A Government move to allow automatic direct payments of housing benefit to landlords, has been welcomed by the Residential Landlords’ Association (RLA).

It’s still early days with this but it’s a step in the right direction.  The following was reported by the RLA yesterday.

On the day the Government’s first flagship universal credit pilot scheme went live in Ashton-under-Lyne, a circular to all housing benefit staff revealed that automatic direct payments to landlords will now be allowed in the pathfinder areas.

The policy change was tucked away on the last page of an obscure circular published by the Department of Works and Pensions (DWP) yesterday. Universal credit expert and RLA trainer, Bill Irvine, spotted it and immediately informed the RLA.

The circular states, “Landlords can refer rent arrears cases to Universal Credit; those which are under 2 months rent will trigger Universal Credit to contact the claimant to discuss their non payment as part of the Personal Budgeting Support process, where as those with over 2 months arrears will be switched to direct rent payment automatically and relevant budgeting support activity arranged subsequently.”

The news that direct benefit payments to landlords will now be triggered automatically following two months of arrears represents a welcome change in policy by the Government, which had previously insisted that direct payments to landlords would only be allowed in exceptional circumstances and even then not automatically.

www.justdoproperty.co.uk

Here are some ideas I have put together to help you maximise your property investment.  Being a Landlord myself for the last 13 years, it now feels like quite a long road.  When I first started property investment seemed like an easy vehicle to make money, this was of course due to the property market going up and up.

The refurbishment and then the renting out of the property seemed easy compared to the market today. Students would accept  the regulation courdroy blue carpets and basic amenities, and the professional market thought a dishwasher was a luxury!  Now students also want a decent level of accommodation and  the professional tenants want something a bit special! Whether we find ourselves as an accidental Landlord or we chose this route of investment, we need to avoid those voids and maximise our returns. Some pointers which make very good sense in our current market:

• When increasing the rent, ensure the tenants are given a feasible reason for this increase. For example you may include some utilities in your rent, and with fuel prices up, this would be a legitimate reason..
• Don’t increase the rent so much that it is not affordable, and make sure it is comparable to the immediate local market and of a similar standard.
• Visit your property every quarter, minimum. if you employ the services of letting agency, ensure that this is done and you are informed of any issues. A tenant may notice a leak but not report it until the flat downstairs reports a massive brown wet stain on their ceiling! Noticing issues early limits the big repair bills.
• Attract your target market. Make your property fit the needs of tenant. This will ensure tenants remain at the property longer and won’t feel the necessity to move on. You will have higher occupancy levels.
• Minimising void periods. Advertise the property to let ASAP, don’t delay! Make sure the rent is right, too much and you won’t get any interest. If you are made an offer weigh it up sensibly. Have they offered £50 -£100 less, but want to move in back to back with the last tenant, then Think about taking it, how much other interest is there? It is a false economy to hang out for the higher rent and miss a months rent you will never get this money back.
• Note feedback from prospective tenants who have viewed and tenants who have moved out.  Why are they leaving? Is there something that they think would improve the accommodation? Listen to feed back it counts this is your audience.
• Make sure your tenants know what is expected of them. Draw a list of things which the landlord will not pay for I.E blocked pump on the washing machine (pockets not being emptied) blocked kitchen sink drain (from foodstuff).
• Before calling out the electrician etc. talk with the tenant on the phone, get as much info as possible. May be it is just a trip switch? Or something else the tenant can sort themselves. Teach tenants how to do re-light the pilot light for example. Or if you are handy perhaps you can do much of the basic maintenance yourself.
• Treat tenants well build a rapport. Just not too well that they ring you at 2am drunk when they have locked themselves out of the house!! Some want you as a surrogate mother!

Thanks to Tara Meeks of Railton Meeks for providing this article.

www.justdoproperty.co.uk

September 2012 marked the start of the first academic year where students could pay anything up to £9,000 per year on tuition fees. As we head towards the New Year, when students would typically start looking for their second year accommodation, Townends estate agents say there has been a noticeable impact on the student rental market and landlords will have to make changes if they want to avoid lengthy void periods.

Areas within which Townends operate, such as Guildford and Egham, not only command some of the highest student rent, but are home to the University of Surrey and the Royal Holloway, both of which are charging students the maximum £9000 fee.  Caroline Kavanagh, Managing Director of Townends Lettings & Management comments “We have noticed a real drop in the number of students looking to secure accommodation for next year, but with fees nearly three times as much as previous years, it’s hardly surprising that those that can, are having to sacrifice the independence of sharing a student let and remain living at home with parents.”

The real impact of this will not hit student landlords until September 2013, as most will have secured tenants for this academic year back in January, which will see their properties tenanted until next summer.  With demand lower than usual for next year, Caroline says landlords should be considering their options. “These are:

1. Set a timeframe by which you are prepared to market your property to students during the prime letting period in the New Year. If your property is still vacant consider other options for your property.
2. Consider renovating the property to bring it up to the standard of a professional let which would give it wider appeal to the likes of families, young couples or professional sharers. The existing condition of student properties rarely entices the average tenant.
3. Renovate the property to appeal to international students who are less affected by the increase in tuition fees and still prepared to pay premium rents as long as the property is of high specification and within close proximity to the university.
4. Consider selling the property and using the money to purchase an alternative buy-to-let investment with greater appeal such as a modern, purpose built two bedroom apartment.”

Some landlords are reluctant to change their properties to ‘Professional lets’ because they don’t typically command as much rent as when the property is let to a group of student sharers. According to Townends, landlords need to look at the bigger picture.  “A four bedroom property brought up to scratch with some renovation work and subsequently rented out for 6-12 months at a £1000pcm is far more profitable than a property which has previously let for £1400pcm, but now faces the possibility of remaining empty for an entire academic year” says Ms Kavanagh.

Unlike the rest of the private rented sector, student landlords have seasonal windows of opportunity to let their properties. Once students start the term, they are unlikely to move, so if landlords are concerned about securing tenants soon, they are advised to speak to an agent for advice on the best way to proceed.

www.justdoproperty.co.uk

Thanks to upad for providing this great article. For 50% off your first listing click here.

Finding a long-term responsible tenant who respects your property and pays promptly isn’t all about luck. There’s a science to it too.

Key Points:

Ensure you meet tenants personally before letting to them.

Professional comprehensive tenant referencing is essential.

If you have any doubt about tenants, secure a guarantor.

Showing tenants around your rental property is your chance to get a glimpse of the people who may be living in your property. It’s a good opportunity to engage your landlord instincts and if you meet the tenants up-front, it’s easier to build a robust long-term relationship.

Reference your tenants: comprehensive referencing shows you that the tenant can afford the rent, and that they don’t have a dubious renting history. Remember, Upad referencing is free for landlords, regardless of whether you have enlisted us to find tenants for you.

If you are still not certain that the tenants will always be able to pay the rent every month, acquire a UK-based guarantor, who will then be liable to pay the rent if they default. Guarantors are especially common for student tenants.

Ensure your tenant sets up their payments through a standing order. It means your tenants won’t forget to pay and you won’t have to chase. If you have found tenants and would like us to take care of this, just give us a call. We’ll also draw up the tenancy agreement and collect the first month’s rent.

Keeping in contact with your tenants will make them less likely to default on a rental payment. If they are having trouble receiving payments due to a short-term financial situation, then maybe a short-term payment solution can help. After all some cash is better than no cash – but be sure to make the terms of the payment solution clear, and follow it exactly.

Thanks again to upad for this article. For 50% off your first listing click here.

Nationwide survey shows 0% of landlords think that deposit schemes are designed in their favour

A startling zero per cent of landlords said they felt that deposit schemes are designed in their favour over tenants, according to a new survey released today by digital inventory platform, Imfuna. Just over half (54 per cent) said that they thought current schemes favoured tenants, while 35 per cent claimed that neither party benefitted from the schemes.

Letting agents also largely mirrored that sentiment; only 20 per cent said that the schemes, in their current format at least, favoured landlords and 52 per cent said the balance has been tipped in favour of tenants. And, a further 22 per cent felt that the schemes benefit ‘neither’ party.

The statistics have emerged after a nationwide survey of landlords, tenants and letting agents, and follow the announcement of the new Localism Bill which came into effect on April 6th. The new act means all landlords now face large fines of up to three times the deposit if it is not registered with a tenancy deposit scheme within 30 days. The ruling, passed by the Government’s Department for Communities and Local Government will also see landlords unable to seek possession of their property using a section 21 notice until the penalty is settled.

Imfuna creator, Jax Kneppers comments: “The survey presents a picture of landlord disenchantment with the deposit schemes. The fact that not a single landlord surveyed felt they were designed in their favour, shows that there is still some work to be done by all parties in order to democratise the inventory process and ensure that everyone involved feels they are supported in equal measure.”

Landlords beware, tenants be aware

Overall awareness of the deposit schemes was found to be high amongst landlords (99 per cent) and lettings agents (88 per cent). Tenant awareness levels were much lower however, only 43 per cent were aware of the schemes before their tenancy began.

This lack of knowledge translated into the take-up of the schemes; nearly half (49 per cent) of the tenants surveyed claimed they have not taken part in a deposit scheme.

Furthermore, 37 per cent of landlords, compared to 78 per cent of tenants, believe deposit schemes are an effective tool for minimising conflict between landlords and their tenants. Whereas just 19 per cent of landlords and 36 per cent of letting agents believe deposit schemes reduce the time taken over disputes, indicating the process still isn’t working.

Kneppers adds “The new April 6th ruling places an even greater emphasis on adhering to tenancy deposit schemes regulations. A comprehensive and robust inventory will help arm landlords with the necessary information and ensure they aren’t further penalised when it comes to the check-in / check-out process.”

Deposit schemes heavily relied on

The figures show that when disputes arise, people look to deposit schemes for help, 26 per cent of landlords, a further 26 per cent of letting agents, and the majority (57 per cent) of tenants believe deposit schemes provide a fair resolution when disagreements arise.

Despite deposit schemes being the preferred go-to for resolutions, some tenants still think they are getting a raw deal, 68 per cent felt dispute outcomes were in favour of the landlord / letting agent, compared to only 10 per cent of landlords, and 19 per cent of letting agents. Which shows some educational work needs to be done around how the schemes work amongst tenants.

Interestingly, nearly half of letting agents (48 per cent) and 30 per cent of landlords reported that they have settled individual disputes privately, without the aid of a deposit scheme.

Finally, and perhaps on the contrary to the views of many, 42% of landlords admit to having never had a deposit dispute with a tenant, with a quarter (24%) of letting agents reinforcing this.

Kneppers concludes: “There is also a case for making use of the technology and expertise available to make the difference in deposit disputes. This is a really exciting time for the property sector which is on the verge of a technological revolution, and we will all soon feel the benefits.”

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