Monday 22 December 2008

A Very Happy Christmas and New Year



A Very Happy Christmas and New Year from everybody at NetRent.co.uk.


Please note that our office will be closed from 1pm on Tuesday 23rd December and will re-open at 9am on Friday 2nd January.




Tuesday 2 December 2008

Exceptional Investment Opportuninty


Imagine an investment that averages over 10% PER MONTH. That’s exactly what our business partners have done this year by investing in Blue Chip companies from the UK Stock Market.

At a time when shares across the world have seen huge losses our business partners have managed a staggering growth throughout 2008. This growth has averaged over 10% each month this year.

This amazing performance has been achieved by investing in some of the biggest names of the FTSE 100, companies like Vodafone, GlaxoSmithKline, Rolls Royce and Tesco.

By adopting a simple but highly efficient investment model they have produced hugely impressive returns for their investors. We are delighted to offer this investment opportunity to you. These Stock Brokers are FSA regulated, based in London and invest in selected companies from the FTSE 100.

If you have Stock Market investments or cash on deposit we believe that you will want more information about how they have averaged over 10% a month throughout 2008.

For more information please ring us now on 01352 759988 or email us at enquiries@netrent.co.uk.

Please note that Netrent Ltd is only authorised to make introductions and past performance is not a guide to future performance.


Tuesday 25 November 2008

Time for Action?



In our last email and Blog we called for the Government and Banks to act to help Private Landlords. The response we received was huge as landlords emailed and rang NetRent.co.uk to support our call for the Government and Banks to act now.

Yesterday the Chancellor presented his Pre-Budget speech which he hopes will stimulate the economy and help the UK avoid a long and painful recession. There was a somewhat vague promise to present plans to boost residential mortgages in the April 2009 Budget but there was no direct assistance for the Private Rented Sector.

The banks who just 12 months ago were fighting to secure as much Buy-to-Let business as they could no longer wish to lend. The chairman of the now state owned Bradford & Bingley told the Treasury Committee last week that Buy-to-Let in the UK was now dead. The Skipton pulled out of Buy-to-Let lending completely last week. The number of Buy-to-Let mortgages continues to drop and still there is no action from the Government.

It seems clear that the banks have effectively washed their hands of the Private Rented Sector. It also seems clear that the Government is not going to help either.

Landlords cannot allow the Government and Banks to do this. There would be no benefit to the UK economy in allowing large numbers of landlords to default on their mortgages. This would just make all Buy-to-Let lending increasingly difficult.

It is up to the Private Rented Sector to make the Government and Banks listen and act. NetRent.co.uk is talking to landlords all over the country to determine what positive action can be taken to make the Government and Banks listen and act.

We would welcome your views. If you have any suggestions about how we can together make the Government and Banks listen and act please email us at enquiries@netrent.co.uk or telephone us on 01352 759988.


Tuesday 11 November 2008

It's about time the Banks and Government helped Private Landlords



The on-going debate over interest rates continues to dominate the Private Rented Sector. Landlords all over the UK are gradually having to become experts in the previously little known LIBOR rate.

LIBOR is the rate at which banks lend money to each other and it has become clear that this rate rather than the Bank of England rate will determine the medium term future of Buy-to-Let in the UK.

Last week’s huge cut in the bank base rate did have an effect an LIBOR but UK banks hardly rushed to pass on the interest rate cut. The negative publicity they received on Friday pushed many of them into a grudging response but several including Barclays and HSBC virtually ignored the furore. It’s interesting to note that both Barclays and HSBC have not asked the Government for funds over the past few months.

This leaves landlords all over the country in a quandary. According to the Royal Institution of Chartered Surveyors (RICS) house sales are now at the lowest since records began. Many landlords see this as an opportunity to buy more property. At the same time many landlords are seeing their business pushed into the red because they cannot remortgage.

The problem is twofold. First, LIBOR rates are much higher than bank base rates. Bank base rates are 3%, LIBOR is 4.2%. Second, there are very few lenders willing to lend to landlords.

We spoke to one major broker yesterday and this is the criteria they are now demanding:
Maximum loan to value 70%
Interest cover 125%
No HMOs
No freehold houses converted into flats
No new build, especially flats
Minimum income £25,000
Deposits must be proved

And yet there are more tenants than ever, more demand for rented property than ever. Rents, on average, are rising.

It seems that the banks and the Government are prepared to watch a huge proportion of the Private Rented Sector slip into debt and repossession without lifting a finger to help.

At the same time landlords who have run excellent businesses cannot expand those businesses because they cannot raise the finance to buy more properties.

The Government now effectively controls the largest proportion of the Buy-to-Let lenders and yet they show absolutely no sign of helping this vital sector of the UK housing market. The banks they have supported with our money are now effectively washing their hands of an industry that just 12 months ago they were desperate to lend to.

There are over 800,000 landlords in the UK. It is about time that landlords started to make their concerns known to Government and the banks. It is time for landlords to demand action to support an industry that owns around 1 in every 9 homes in the UK.

If you have any comments you would like to make or any suggestions please email us at enquiries@netrent.co.uk or phone us on 01352 759988.

If you would like help with a mortgage or remortgage please click here Mortgages Through NetRent.co.uk

Monday 10 November 2008

Win an £8million Property Portfolio


Here's a chance to win £8million worth of property - and support the Great Ormond Street Hospital charity at the same time.

MIA Developments Ltd are running a competition for one lucky person to win a portfolio of property worth £8million and at the same time they aim to generate £600,000 for Great Ormond Street Hospital.

With 'Win a London Pad' you simply buy an MP4 player from 'Win a London Pad', £3.00 will be donated to Great Ormond Street Hospital with the aim of raising up to £600,000 to fund a new purpose-built 4 bed ward in the new Cardiac Daycare Centre - and at the same time you will be entered into a draw to win an £8million property portfolio.

For more information click here Win a London Pad

Thursday 6 November 2008

Bank Base Rates Cut by 1.5%


Will today’s 1.5% cut in the Bank Base Rate affect the Private Rented Sector? There’s no doubt that any cut in Bank Base Rates is good news but is a 1.5% cut enough to help landlords?

Before the announcement by the Bank of England John Cridland, deputy director general of the CBI, said “The recession into 2009 will be both longer and deeper than expected” as he called for a big cut in interest rates.

The Halifax also announced today that house prices fell a further 2.2% in October pushing the annual fall to 13.7%.

The problem for the Private Rented Sector is that most Buy-to-Let mortgages are linked to LIBOR not the Bank Base Rate. LIBOR is the rate at which banks lend to each other and this has stayed consistently high during the Credit Crunch and still stands around 6%. As long as LIBOR remains high cuts in bank base rates will have little or no effect on the cost of borrowing money for landlords and other businesses.

Yesterday in Parliament the Prime Minister said “We want the banks and building societies to pass on the interest rate cuts to their mortgage holders”. Given that the Government now has substantial share holdings in so many major banks the question has to be why isn’t the Government telling the banks to lower their rates?

We believe that even if this rate reduction was passed on to borrowers it will have little or no effect on landlords. Will the Government really encourage lenders to support the Buy-to-Let market in preference to first time buyers and businesses? We don’t think that they will.

Lenders are under no pressure to support Buy-to-Let and with so many major Buy-to-Let lenders disappearing from the market the remaining lenders are taking the opportunity to significantly raise their costs and interest rates. We do not see this changing in the short or medium term.

Landlords have found that the cost of borrowing money has risen sharply over the past few months. Today’s cut in Bank Base Rate is very unlikely to reduce this cost. We believe that this situation will last throughout 2009 and well into 2010.

Our advice to landlords remains the same – concentrate on cash flow. Don’t expect Buy-to-Let interest rates to fall in the near future. Lenders will continue to charge high arrangement fees. The only viable offers are at 75% loan to value and below.

For more information on Buy-to-Let mortgages click here Mortgages through NetRent.co.uk.

Monday 27 October 2008

The Rugg Report


The long awaited report Review of Private Rented Sector Housing, commonly known as the Rugg Report after one of its authors Julie Rugg, has been published.

This is essential reading for everyone involved in the lettings industry. The report was complied on the instructions of the Department for Communities and Local Government so it is very likely that this will form the basis for future Government legislation affecting the private rented sector in England.

The Executive Summary can be found here The Private Rented Sector Executive Summary.

The full report can be found here The Private Rented Sector: its contribution and potential.

Tuesday 14 October 2008

A Review of Buy-to-Let Mortgages


In the past few days we have witnessed unprecedented intervention in the Banking sector by central governments both at home and abroad with more to follow. The result is that we will have fewer market participants and reduced competition. From over 2,000 BTL mortgages just over a year ago there are now only around 262 BTL mortgages from just 27 lenders.

Banks, in real terms, will be cash poor and will look to make strong returns on the money they lend. Banks will not look to attract any business that is deemed risky and will look increasingly at the strength of the applicant, their current commitments and ability to service those commitments.

Political pressure could mean sweeping changes to the availability, structure and pricing of BTL mortgage products as the Government and legislators take an active financial stake in the banking sector.

With some politicians and commentators blaming the BTL sector as a major contributory factor in the recent boom in house prices, it is not too outrageous to assume that the Government may seek to distance themselves and the banks that they support from active participation in the BTL sector. It is difficult to imagine the Government allowing banks that they have poured £billions into to lend that money to BTL landlords in preference to first time buyers and small businesses.

Rather the Government may look to capitalise on the current unrest in the housing market by encouraging and promoting wider social housing provision via large scale players in the private rental sector. It is notable that some of the larger developers have already concluded deals with housing associations to take up unsold stock.

All this turmoil leaves the BTL mortgage market in serious disarray. Today BTL interest rates range from 5.39% to a staggering 15.9%. Application fees have soared and can be as high as £2,000. Arrangement fees that were virtually unknown just 12 months ago now range from £690 to as much as 3.25% of the loan.

Today there is just one lender still offering an 85% loan to value BTL mortgage, just 6 companies are left offering 80% loan to value mortgages. It is only at 75% loan to value and below that there is anything approaching genuine choice.

Two lenders are actually paying BTL borrowers to take their mortgages to another lender. One of them has offered a staggering 30% rebate to one landlord to encourage him to find another lender.

Lenders who offer competitive rates find themselves swamped with enquiries and quickly withdraw them as their internal systems clog up. It is increasingly likely that lenders will offer limited tranches of money.

Landlords looking for good mortgage or re-mortgage products need to plan ahead. To ensure that you get these deals as they become available you need to start building a good working relationship with a specialist BTL broker now. Otherwise, by the time you find out that that a good deal is available, make an enquiry and complete an application form the chances are that the money will have gone. Some mortgage deals are now only available for just a few hours before they are withdrawn.

Some of the best BTL brokers are now charging small, upfront retainers. They are choosing to work only with experienced, serious landlords who are willing and able to plan ahead, and act quickly as attractive rates become available. Landlords who are waiting for the market to turn are beginning to find that they are being left behind and are finding that they are missing the best deals.

It is now more crucial than ever that landlords plan ahead. Many landlords are seeing their current mortgage deals coming to an end and need to ensure their cash flow is maintained.

At the same time growing numbers of landlords are taking advantage of the drop in house prices to increase their portfolios. History tells us that many successful landlords often made their most astute purchases during times of economic turmoil and as ever preparation is everything.

To be successful in securing funding in the coming months, Landlords must be able to demonstrate:

· A positive income stream be it rental, earned or a mixture of both (Landlords need to be able to evidence this income with tax returns, pay slips or confirmation from an accountant)
· Modest levels of unsecured personal debt (large credit card balances coupled with personal loans will not encourage lenders to extend further loans).
· Clean credit profile, commitments have been met to date
· Application process is key. Submitting an application with missing or incorrect information will almost certainly mean the application will fail.

It is highly unlikely that there will be an increase in the number of BTL mortgages in the coming months. Many experts are now predicting that little will change before the end of 2009 or even well into 2010. Similarly it is unlikely that BTL interest rates will fall any time soon. But there are still BTL mortgages available and those who plan ahead will get the best and most attractive rates.

If you would like to discuss your mortgage requirements with an expert BTL broker please follow this link Mortgages through NetRent.co.uk or call us now on 01352 759988.

Thursday 9 October 2008

Letting Agent shames tenants who refuse to pay rent


Merseyside letting agents Sutton Estates have come up with a novel and daring way to name and shame defaulting tenants.

"Rent Dodger Lives Here" signs are affixed to the property of tenants who fall into serious arrears and refuse to discuss or acknowledge the problem. Rob Downey, a partner in the letting agent, told us that they were targeting individual cases and this was "not about persecuting people".

So far just two signs have been used and the tenants have now left in both cases. Rob told us that in one case they also had to call in the RSPCA. Neil Heffey, a partner in Sutton Estates, said he was sick and tired of being “avoided” by those who refused to pay for their living accommodation, provided by or through his company. He added “They can avoid us, but not their neighbours. Now, every time they walk in and out of their door, the neighbours will be laughing at them.”

The Liverpool Daily Post newspaper reported that Mr Heffey said recent changes in how benefits are paid, which are intended to give tenants greater control over their rent payments, had seen more and more people falling behind. This also comes as the credit crunch sees property owners finding it more difficult to maintain mortgages.

The Liverpool Daily Post quoted John Tuson, head of commercial property at Kirwans Solicitors who said the estate agent’s signs could potentially open them up to legal action. Among the areas for concern, he pointed out, were the possibility of defamation, incitement to assault or affray, harassment, breach of the tenancy agreement, or even trespass.

Mr Tuson said: “There is also confidentiality, in that the landlord should not expose information about the tenant to a third party, and there’s the issue of privacy under Article Eight of European Convention of Human Rights, along with data protection issues. And I dread to think what the consequences would be if the signs were accidentally put on the wrong houses.”

Rob Downey from Sutton Estates claimed that there was no legal precedent and he said that no-one was sure what the legal implications were.

There is little doubt that many landlords and letting agents would support this kind of action against tenants who abuse the system without regard for the consequences. Many landlords who have responded to our Petition Against Changes to Section 21 Notices have called us to complain that their human rights are being infringed by tenants who simply refuse to pay their rent.

It will be interesting to see how this form of direct action by Sutton Estates develops.

HMRC in new clampdown on Landlords


HMRC (the Taxman) is set to target Landlords in a new clampdown on Buy to Let rental income.

New powers will give Government inspectors the right to turn up and inspect Landlords records in their own homes. Letters have been sent out by HMRC warning Landlords about new measures which come into force next April.

Earlier this year HMRC sent out 500 letters to Landlords to test whether there was a case to specifically target Landlords. HMRC routinely requests details from local government authorities, its Stamp Office and letting agents about rental income and the sale of properties - and that this information will be "data matched" to identify individuals who have not made the appropriate tax returns.

Some newspapers have even claimed that HMRC will be checking property to rent adverts in local shop windows in an attempt to identify as many Landlords as possible.

HMRC are reported to be especially concerned that many Buy to Let investors have incorrectly assumed that they can offset the full cost of a repayment mortgage against their profits for tax purposes. With over 1 million Buy to Let mortgages in the UK there is a lot of potential for investigation.

It is claimed that many landlords do not fully understand the tax rules surrounding their investments, which allow them to offset only a certain proportion of their mortgage payments against their tax bills. Only the interest payable on a mortgage loan can be offset against tax, so any landlord with a repayment mortgage is liable for tax every time they pay off part of the capital they have borrowed.

Our experience suggests that most Landlords opt for interest only mortgages which can be offset against tax, but our advice is to carefully check what you are allowed to claim. HMRC have advised all Landlords to check with their website to ensure that they correctly reporting their status to them. For more information click here HMRC Website. We recommend that all Landlords should seek professional tax advice and correctly declare all your earnings. If you don’t HMRC could be knocking on your door.

Thursday 2 October 2008

Demand for EPCs increases dramatically


Energy Performance Certificates became mandatory on virtually every new tenancy in England and Wales from 1st October. As we have been predicting for months demand for EPCs has risen sharply across the country. This has caused prices to rise and because there is a general shortage of qualified assessors there are now delays in getting EPCs completed.

Landlords have already contacted us to say that their letting agents will not allow tenants to move into properties without a valid EPC. This has caused landlords to miss out on valuable rental income.

Since March we have been able to hold the price of EPCs supplied through NetRent.co.uk at just £70.50 inc VAT. Regretfully, as from Monday 6th October we will have to increase the price of our EPCs to £80 inc VAT.

Our advice to landlords remains the same - book your EPCs now to save time and money. Remember EPCs last for 10 years, get them done now and get them out of the way.

EPCs become mandatory in Scotland from 4th January 2009. If you have rental property in Scotland book your EPCs now.

For more information on EPCs and to order an EPC please click here EPCs through NetRent.co.uk

Tuesday 30 September 2008

Black Day for Buy-to-Let


Over the weekend the last of the demutualised building societies, the Bradford & Bingley, was nationalised. The demise of the Bradford & Bingley followed hard on the heals of the takeover of HBOS by Lloyds TSB and the Nationwide’s much less publicised takeover of the smaller building societies the Derbyshire and the Cheshire.

Monday saw the fourth largest US bank Wachovia rescued by Citigroup, Benelux banking giant Fortis partially nationalised, the third largest Icelandic bank Glitnir nationalised. The US stockmarket tumbled nearly 7%, it’s largest one day drop ever as the US Congress failed to agree on the $700billion bail-out.

The shock waves that have pounded the financial markets have hit the Buy-to-Let market particularly hard. The Bradford & Bingley owned Mortgage Express, arguably the largest Buy-to-Let lender. It is difficult to believe that the new owners of the Bradford & Bingley (the Government) will offer new mortgages to landlords. That means that the UK's largest Buy-to-Let lender has closed it's doors to new lending leaving a huge gap in the Buy-to-Let market.

The HBOS takeover will have a major effect on another huge Buy-to-Let lender Birmingham Midshires, part of the HBOS group. Companies like UCB, Mortgage Works and Cheltenham & Gloucester all pulled Buy-to-Let mortgage deals. Paragon, previously a huge Buy-to-Let lender, has yet to return to the market.

The Bank of England also reported on Monday that new mortgage lending had collapsed in August down 70% from August 2007. The Land Registry reported on Friday that house prices fell again in August this time by 1.9%.

Buy-to-Let lending is now a major casualty of the Credit Crunch. There are fewer lenders offering even fewer mortgages. The amount that lenders will lend is now considerably less than just 12 months ago. Fees have risen steeply. We believe that this situation will get even worse and talking to industry experts we have been unable to find one who thinks that things will get better before the end of 2009.

The best estimate is that the current banking crises will last for between 18 months and two years before we see any return to normality.

The message to Landlords is that you should focus on cash flow. There are still Buy-to-Let mortgages available so if you have fixed rate deals coming to an end over the next few months you should be looking at your options now. With house prices falling loan to value is becoming critical. We strongly urge Landlords to review their lending now to ensure that your cash flow is sustainable over the next 18 to 24 months.

We have Buy-to-Let experts available throughout the UK to help you decide the best course of action to take, click Mortgages through NetRent.co.uk for more information.

There seems to be little doubt that we are all destined for a very bumpy ride over the coming months. Landlords who prepare, control their costs and manage their properties well are likely to survive and succeed. Landlords who fail to properly manage their business are likely to become victims of this Credit Crunch.


Monday 29 September 2008

HMRC warn about scams


HMRC (The Inland Revenue) have recently issued a warning about scam emails. The emails claim to be from HMRC offering tax refunds and often include an on-line form.

Further information about these scams can be found on the HMRC website, please click here HMRC scams for more information.

Monday 22 September 2008

Encouraging Responsible Letting

A couple of weeks ago we published details and links about the Law Commission’s report Housing: Encouraging Responsible Letting. We believe that everyone involved in the lettings industry should read this report as it is likely to form the basis for future legislation.

The report itself runs to 135 pages but according to the report only 40 landlords actually contributed. This probably reflects the research we have done which indicates that most landlords did not know that the Law Commission was preparing a report.

Some of the more interesting parts of the report are:

“The consequence of poor housing management and housing standards is that the private rented sector continues to suffer from a poorer reputation than it should, and some tenants continue to experience poorer housing conditions than they should.”

The Law Commission states “we think that bringing about effective change of culture in the residential lettings market may ultimately require the introduction of a compulsory system of self-regulation.

“Although the private rented sector is highly fragmented, with large numbers of individual landlords letting only a small number of properties, when aggregated together the private rented sector is an enormous business.”

“Few sectors of the consumer economy are wholly regulation free. Indeed what is remarkable is that the rental market lacks the structures for consumer protection found elsewhere”

The Law Commission makes a series of recommendations:

We recommend that landlord accreditation schemes should be made available in every local authority area.

We recommend the creation of a housing standards monitor for the private rented sector.

We recommend that consideration be given to making the Office for Tenants and Social Landlords the housing standards monitor for the private rented sector in England

We recommend the establishment of a rented accommodation stakeholder board to which representatives of all sides of the private residential rented property sector are appointed in each of England and Wales.

We recommend the development of a single code of housing management practice for landlords in each of England and Wales.

We recommend that the housing standards monitors and the stakeholder boards should be asked to consider the feasibility of the introduction of a national landlords’ registration scheme within their areas.

We recommend that all those who provide letting agency services on a commercial basis should be brought within an appropriate regulatory scheme.

We recommend that the monitors for standards and the stakeholder boards should be asked to develop proposals to encourage the development of alternative methods for dealing with complaints and grievances.

We recommend that the housing standards monitors and stakeholder boards should be asked to develop proposals for piloting a scheme for home condition certification.

We recommend that the housing standards monitors and stakeholder boards should be asked to consider what appropriate and affordable incentives would be necessary to ensure that the proposed programme for the enhancement of voluntary self-regulation is made attractive to landlords.

Interestingly, the Law Commission seems to agree with NetRent.co.uk that there is no need to change the Section 21 notices. The Law Commission says:

Retaliatory eviction

Although this was not an issue on which we consulted, it is an issue which has attracted a considerable amount of public attention over the last year. The basic idea is that, where a landlord seeks possession against a tenant, but it can be shown that the proceedings were taken against the tenant in retaliation for the tenant making a complaint to or taking some other step against the landlord, for example resulting from poor housing conditions, the landlord would not be entitled to a possession order from a court.

At first sight, this form of legal protection for tenants may seem an attractive idea. We think, however, there are likely to be significant difficulties with it in practice.

(1) Most tenants do not seriously consider taking legal proceedings. The availability of legal provisions to address retaliatory eviction may be of symbolic importance but be of little practical effect.
(2) There would be major evidential problems in establishing that a landlord was bringing possession proceedings solely as retaliation for steps that have been taken against him or her.
(3) Retaliatory eviction does not fit the smart regulation approach we advocate here.
(4) We anticipate that introducing retaliatory eviction could cause considerable disturbance to the private rented sector by introducing a measure whose impact would be unpredictable and uncertain.”

However, we believe that the threat raised by the Citizens Advice Bureau and others remains very real and we ask everyone involved in the lettings industry to sign our Petition Against Changes to Section 21 Notices. Already over 2,100 people have added their names, but we believe that is essential that as many people as possible join with us and sign the Petition.


Landlord Events


Below are some forthcoming Landlord Events. All events listed are open to anyone involved in the lettings industry.If you have an event you wish us to publicise free of charge please contact us at enquiries@netrent.co.uk or ring us on 01352 759988. Please contact the organiser for further information about individual events.


September 2008

Tamworth Landlord Forum
Tuesday 23 September 10am-12:30pm
Venue: Committee Room 1, Marmion House, Lichfield Street, Tamworth B79 7BZ

Swansea Landlords Fayre
Friday 26th September 2008, 1pm to 5pm
Venue: Brangwyn Hall, Swansea
Contact: Housing and Public Health 01792 635600 evh@swansea.gov.uk



October 2008

Darlington Landlord Forum
Tuesday 7 October 1.30pm to 4.30 pm
Venue: Maidendale House, Burnside Road, Darlington DL1 4SU
Contact: David Burrell, Housing Renewal Manager 01325 73410 david.burrell@darlington.gov.uk

Sheffield & District Landlord Trade Fair

Thursday 9 October 2008 1 to 7pm Don Valley Stadium Sheffield, S9 3TL Web: www.sheffield.gov.uk/landlordexpo

or telephone Dennis Tester at Sheffield City Council on 0114 273 5134 rls@sheffield.gov.uk

Manchester Landlord Forum
Thursday 9 October 2008, 9.45am-12.30pm
Venue: Manchester Town Hall, Albert Square, Manchester M60 2LA
Contact: Jayne Baker 0161 231 7101 help_with_private_renting@manchester.gov.uk

Camden Landlord Forum
Thursday 16 October 6.30pm-9pm
Venue: Friends Meeting House, 173 Euston Road. London NW1 2BJ

Cardiff Landlord Forum
Monday 20 October 6pm to 8pm
Venue: Cardiff County Hall, Atlantic Wharf, Cardiff Bay CF10 4UW

Tower Hamlets Landlord Forum
Wednesday 22 October 1:30pm-4.30pm
Venue: Room RR101, Albert Jacobs House, 62 Roman Road London E2 0PG



November 2008

Wrexham Landlord Forum
Thursday 6 November 5pm for 5.30pm
Venue: NEWI, Wrexham

Gloucestershire Landlord Expo
Thursday 27th November 1pm-7pm
Gloucester Rugby Club, Kingsholm, Gloucester
Exhibition with seminars.
NetRent.co.uk will be running a seminar on the Future of Buy-to-Let
Contact: Suzie Phelps 01453 754449 suzie.phelps@stroud.gov.uk


Tuesday 9 September 2008

The Citizens Advice Bureau challenge to Section 21 Notices


Last week in this Blog we highlighted the campaign led by the Citizens Advice Bureau (CAB) to significantly alter Section 21 Notices (please see the article below). Under a Section 21 Notice a landlord has the automatic right to repossess their own property. Providing the relevant forms are submitted to the courts correctly the court has to award possession of the property back to the landlord.

It is a vital piece of legislation. It protects the investment that the landlord has made by ensuring that they can always re-claim the property. It has also been the catalyst for the Buy-to-Let boom since the late 1980s, in particular because it enables lenders to offer mortgages safe in the knowledge that they can gain vacant possession should the landlord default on the payments.

As we explained in our last email this situation is now under threat. In a publication called A Tenant’s Dilemma – Warning: Your home is at risk if you dare complain the CAB spell out why they want a change in the legislation.

No-one wants to see tenants evicted by irresponsible landlords, especially vulnerable tenants. NetRent.co.uk would willingly support any scheme that could be proven to stop such evictions. The CAB report would have you believe that evictions by evil landlords are widespread. But just how big is the problem that has caused the CAB to launch this campaign? According to their own report:

“Eviction from an assured
shorthold tenancy is one of the most common
reasons for households becoming statutorily
homeless. In 2006, 10,470 households were
accepted as statutorily homeless by local
authorities following eviction from an assured
shorthold tenancy, accounting for around
13% of all homelessness acceptances (DCLG
homelessness statistics, 2006).”

Whilst not wishing to diminish the impact for any of the people affected, there are around 2.5million privately rented homes in the UK. Therefore, if the CAB statistics are correct this problem affects just 0.41% of tenancies in the UK.

The implication from the CAB report is that every one of the 10,470 made homeless following eviction is the victim of unscrupulous landlords. They make no distinction between ‘landlords from hell’ and ‘tenants from hell’. It is totally unfair to assume that every eviction is due to vindictive landlords.

We have been flooded with emails and phone calls into our office since we launched our Petition Against Changes to Section 21. Landlord after landlord has told us about their experiences with ‘tenants from hell’. The CAB report makes no reference to this and the reader is left with the impression that a huge social problem lies squarely with landlords victimising helpless tenants.

The CAB’s focus is on retaliatory eviction. So how widespread is retaliatory eviction? According to the CAB report 129 Environmental Health Offices responded to their questionnaire. Asked whether tenants were deterred from asking for help in case of retaliatory action the CAB state:

“Forty eight per cent of respondents said this happened
always or often.”

Actually, according to the CAB’s own report, just 2% said this always happens, 46% said it often happens and the majority, 54%, said that it sometimes happens. There are no statistics to back up these claims just the ‘gut feelings’ of 129 Environmental Health Officers (EHOs), 67 of whom said that they believe the problem ‘sometimes happens’. Less than 3 of the EHOs they questioned believed that landlords always issue retaliatory Section 21 notices against tenants. Based on this evidence the CAB feel confident enough to call their report Warning: Your home is at risk if you dare complain.

Nowhere in the CAB report did they question landlords about why landlords seek repossession under Section 21. They claim that they spoke to landlords but they conducted no survey they were prepared to publish. I suspect that the CAB knows why landlords usually issue Section 21 Notices, but it doesn’t serve their purpose to highlight the reality that far more landlords have problems with tenants than tenants have problems with landlords.

What the CAB report singularly fails to do is offer any sort of balanced view of the use of Section 21 Notices. The report is peppered with provocative images of tenants living in squalor. The title itself is inflammatory Warning: Your home is at risk if you dare complain hardly gets the report off to a balanced start. Imagine the outcry there would quite rightly be if landlords published a report called Warning: Your home is at risk if you let it to DSS tenants.

We all know that some landlords don’t care about their properties or their tenants. We also know that some tenants have no respect for the landlord’s property, but that isn’t even mentioned in the CAB report. To tarnish all landlords with an imaginary brush in order to deal with this problem should weaken the CABs claims. However, if landlords do nothing they will get away with this unwarranted attack.

As we said in the previous post on this Blog, the implications of a change in Section 21 Notices are huge. We are currently discussing these implications with landlords, tenants, lenders and others in order to present a full picture. We will report our findings shortly on this Blog.

Meanwhile, we ask landlords to join us and help prevent any changes to Section 21 Notices before a full, frank and open debate has taken place. To do this please sign our Petition Against Changes to Section 21. Please also tell other landlords about this petition.

So far just 2 landlords have contacted us to tell us that they do not support the aims of our petition, whilst nearly 1,300 have already signed. We believe that unless landlords act now and in great numbers the CAB and others are likely to push through changes to Section 21 Notices that would adversely affect landlords, tenants and potentially the whole UK housing market.

Please sign the Petition Against Changes to Section 21 Notices


Monday 8 September 2008

Win £1million of property for just £25

A landlord has decided to raffle his £1million portfolio to just 88,888 entrants in a novel competition.

Avtar Chagger's website PropertyCompetition.com has full details of the competition where one lucky ticket will win property in Leicester, Birmingham and Aldershot with a rental income of £3,500 per month. At the same Avtar will be making substantial donations to various charities.

Good luck to all those who enter.

The Law Commission - Encouraging Responsible Letting

The Law Commission recently published their final report on housing. The recommendations made in the report could be become law as early as next year. Their press release reads:


The report, Housing: Encouraging Responsible Letting, follows wide consultation with both landlords and tenants. It focuses on improving the overall coherence and stability of the current private rental framework in a cost-effective way.

Based on the principles of smart regulation, the Commission recommends a programme of staged reforms designed to promote self-regulation and enhance voluntary initiatives already in place in England and Wales. The proposals include

Creating a housing standards monitor (for each of England and Wales) for the private rented sector

Establishing an associated stakeholder board to which representatives of all sides of the private residential rented property sector are appointed

Developing a single code of housing management practice for landlord

Making landlord accreditation schemes available in every local authority area

Launching a pilot programme for home condition certificates

The Commission proposes that independent evaluation and development of appropriate incentives to make the programme attractive to landlords should supplement these initiatives.

Professor Martin Partington, who was the Commission’s Special Consultant on Housing Law in charge of the project, said

“Too much privately rented property is in a poor condition and poorly managed: the law does not operate as Parliament intended. An increasing number of people are deciding to rent in the current economic climate making it more important than ever that the private rented sector takes its place effectively in the housing market.

“The recommendations in our report are aimed at benefiting both landlords and tenants by enabling them to use existing legal processes more productively thereby more fully realising the intended impact of housing legislation. Implementation of these reforms would not only improve rental conditions for tenants, but also help to build the reputation and professionalism of landlords. More broadly, it would encourage institutional investment in the provision of rental accommodation, enhancing the important role of this sector in the wider economy.”

For more information click here The Law Commission Report.

Monday 1 September 2008

A Bigger Threat to Landlords than the Credit Crunch

If campaigners from the Citizens Advice Bureau get their way Buy-to-Let could face it’s biggest challenge since Assured Shorthold Tenancies came into being in the 1980s.

When the Housing Act 1988 came into being it gave landlords the right to obtain vacant possession of their property under Section 21. The ability to obtain vacant possession automatically was crucial to lenders entering the Buy-to-Let market and was the key to the huge rise in the number of landlords.

The Citizens Advice Bureau (CAB) along with others like some MPs, Shelter, the Chartered Institute of Environmental Health and tenants associations are now pressurising Government to significantly water down Section 21.

Debbie Crew from CAB Merseyside, who won the Sheila McKechnie campaigning award for Consumer Action for her work on retaliatory eviction, said “we want a change in the law ….by putting restrictions on the use of Section 21”.

David Harker, Chief Executive CAB, offered support saying “a change in the law would end the misery endured by many vulnerable people”.

Adam Sampson, Chief Executive of Shelter, added his weight saying “Shelter strongly supports this campaign”.

The Citizens Advice Bureau claims to have spoken to 198 local authority environmental health officers and have arrived at the conclusion that “98% of those questioned said they agreed that legislative changes concerning Section 21 needed to be made”. A Chartered Institute of Environmental Health statement said “(the CIEH) is happy to support the recommendations”.

Since the CAB campaign started they have been joined by some political heavyweights. South Shields MP David Miliband and his Jarrow counterpart Stephen Hepburn have offered their support to the campaign. They are both writing to Housing Minister Evette Cooper and Hazel Blairs, Secretary of State for Communities and Local Government, to raise their concerns.

The reality is that this campaign is gaining strength and landlords ignore it at their peril. We believe that if Section 21 is in any way weakened then lenders will start to pull out of the market. The result of that will be that landlords will start to sell and the number of rented properties will drop significantly. Landlords may find that they are trying to sell property in a depressed market and it could cost them a fortune.

If that happens it is not difficult to imagine a situation where the whole Buy-to-Let market could implode with thousands of landlords trying desperately to sell their properties.

Those who say it will never happen probably said the same thing about HMO licensing, tenant deposit schemes and Energy Performance Certificates. All of these changes came about because of pressure from organisations like CAB and Shelter. The fact is that the CAB and Shelter are highly skilled at campaigning. Can the same be said of landlords?

There are over 800,000 private landlords in the UK and probably less than 30,000 belong to any landlords organisation. The fact is that landlords struggle to compete with the organisational and campaigning skills of Citizens Advice, Shelter and similar bodies.

We believe that landlords must take a stand – in fact we believe that a change in Section 21 will affect the whole industry, landlords, letting agents and tenants alike.

NetRent.co.uk has started an on-line petition against any negative changes to Section 21. We strongly urge everyone in the lettings industry to join us and sign this petition now.

Act now, sign the petition and help us in this fight to protect the fundamental right of landlords to own and manage their own property.

Thursday 28 August 2008

New Buy to Let loan numbers fall


According to The Council of Mortgage Lenders (CML) new buy-to-let loans fell to 144,600 in the first half of 2008, an 18% dip compared with the previous six months, and the first fall for three years.

CML director general Michael Coogan said "We expect the rental market to remain underpinned by strong demand, partly because some people who would like to buy a home are being forced to carry on renting for now".

But the decline was not as steep as in the wider mortgage market - which saw a 28% drop in home loans in the first half of 2008 compared with the previous six months.

Some 0.16% - or 1,800 out of more than one million - buy-to-let homes were repossessed during the first six months of the year, up from 0.11% during the previous six months.

The average loan was an 83% loan-to-value offer during the first six months of the year.

Tuesday 26 August 2008

CORGI regulations for flats

Corgi have issued regulations to its members that from 1st January 2008 all gas cooking appliances for use in flats and other multi-dwelling buildings cannot be installed unless they contain Flame Supervision Devices.

What is a Flame Supervision Device.?

A Flame supervision device is part of the gas burner system and detects if the flame is extinguished and cuts off the gas supply.


What type of properties does it affect?

The description from Corgi states Flats and Multi-Dwelling buildings. This includes buildings that include a number of individual dwellings for domestic purposes only together with dual-purpose properties such as flats above shops and offices. It does not include properties that are for commercial use only or detached, semi detached, terraced houses and houses with loft conversions.


What happens if a Corgi engineer identifies a gas cooking appliances installed in a flat or multi-dwelling building without a suitable flame supervision device that was installed prior to 1st January 2008?

The appliance will be classified by the engineer as "Not to Current Standards". This does not mean that the product needs to be changed immediately but is to advise the consumer that when when they come to change their appliance that they need to buy a model with a Flame Supervision Device.


Does this apply to dual fuel models?

Yes. It applies to anything that has a gas hob or oven


Does this apply to built in gas ovens?

Yes
For more information please visit the CORGI Landlords website

Monday 18 August 2008

Energy Performance Certificates


From 1st October 2008 landlords offering property for rent in England and Wales will be required by law to provide prospective tenants with an Energy Performance Certificate for their property.
Landlords with property in Scotland will have to provide an Energy Performance Certificate from 4th January 2009.
The certificates (EPCs) will have to be provided free either when (or before) any written information about the property is provided to prospective tenants or a viewing is conducted. They will not have to be provided if the landlord believes the prospective tenant is unlikely to have sufficient funds to rent the property or is not genuinely interested in renting, or the landlord is unlikely to be prepared to rent the property to the prospective tenant.

A new certificate will not be required on each let since, in the case of rental property EPCs will be valid for 10 years.

The requirement is being introduced to comply with the EU’s Energy Performance of Buildings Directive (EPBD) which applies to all property, including rented property.

Failure to comply will mean you are liable to fines and loss of ability to let your property.
Don’t wait until the rush starts in October. EPCs last for 10 years. Save money and time by acting now.

Through NetRent.co.uk you can order Energy Performance Certificates at a discounted rate of just £60.00 plus VAT for all properties up to 6 bedrooms. This offer ends on 31st August 2008.

Take advantage of this special offer now to make considerable savings. The Sunday Times recently quoted the Residential Landlords Association as suggesting that an EPC is likely to cost approximately £200 once the law comes into effect. In addition demand will be high. An important factor to consider is possible delays caused to the landlord in the marketing their properties for rent because they do not have an EPC in place. It will be a busy time for Energy Assessors and so delays in turn around of the EPC could result in a loss of rental income.

For more information ring us now on 01352 759988 or email us at enquiries@netrent.co.uk or complete this form Energy Performance Certificates.
To see more information from the Government please visit their website Department for Communities and Local Government.

Thursday 7 August 2008

Scams Affecting Landlords


In our last Newsletter we highlighted some of the scams designed to catch out unwary Landlords. We also asked Landlords to let us know if there were any particular scams they had been subjected to. The response was interesting to say the least. A whole range of scams are targeted at Landlords from the obvious to the not so obvious.

There appears to be a lot of faith ministers keen to send their daughters to the UK, along with promises of various cheques drawn on a range of both UK and foreign banks. One Landlord caught by this scam found the cheque bounced weeks after he thought it had cleared his account.

A variation on this is the number of models claiming to be coming to the UK to further their careers – including a number quite willing to send Landlords their photos.

As we reported in the last Newsletter there has been an increasing number of Landlords who have found their property used as cannabis farms. Quite apart from the damage that these ‘tenants’ cause to your property it seems that some local authorities and police forces have chosen to be robust in their dealings with the Landlords concerned. One landlord reported to us that well over £7,500 of damage had been caused to his property plus loss of rent.

Several Landlords contacted us to tell us about problems they have had with guarantors when the tenants defaulted on their payments. All of this is in addition to the more run-of-the-mill problems that Landlords can have with some tenants. For example, one Landlord told us that the tenant had stolen all the internal doors. If you have been offered half a dozen wood veneer doors we know a Landlord who wants them back!

Unscrupulous Letting Agents have also caused problems for Landlords. One so-called agent who arranged tenants for a Landlord failed to credit check the tenants, despite billing the Landlord for this service. The result was 6 months lost rent and considerable costs in removing the tenants. None of this money could be recouped from the agent. On the other hand there are also a great number of highly reputable Letting Agents who do a tremendous job for Landlords.

There is no easy solution to these problems. We strongly advise all Landlords to check the tenant completely before handing over the keys to an investment often worth hundreds of thousands of pounds.

NetRent.co.uk has just launched a brand new service called Check My Tenant. This service is provided through Experian, the leading credit referencing agency. Experian have over 25 years experience and offer you a greater selection and quality of data than any other credit referencing agency. They are a global company offering market leading information and fraud prevention.

Through Check My Tenant you can reference your tenants for just £14.50 + Vat for an Instant Report and £24.75 + Vat for a comprehensive report. This service is open to all Landlords and Letting Agents. It is available on-line right now. Most tenants expect to pay you for their credit reference and we strongly advise every Landlord and Letting Agent to use this service.

If you have any immediate questions please click Check My Tenant or ring NetRent.co.uk on 01352 759988.

The Truth About Buy-to-Let Mortgages


Figures released by the Bank of England show that the banks provided fewer than 42,000 new mortgages in May down a staggering 64% from May 2007. These are figures for all mortgages, not just Buy-to-Let.

The recent bleak news from major housebuilders like Persimon, Barratt, Taylor-Wimpey, Redrow and others have highlighted the stark fact that whilst there is a demand for homes and a willingness from would-be purchasers to buy there are simply not enough reasonably priced mortgages to satisfy the demand.

The Royal Institution of Chartered Surveyors claimed that transactions in the housing market are at the lowest for 30 years. They blamed the lack of mortgages as a major cause. So what is the truth for Landlords wishing to either raise a mortgage or re-mortgage an existing property?

Major lenders like Paragon and Mortgage Express have effectively stopped lending. Paragon have arrangements for existing borrowers such as a LIBOR plus 1.75% deal but their well documented problems mean they are giving existing borrowers coming off fixed deals very few options. Mortgage Express (part of the troubled Bradford and Bingley) will lend in theory but in practice it’s tempting to argue that they are pricing themselves out of the market. One of their best deals is 6.74% with a 2% arrangement fee – but only on loans of less than 75%. Over 75% the rate jumps to 7.74% complete with the 2% arrangement fee.

Some good news is beginning to filter through. Birmingham Midshires (part of the HBOS group) reduced it’s margins by 0.2% last week and now offers a 6.09% deal with 2% arrangement fee – but only up to 60% loan to value. Mortgage Works (part of the Nationwide) is offering a 5.39% 2 year discount mortgage up to 70% loan to value but with a 3% arrangement fee.

The major banks are all very cautious and the market remains fearful of further fallout from the American Sub-Prime market. The troubles exposed in the delightfully named US lenders Fannie Mae and Freddie Mac are hardly likely to increase confidence, it will just make things worse.

In the midst of all this confusion and uncertainty the recently released Modern UK Housing Market Report showed that UK rents have risen 40% since 2000 and predicts that rents will rise between 10-15% in 2008/9.

At NetRent.co.uk we are seeing rents rising, sometimes quite steeply, as tenant demand continues to increase. The truth seems to be that many lenders have taken the opportunity provided by the Credit Crunch to significantly increase not only their interest rates but especially their charges.

For Landlords with low loan to value borrowing there are a range of options to choose from. Landlords with higher loan to value borrowing should concentrate on cash flow and accept that any switching of mortgages is likely to incur significant costs in arrangement fees. According to industry people we have spoken to in the last few days the expectation is that this situation is unlikely to change significantly before Autumn 2009.

Any Landlord wishing to review their lending should seek advice from specialist Buy-to-Let Advisers. A word of warning though. It is probable that the number of Financial Advisers specialising in Buy-to-Let will drop quickly. We have already seen a number leave the industry and this trend is likely to increase.

In the midst of all this turmoil the Spanish banking group Santander, which owns the Abbey in the UK, launched a £1.3 billion takeover bid for Alliance & Leicester. Clearly someone thinks that the banking sector has a future. Would it be too cynical to believe that whether times are good or bad the banks always seem to do well?

For more information about available mortgages please click Mortgages through NetRent.co.uk or telephone us on 01352 759988. Please note that not all the available deals can be shown on our website because of daily market changes. For immediate assistance and advice please ring us.