper tenancy agreement in place.

The tenant rents out several or all the rooms in the rental property whilst living at a different address.

This could have serious consequences for you as the landlord. If these subletting tenants report issues to the original tenant who they assume is the landlord, property maintenance issues may go unresolved and you start to lose control of your property.

 

What Happens If Your Tenant Sublets Without Permission?

If you discover your tenant is subletting without your permission, there are a few steps you can take;

  • Talk to your original tenant first to find a solution
  • If the tenant persists subletting, sub-tenants should be informed, and either be asked to vacate the property or draw up a new tenancy agreement for them
  • If all else fails and the subtenant refuses to vacate, you may need to begin the eviction process

 

What Are The Risks Of Subletting?

If a tenant decides to sublet their room, there are a number of risks you need to be aware of;

Insurance and Mortgage

Some insurance and mortgage providers don’t allow subletting and ignoring this could lead to voiding your contract. It’s vital you avoid this at all costs by checking your agreement before allowing a sublet.

End of The Tenancy

If your original tenant decides to move out, but their subtenant is still living in your rental property, you may come up against issues. Evicting a tenant without a tenancy agreement can get complicated.

 

How Do You Sublet Safely? Tips for Landlords

Subletting doesn’t always spell disaster. In fact, it can be profitable for both landlord and tenant, solving common issues such as change of circumstance.

If you do decide to grant your tenant permission to sublet, here’s a few steps you can take to ensure your investment stays protected;

  • Ensure you are clear on the contents of the tenancy agreement and what it says about subletting. If there is no mention, you may want to add a clause to be on the safe side.
  • Spend time on tenant referencing to ensure you end up with reliable, trustworthy tenants.
  • Spend time getting to know your tenants and making a good impression. This way, they are more likely to come to you first if their circumstances change.
  • Carry out regular property inspections.

 

Protect Your Investment with No Letting Go

If you need a helping hand protecting your investment, we have teams of experienced inventory clerks across the country ready to support you.

We can provide regular property visits, every 3-4 months to ensure your property is being well maintained and tenants are fulfilling their contractual obligations.

In addition, a comprehensive inventory report is one of the best ways to protect your investment in the long term.

Interested in hearing more? Get in touch or visit our services page to find our property inventory packages.

Usually, landlords don’t have to worry about council tax. However, when it comes to HMO properties and vacant periods, things can start to get confusing.

It’s important to understand your landlord council tax responsibilities so as not to get caught out by any unexpected bills or legal issues. So, who pays council tax? What happens when your property is empty? And what about unpaid tenant debts?

From who is responsible to available discounts and exemptions, our council tax guide covers everything responsible landlords need to know.

 

Should I Be Paying Council Tax?

All residential properties in England and Wales are liable for council tax. If you fail to pay on time, there could be serious financial and legal consequences.

How does it work? The council tax system works according to a hierarchy of liability. The first on the list to pay is any adult over the age of 18 who is an occupant of the property. The landlord or property owner comes much further down this list.

 

How Is Council Tax Calculated?

Properties are assessed by the Valuation Office Agency (VOA) and placed within bands A-H according to the location and type of housing. The banding is based on the amount the property could be sold for and the cost for each band varies by council.

 

Who Pays Council Tax: Tenant Or Landlord?

This depends on the sort of tenancy agreement you have in place. Usually, if you rent the entire property to one or several joint tenants, it is their responsibility to pay. (This includes single occupants, families and shared tenancies) In this case, the bills will be sent directly from the local council to your tenants, leaving you out of the equation.

However, if you rent to several tenants with individual tenancy agreements, you will become responsible for paying council tax. Therefore, if you rent out an HMO property, you will be liable to pay.

 

Do Landlords Pay Council Tax On Empty Properties?

Yes. During void periods, the landlord is responsible for paying council tax.

The size of the bill depends on your local council. You could be given a discount of up to 50% while the property remains unoccupied. However, this is becoming more unlikely as the number of unoccupied properties grow.

If your property is unfurnished, you may be exempt from council tax for up to 6 months.

 

Is A Landlord Liable For Unpaid Council Tax?

Not usually. As long as the tenancy agreement stipulated that council tax payments were the responsibility of the tenants, then landlords should be safe if tenants leave with unpaid debts.

If your property is vacant for any time, as the landlord, you will be responsible for paying tax during this period. However, you should not be responsible for repaying leftover bills that should have been paid by tenants while they were living in the property.

Without proof of a signed tenancy agreement, it will be harder to convince the council of your exemption if your tenant moves out early without notifying you.

See our blog on who is responsible for unpaid utility bills for more answers to common questions regarding bills.

 

 

Landlord Council Tax Exemption

Some properties and tenants are either exempt from paying council tax or are eligible for a discounted rate.

If you’re a landlord of an HMO property, make sure you check your tenant’s status to find out if you are eligible for any discounts. For example, if there is a mix of full-time students and one adult, you may receive a 25% discount.

 

Who Is Exempt From Council Tax?

There are certain groups of people who are exempt or eligible for a discounted council tax bill;

  • Single occupants of a property receive a 25% discount
  • Full time students are exempt
  • Live in carers are exempt
  • Tenants below the age of 18 are exempt

 

What Properties Are Exempt From Council Tax?

 

There are also a number of properties that are exempt from paying council tax;

  • Unfurnished properties may be exempt for six months
  • Recently repaired properties may be exempt for six months
  • Properties occupied by full time students only
  • Properties solely inhabited by tenants under the age of 18 receive a 50% discount

 

 

Landlord Council Tax Advice

To ensure you stay on top of your council tax responsibilities and avoid any unexpected bills, follow these simple tips;

  • Always determine who is responsible for paying council tax in the tenancy agreement
  • Keep a signed copy of this agreement on file
  • Notify your local authority at each change of tenancy and give the names of new tenants
  • For HMO properties where you are liable to pay council tax, ensure you factor this cost into the rent price
  • Plan for any void periods in which you may have to pay council tax
  • Check for any council tax discounts or exemptions you may be eligible for
  • Try to minimise void periods to avoid paying council tax in between tenants

 

 

Property Inventory Management From No Letting Go

If you’re a busy landlord looking for help managing your portfolio, we could help. Our wide range of professional property services includes comprehensive inventory reports, vacant property inspections and right to rent checks.

Here’s what else we offer;

  • Floor plans
  • Smoke and CO reports
  • 360-degree property photography
  • Property appraisals
  • HHSRS
  • Legionella risk assessments
  • Digi Sign
  • Check in/check out
  • Mid-term reports

 

For all your property management needs, browse our full list of property services to find out how our friendly team could help streamline your business and protect your investment.

As a landlord, you’ll understand the importance of finding reliable tenants that pay the rent on time. One way to secure this is through comprehensive tenant reference checks. But what happens if a potential tenant fails their credit check?

Renting to tenants with bad credit doesn’t necessarily spell disaster. If the tenant ticks all the right boxes, there are ways to get around this issue and protect yourself and your investment.

 

What Is A Tenant Reference Check?

A tenant reference check helps landlords and letting agents decide if a tenant is likely to be reliable and pay each month’s rent on time.

In addition to a credit check, tenant referencing can look for;

  • Proof of identity
  • Proof of employment
  • Current salary
  • Bank statements
  • Proof of benefit claims
  • Right to rent in the UK
  • A previous landlord reference

 

What Is A Credit Check?

A credit check looks at the tenant’s credit report and financial history, spotting any times they have missed bill payments or have fallen into arrears. This is analysed to produce an individual credit score.

A credit score can range from around 0- 900 points, depending on the score system used. A good credit score could be anything above 750 points.

 

What’s The Minimum Credit Score A Landlord Should Accept For A Tenant?

An acceptable credit score will be dependent on the scoring system used, as they differ between referencing agencies. However, when a tenant’s credit score comes back as poor or very poor, you may want to think about asking some further questions.

 

What Causes A Bad Credit Scoring?

A poor credit score can be caused by a number of issues, some more concerning than others when it comes to potential tenants.

Here are a few of the more serious reasons for a poor credit rating;

 

Unpaid Debts

Naturally, being in debt can negatively affect a tenant’s credit score as it suggests that they struggle to manage their money and are not financially stable. If this issue is uncovered by a credit check, you may think twice about entering into a tenancy agreement.

 

Being Declared Bankrupt

This should set major alarm bells ringing for landlords as it suggests the tenant has had difficulty managing repayments in the past.

 

County Court Judgements

A County Court Judgment (CCJ) is when a tenant is forced to repay a debt by the courts. If this shows up, it’s not a great first impression.

 

Late Credit Card Or Loan Repayments

If a tenant has struggled to pay credit card repayments in time, this doesn’t bode well for rent payments.

 

There are also a number of issues that can affect credit scores that don’t necessarily mean a tenant will struggle with their finances;

 

Not Having A Credit History

One reason for a poor credit rating that is particularly common among younger tenants and students is not having a credit history at all. If the tenant has never taken out a credit card or loan and has never paid bills from their bank account, they won’t have a credit trail to check, resulting in a low score.

This is a likely occurrence if you rent to students or young adults who have just left home and doesn’t necessarily mean that the tenant will be bad at managing their money.

 

Only Making The Minimum Credit Card Repayments

Credit scores can be affected if the tenant only makes the minimum repayment on their credit card each month. The assumption is that they are struggling to keep up with all their outgoings, however this isn’t always the case.

 

Not Being On the Electoral Roll

Not updating addresses and personal information can affect credit score, as can not being on the electoral roll. This step is easily forgotten when moving house and doesn’t prove the tenant will be unreliable.

 

No Proof Of Address

If a tenant hasn’t been responsible for paying bills at their previous residence or were not named on the tenancy agreement, it can be difficult for the referencing agency to determine proof of address.

 

 

How Important Is Good Credit?

As we explored above, good credit isn’t the be all and end all when it comes to finding a good tenant. Equally as important is whether they fit your target tenant profile.

If you’ve been struggling to rent out your property or think the tenant will make a good fit, there are ways to get around bad credit.

 

 

How To Rent to Tenants With Bad Credit

Poor credit rating alone doesn’t mean you should give up on a tenant if they tick all the other boxes. Here are some ways to minimise risk;

 

Dig Deeper

The first thing to do when a potential tenant’s credit check comes back as poor, is to find out why. If it was down to late or missed payments it may be best to steer clear, however if it’s something as simple as a lack of credit history then it needn’t stop you from going ahead with the tenancy.

 

Ask To See Previous Rent Payments

Seeing proof of regular, timely rent payments for a previous rental arrangement will help to ease your concerns about their responsibility as a tenant.

 

Charge a Larger Deposit

If a tenant has a low credit score, it’s likely they will be prepared to pay a slightly larger security deposit to make up for it. This will give you extra leverage when it comes to recovering costs at the end of the tenancy.

 

Ask For A Guarantor

One of the best ways to protect yourself if a tenant has poor credit is to ask for a guarantor. A guarantor will be able to cover any costs if the tenant is unable to pay, giving you extra protection.

The guarantor will need to sign the tenancy agreement along with the tenant and have secure financial status.

 

Ask For A Previous Landlord Reference

One sure way to find out if a tenant is reliable is to ask their previous landlord.

Here are some questions to ask;

  • Did the tenant pay rent on time each month?
  • Did the tenant look after the rental property?
  • How often did the tenant raise issues with the landlord or letting agent?
  • Were any complaints received from neighbours regarding the tenant?
  • What condition did they leave the property at the end of the tenancy?
  • Would you feel happy renting to the tenant again?

 

Ask For Rent Upfront

While this may be a lot to ask and not always in scope, a tenant with a high risk credit score may be prepared to pay rent upfront. Paying the first six months of rent upfront will ease any initial worries and give the tenant time to prove their reliability.

 

Receive Payments By Direct Debit

Asking for rent payments via direct debit is common practice these days and is especially important if you’re concerned about a tenant’s financial responsibility.

 

Shorten The Tenancy

If you’re worried about the reliability of a tenant, setting a shorter, probationary rental period in which the tenant has time to prove their responsibility could be a good idea. If you experience late payments or other issues, you can terminate the tenancy early.

 

Talk To The Tenant

You can tell a lot from a frank, face-to-face conversation. If your potential tenant willingly discloses their credit issues and can provide a reasonable explanation for the low score, you will be much better placed to make an informed decision.

 

How To Organise A Tenant Reference Check

Although credit checks aren’t the only way to choose the right tenant, it is important to perform tenant referencing so you aren’t caught out further down the line.

As a busy landlord, you may want to delegate this task to a professional tenant referencing company. Placing this responsibility in the experienced hands of a recommended referencing company will minimise any risks and help the process go smoothly.

 

 

Protect Your Property With No Letting Go

In addition to choosing a reliable tenant, a comprehensive inventory is one of the best ways to protect your rental property.

At No Letting Go, we offer unbiased property inventory reports to help safeguard your property against damage and recover essential costs at the end of a tenancy. All the way through from Schedule of Condition, to check in and property visits, our property clerks are there to simplify the rental process and save you time.

Interested in hearing more? Head to our website to discover the full range of property management services we offer.

Budgets can be tough to manage for landlord and letting agents alike. Sometimes, property maintenance costs can eat into your finances dramatically.

From what’s involved to how to save, we offer insights and guidance on how to best manage budgets when undergoing maintenance on your property portfolio.

 

What Is Included In Maintenance Costs?

Before we go into budget management, we need to be clear on what maintenance costs are involved in renting a residential property.

Here’s a list of all the things to consider when it comes to maintenance;

 

Repair Costs

As a landlord, it’s your responsibility to fix any repairs needed resulting from normal wear and tear. This can include;

  • Repairing or replacing white goods and appliances
  • Fixing boiler issues
  • Repairing any electrical faults

 

Refurbishment & Decoration

Keeping your property looking fresh for new tenants is an important part of being a good landlord and attracting the right target tenants. It’s recommended that carpets are replaced every 5-7 years, and properties are fully redecorated every 3 years.

However, if your property is looking particularly lived in after a tenancy or you come across some questionable stains, you might need to redecorate more often.

Here’s what else is included in refurbishment and decoration;

  • Painting throughout
  • Replacing carpets or flooring
  • Replacing curtains
  • Replacing old, tired furniture items every 10-15 years
  • Replacing kitchen and bathroom fittings every 10-15 years

 

Exterior Maintenance

It’s not just the inside that needs attention. Staying on top of the exterior of your property can help ward off future structural issues and save money in the long run.

Here’s what it could include;

  • Replacing missing roof tiles
  • Clearing guttering
  • Garden fence maintenance
  • Window cleaning and repair

 

Interior Cleaning

Thorough cleaning is essential between tenancies, and you may also need to arrange for cleaning to be done during a tenancy. If the windows need cleaning for example, or if the property has suffered water damage.

 

Property Inspections

Particularly important during void periods, regular property inspections are an important part of maintenance for buy to let properties.

Inspections protect your property from theft, vandalism or damage from unnoticed leaks, preventing the need for extensive future repairs. We offer a professional vacant property inspection service to give you peace of mind that your investment is protected.

 

Gas Safety Certificates & Safety Checks

UK landlords have a legal requirement to arrange regular safety checks, including;

  • An annual gas safety inspection from a Gas Safe registered engineer
  • Electrical safety checks
  • PAT tests for white goods
  • Energy Performance Certificate
  • Ensure smoke detectors are present and working

 

Your Time

This cost is usually overlooked by most landlords, but the time you put into the maintenance of your portfolio really adds up. Particularly if you are balancing your duties as a landlord with another paid job, extra time spent on maintenance may mean losing out on wages.

If this is the case, it may be worth investing in a full management service from a property management company so you can swap a management fee for more time for other ventures.

 

How Much Does It Cost To Maintain A Rental Property?

 

Maintenance costs will vary depending on several factors;

  • Size of the property
  • Age of the property- older homes require more upkeep
  • Location of the property- service charges vary dependant on area
  • Type and number of tenants

For example, if you rent to students or large families, you may have to fork out more for accidental damage repair costs.

 

Landlord Maintenance Costs: How to Save Money

Now we’ve discussed what’s involved, it’s time to look at ways to save.

 

Choose Your Target Tenant Wisely

While finding tenants may not be the first thing you think of when it comes to maintenance, the tenant you choose could have an effect on your maintenance costs.

For example, as mentioned above, renting to students can result in more accidental damage as there tends to be more people living in one property, and tenants have a reputation for partying! Similarly, renting to tenants with pets is likely to involve more refurbishment at the end of the tenancy.

Deciding on your target tenant from the get-go is an important part of the process.

 

Act Fast When It Comes to Repairs

The quicker you act on repairs and maintenance tasks, the more popular you’ll be with tenants and the less likely they are to develop into serious issues. Usually, dealing with problems as soon as they arise means you can save money in the long run as you have time to think about the best possible solution.

Paying for maintenance costs early will also help you to manage your monthly budgets and keep on top of your spend.

 

Buy Quality Furnishings

Opting for the cheapest furnishings available isn’t always wise. The cost of replacing flimsy furniture every year is likely to add up to more than investing in quality in the first place. This is particularly true for mattresses, sofas and dining tables. Our blog on furnishing your rental property will help you with some handy tips.

 

Keep It Simple

When it comes to decorating your properties, more is less. You don’t need to go overboard to provide a comfortable home for tenants. Simple, modern furniture without too many frills will appeal to most and will be kinder on the budget.

Tip: Avoid painting everything white as it will require more upkeep. Neutral, mid-tones are much more forgiving.

 

Don’t Skimp on Landlord Insurance

Landlord insurance is essential when renting a property. Finding the right deal can help you save when things go wrong. Quality contents or accidental damage insurance will protect you in the case of weather damage or accidental spills.

Make sure you shop around for the best deals.

 

Check Council Tax Exceptions

If one of your rental properties is vacant for a period, or you are performing refurbishment that renders your property inhabitable, you may be eligible for Council Tax redemption. This will leave you with some extra cash to spend on essential repairs and decoration.

 

Landlord’s Energy Saving Allowance

By increasing the energy-saving potential of your property, you could save money that can be injected back into the maintenance budget.

By reinforcing insulation in your rental property, you could save a significant amount in tax.

 

Know When To Ask For Help

While rolling up your sleeves and getting stuck in can save on service fees, it’s not always the best option.

Botched DIY can end up costing more than the original problem, and when it comes to electrical or plumbing issues, professional is always best.

 

Get More Than One Quote

When you need to pick up the phone to a plumber or tradesperson, make sure you do your research.

Particularly important when it comes to bigger jobs, getting several quotes will help you find the most competitive price.

 

Invest In A Comprehensive Inventory Service

Compiling a comprehensive written and photographic list of all of the items and furnishings and their condition within your property is one of the best ways to recuperate maintenance costs at the end of a tenancy.

If there is any damage beyond normal wear and tear, it will be much easier to deduct the appropriate costs from the deposit.

A professional property inventory service provides an impartial account of your property and is delivered using high quality photography in a handy, easily accessible digital report.

 

Landlord Maintenance Responsibilities: Help From No Letting Go

The costs of being a landlord are wide ranging. From agent fees to mortgage interest, balancing your rental income with outgoing costs can be tough.

That’s why sometimes it pays to get some help. Whether it’s repairs and maintenance reports or inventory services, our teams of experienced clerks could help streamline your business so you can take control of your budget.

Browse our full list of property management services to find out how we can help.

It can be tricky to make your property stand out from the crowd in the saturated property sector. So, how can you take advantage of the latest in digital photography software to ensure your property is snapped up by the best tenants?

That’s where 360° property photography comes in. Our virtual photography service could be the difference between blending in and beating the competition.

If you’re looking to attract more viewings and get ahead of the curve with the latest in PropTech, find out what this service could offer.

 

What is 360° Degree Photography?

360° degree photography provides interactive, panoramic images that place the viewer in the footsteps of the photographer. This type of panoramic photography allows you to ‘look’ up, down and to the left and right of the image for a full 360° view.

Panoramic photos are transformed via 360 degree photography software to recreate a room or space. (You may have seen this being used in google street view on google maps)

 

What is a 360° Virtual Tour?

A 360° virtual tour replicates a standard property tour or house viewing through virtual reality, allowing the user to ‘visit’ properties from anywhere in the world. Users are able to explore each room of the property from the comfort of their living rooms via a connected device.

 

The Benefits of Virtual 360° Photography Tours

With most property searches starting online, it makes sense to present your property in its best light. From saving time to gaining trust, here’s what 360° technology could do for your business;

 

Exceptional Property Marketing

First impressions count and 360° photos could give your property the edge. High quality images make you and your business look professional, and the more detailed images available of your property, the more popular it will be with prospective tenants.

Bring your property to life and highlight its best features with a full, virtual tour and help potential tenants picture themselves living in your property by exploring each room in detail.

 

Gain Tenant Trust

There isn’t really anywhere to hide when it comes to virtual photography tours. By providing a realistic picture of your property and putting every part of the building on display, you will gain trust from tenants. Essential for starting the tenant relationship off on the right foot.

 

Remote Property Viewings

A virtual tour can be accessed from anywhere- all you need is a digital device.

Save time and resources by allowing prospective tenants to experience an immersive online property viewing from home. This benefits tenants and property professionals alike, as tenants won’t waste time visiting unsuitable properties and lettings agents will have a narrower, targeted tenant pool to focus on.

This service could also benefit landlords who live abroad or a long distance away from the properties in their portfolio, allowing them to inspect their investment from anywhere in the world.

 

Quick Turnaround

With a 24 hour turn around, our 360° virtual photography service can be delivered quickly, so you can stay ahead in the dynamic lettings industry.

 

Our Property Reporting Software

Our property reporting software, Kaptur, enables virtual tours to be embedded into any compliance report.

Kaptur has been developed specifically for busy property professionals looking to streamline their workload. From custom reporting to location mapping- Kaptur represents the latest in PropTech.

 

How Can 360° Virtual Tour Photography Be Used?

We’ve partnered with Eye Spy 360 to offer a nationwide service helping landlords, estate agents and property professionals market and manage their property portfolios.

Here’s an example of when virtual tours could be utilised;

  • Residential sales and lettings marketing
  • Insurance inspections
  • Block and property management inspections
  • Derelict building inspections
  • Property research projects
  • Inventory and schedule of condition of large properties
  • Commercial sales and leasing
  • Build to Rent projects

Whatever the type of property, a 360° virtual tour could be of service.

 

Property Photography and Floor Plans

In addition to standard property photography as part of your visual inventory report, we also offer floor plan services to add to your marketing literature and reporting.

All of the No Letting Go surveyors are highly trained according to the Royal Institute of Chartered Surveyors (RICS) guidelines, ensuring a professional service with accurate results.

 

360° Property Photography Prices

Interested in finding out more? Get in touch to book a survey or find out how we can incorporate a 360° virtual property tour into a regular No Letting Go report.

To discover how else we could help, browse our full list of property management services.

Mould. The scourge of the rental property market. No matter how much effort you put into ventilating a property and keeping things dry, it somehow seems to find its way back again and again.

But whose responsibility is it to deal with mould in a rental property? And are tenants able to demand rent reductions for lingering mould?

We’re exploring this common problem to help landlords and tenants alike come to a happy solution. From prevention to deposit deductions, let’s look at landlords mould responsibility to get to the bottom of who is culpable and prevent disputes before they arise.

 

What is Damp and Mould?

Before we delve into who is responsible for dealing with mould in rented properties, let’s look at the different types of mould and its causes.

Rising Damp

Rising damp is the name given to the process of water rising up and into a building from the ground through bricks and mortar. All houses should have a layer of waterproof material called a ‘damp proof’ to prevent rising damp. However, when this fails, problems occur.

If this issue isn’t solved promptly, it can lead to mould forming that’s difficult to remove for good.

Penetrating Damp

Penetrating damp is caused by leaks that allow water into the property, causing surface mould growth. These leaks could come from broken roof tiles, blocked guttering or faulty plumbing.

The main thing to remember about penetrating damp is that it comes from outside the property and is usually a structural issue.

Condensation

Condensation happens when moisture in the air comes into contact with cold surfaces, leading to water droplets and mould growth. If a building is poorly insulated or the ventilation or heating system is faulty, then the condensation is considered a structural issue. However, condensation can also be caused by tenant’s lifestyle habits.

 

The Health Risks of Living with Mould

The Housing Health and Safety Rating (HHSR) dictates that damp is an essential repair as it can cause health issues for tenants.

Mould is a fungus which can trigger or exacerbate the following health problems;

  • Difficulty breathing
  • Irritation
  • Allergic reactions
  • Skin rashes
  • Asthma attacks

Not only is mould detrimental to physical health, it can also have an impact on tenant’s sense of wellbeing. This is why it’s so important for landlords to deal with mould swiftly and efficiently.

 

Is Mould the Landlord’s Responsibility?

With regards to mould, when fingers are pointed, things can get complicated.

Legally, rising damp or penetrative damp caused by structural leakage is the landlord’s responsibility to put right. Under section 11 of the Landlord and Tenant Act 1985, it is the landlord’s responsibility to resolve mould issues caused by structural faults.

However, when interior condensation is caused by the tenant, this shifts the responsibility.

Condensation can be caused by;

  • Drying clothes indoors
  • Showering and not opening the window
  • Cooking without opening the window
  • Not heating the property sufficiently

Determining whether mould in a property is due to the tenant’s lifestyle habits or the poor ventilation of the property can be tricky.

 

First Steps When Mould Is Spotted

If you’re a tenant whose spotted mould anywhere within your rental property, you need to alert your landlord straight away. Describe where the mould is and any damage to furniture or belongings. Once the problem has been reported, the landlord has to respond within 14 days.

For landlords, when a tenant reports mould in the property, arrange an inspection to determine the cause of the mould and, where necessary, ensure repairs are made.

Once a damp problem has been resolved, you may also need to repair any damaged plaster or flooring and redecorate affected areas.

If you don’t respond within the two-week timeframe the tenant could contact the local authority who could force the issue through. That’s why it’s vital to arrange an inspection and repairs as soon as possible.

 

Can I Withhold Rent for Mould?

If your landlord refuses to make repairs, withholding rent can be risky. Technically, tenants do not have the right to withhold rent and could be subject to repossession or even eviction.

However, tenants do have the right to make the repairs themselves and make up the cost in future rent. If you decide to go down this route, you need to be certain that the repairs needed are the responsibility of the landlord. Be sure to seek legal advice before making this stance and follow the correct procedures.

 

Can a Landlord Deduct Deposit for Mould?

If there is mould in a property at the end of a tenancy which was not there at the start, landlords have a right to deduct money from the deposit only if the mould was caused by the actions of the tenant.

The amount deducted is at the discretion of the landlord, and will take into consideration any repairs or redecoration needed above the level of fair wear and tear.

 

Is Mould Considered Normal Wear and Tear?

Whether mould is considered to be fair wear and tear depends on the cause. If there is evidence to show that the mould has been caused by the negligence of the tenants and advice and regular maintenance has been supplied by the landlord or letting agent, then compensation can be claimed.

 

Can I End My Tenancy Early Due to Mould?

If you’re a tenant who has found themselves in a mouldy property with an inefficient landlord, there are steps you can take.

If your tenancy agreement has a break clause, then you may be able to end the tenancy early. However, if not, contact your local authority who will perform an inspection to determine whether the landlord is culpable of negligence. If so, they will issue a notice to the landlord demanding repairs.

From a landlord’s perspective, if you attempt to evict your tenant without fixing a reported mould problem within six months of it being reported, this could invalidate a Section 21 notice.

 

Condensation and Mould: Advice for Tenants

If you’re a tenant living in a rental property, there are some simple ways to prevent mould;

  • Dry clothes outside when possible or keep them in the bathroom with the doors closed and windows open
  • Cover pans with lids when cooking to prevent excess steam escaping
  • Close the kitchen and bathroom door when in use
  • Use a bath mat to soak up excess water
  • Turn on the extractor fan when cooking or bathing
  • Leave a gap between furniture and external walls
  • Air out cupboards and wardrobes regularly
  • Turn on the heating regularly and try to keep the house a consistent temperature

 

Preventing Mould: Advice for Landlords

Minimising the chances of mould growing at the start of a tenancy agreement could save you money on maintenance in the long run.

Here are some ways to prevent mould in your property;

  • Ensure the property is well ventilated
  • Maintain gutters and roofs to prevent leaks
  • Ensure all plumbing is in good working order
  • Repair any rotten window frames
  • Improve the insulation of the property
  • Install extractor fans in the bathrooms
  • Repair or replace faulty damp proof course

 

Avoid Disputes with a Comprehensive Property Inventory

In cases where it’s difficult to determine the responsibility for mould, a detailed property inventory could help.

Prevent disputes before they can occur by investing in a professional, unbiased inventory report. By providing detailed written and photographic evidence of the state of the property, this report helps landlords and tenants alike by proving responsibility and supporting claims.

At No Letting Go, our team of experienced inventory clerks are well versed in helping landlords and property professionals streamline their workload and comply with regulations.

Whether you’re a landlord looking to recover costs against mould damage, or a tenant leaving a rental property, browse our full list of property services to find out how we can help.