The Government has announced it wants to ban letting agents from charging fees to tenants.
This may seem like a good idea at first glance, helping to save tenants money, but industry experts here at Nock Deighton say it is more likely to end up costing them more in the long-run.
Dawn Clarke, Nock Deighton’s director of property management and lettings, says the announcement by the Chancellor, Philip Hammond, in his Autumn Statement could give people renting a house in Shropshire an unwelcome surprise.
She says: “This is devastating news for letting agents and is very unlikely to have any benefit for tenants in the long-term.
“The fees which the Government wants to ban cover a wide range of costs, and those will now have to be met by agents elsewhere.
“The vast majority of these fees pay for a range of critical checks and surveys, and these costs will most likely be passed on to landlords who will raise rents to pay for them - ultimately increasing costs for the tenant.
“We would agree with the Association of Residential Lettings Agents (ARLA)'s view that this is likely to have a knock-on effect on the rental property market.
“As usual, this is a policy designed to stop exploitative agents taking advantage of tenants which will actually penalise good letting agents who provide an excellent service to both landlords and tenants.”
As a landlord, having access to good tradespeople is a must - but if you are new to property management, how do you go about finding someone you can rely on?
Dawn Clarke, director of lettings and property management here at Nock Deighton, has more than 30 years’ experience in the industry. And as regional representative of the Association of Residential Letting Agents, she knows how important it is to keep a rental property in a good state of repair.
Here are Dawn’s tips for finding a good tradesman to help you keep on top of the maintenance of your property.
“People who have owned rental properties for a long time have usually built up a good contacts book of plumbers, electricians and builders,” she says.
“As an experienced property management company, we have our own links with tradespeople, so landlords working with us have the benefit of that.
“Some landlords prefer to make their own contacts, which is of course absolutely fine, but people new to property management are often nervous about finding the right tradespeople to work with.
“There are a number of things to bear in mind. Firstly, word of mouth is always a good starting point, so ask your friends and local businesses who they would recommend.
“If you don’t live in the same area as your property, try looking for Facebook groups local to that area - many towns and certain areas of Telford for example have their own discussion groups where people are happy to talk about their experiences with local tradespeople.
“Then there are the commercial internet review sites, like Checkatrade.com, which are always worth checking out.
“A key bit of advice we give to our landlords is that it’s always good to have at least two people in your mind for each job - if you rely on one plumber and they are on holiday when the boiler breaks down you will be in a sticky situation.
“Having more than one contact for each trade will pay dividends in the long run.
“Ultimately, it’s about experience and asking for advice. Join your local landlords’ association, and ask your letting agent - sourcing good tradespeople is part of our daily job, so if in doubt, just pick up the phone and ask!”
For more advice about property management and lettings, contact the team at Nock Deighton on 01952 290163.
With interest rates being at an all-time low, shopping around for a good rate of return from a bank or building society is somewhat difficult.
If you’re very lucky, you might be able to achieve a 1% to 2.25% return on your money and it sometimes feels like you might as well put it in a suitcase under the bed!
If you are downsizing and wish to release the equity from your property what are your options - stocks or shares? Rates of return on these types of investment can typically be around 3.5% to 4.5% but that is of course if the investments are performing well.
If you have considered property but don’t want the hassle then perhaps you should rethink as there may be a solution…
It is not unrealistic to expect a net return of up to 6% on a rental investment property, and this is not taking into account the capital growth of the asset. A three-bed semi-detached house somewhere in Shropshire might cost £150,000 to buy, and if you receive a rent of £775 per calendar month, that is a 6.2% return. With management fees typically being around 10%, this means you can expect a net yield of 5.58%.
Rental prices are remaining strong with a significant amount of activity in this sector making it a more and more attractive proposition. The “housing crisis” in the UK has fuelled this activity and it shows no sign of changing significantly with the Government’s new stance on the Help to Buy scheme.
At Nock Deighton we have an established Property Management Department who will take that hassle of renting away from you. We ensure that each of the 700-plus properties that we manage has a dedicated property manager, one person who is responsible for the day to day management of your investment and reports directly to you.
Each of our regional offices has a team who can inspect, market and let your property and then pass on the management to our Property Management Department.
Why not get in touch with our regional offices to speak with our teams. They are always pleased to share their expert knowledge and to work with you to see how we can tailor our services to suit your requirements.
The controversial ‘Right to Rent’ legislation has recently come into force, creating another legal hoop for landlords to jump through.
The new rules mean it is the landlord’s responsibility to ensure their tenants can legally rent a property in the UK. So landlords need to check their prospective tenant’s legal documents which show they have a right to live in the country.
Dawn Clarke, head of property management and lettings at Nock Deighton, said landlords should be doing these checks as standard procedure anyway but the new legislation placed an extra burden on them.
She said: “The Right to Rent legislation has certainly created waves in the industry because many feel that landlords are being put in a difficult position.
“The legislation states that landlords are responsible for ensuring that their tenant’s documents are genuine, and people opposing the scheme say it’s unfair to expect landlords to be 100 per cent sure that a passport is not a forgery.
“We have always advised our landlords to take copies of passports and other legal documents before a tenancy is agreed, so if you already doing these checks as a matter of course the new legislation should not be too onerous.
“However, if anyone is concerned they are welcome to give us a call for more advice.”
The property management and lettings team can be contacted on 01952 290163.
If you are a landlord, your rental property is a big investment so it makes sense to keep it in a good condition, which will not only help to retain its value but also cut down on the amount of costly repairs in the future.
The property management team here at Nock Deighton manage over 700 properties across Shropshire, and here are their tips on how to keep on top of things.
Invest time and money
Make sure you dedicate enough time to keeping your property in good condition and accept that you will have to pay for its upkeep, which will save expensive repair bills in the long run. A good tip is to put aside a few months’ rent to cover emergencies, or if your tenant unexpectedly leaves.
You get what you pay for and with property maintenance, cutting corners or buying cheap materials often works out more expensive in the end. Make sure you get plenty of quotes from reputable tradespeople so you are getting the most cost-effective job. Websites like checkatrade.com are a good place to start.
Build good relationships
It’s highly likely that you will work with the same tradespeople regularly, so keep your relationships friendly and productive. Try to build up more than one contact in each trade, so you have someone to fall back on if your regular person is not available.
Don’t be tempted to bury your head in the sand and hope a problem will sort itself out. It won’t go away and will just end up costing you more. Following the introduction of new legislation this year, if don’t respond to a repair issue that your tenant has reported in writing within a reasonable timescale, you may not be able to serve a Section 21 Notice.
Similarly to the last point, don’t avoid servicing boilers and cookers. They need frequent servicing to keep them legally safe and reduce the chances of mechanical problems.
Carry out inspections
Make sure you know how your property is looking by inspecting it regularly. You can’t rely on your tenants to carry out basic repair jobs as they sometimes won’t know how to, or will be worried that they might make things worse. They also won’t always tell you about a problem, so don’t leave your investment out of sight and out of mind.
For more helpful tips about property management, call the Nock Deighton lettings team on 01952 290163.
Did you know that the property management team here at Nock Deighton manages more than £90 million worth of properties across Shropshire and Kidderminster?
And it’s not enough to meet the current demand from investors looking to get into the buy-to-let market.
We manage more than 600 homes, but changes to government legislation means they are in high demand.
Dawn Clarke, Bridgnorth and Telford lettings and property management director, said: “The government’s pension reforms mean many people are looking to invest in housing as a way of ensuring they have money put aside for later in life.
“This, combined with the continuing growth of the buy-to-let market, means we are constantly on the look-out for more properties.
“The ones we manage vary widely, from large eight-bedroom properties which have acres of ground in rural Shropshire, to a one or two-bedroom flat in Telford town centre - we can help manage any kind of investment property and they are in demand.
“On average they add up to more than £90 million worth of housing, but demand is so great we are eager to hear from people who have a property which they would like to rent out.”
Traditionally there is a pre-election slowdown in the property market in the run up to a general election - but this year saw no such easing in our area.
Dawn said despite slow markets elsewhere, Shropshire had been particularly busy - especially in the Telford and Bridgnorth areas where demand is very high.
For Nock Deighton 2015 is looking to be one of the busiest years in some time because for those who did wait until a government was in place, they are now finding themselves in a packed market.
“Potential buyers have been waiting for the right property to come along so we did not see any slowdown in the run up to May,” Dawn added.
“But naturally we did also see a significant surge of activity when the election was over - the Shropshire buy-to-let market is the busiest it has been in the last five years.”
Nock Deighton has offices in Telford, Ironbridge, Newport, Bridgnorth, Ludlow, Cleobury Mortimer, Shrewsbury and Kidderminster and provides a full range of services for anyone buying, selling or renting a house in the area.
Have you ever thought about being a landlord?
The property market in Shropshire - and Telford in particular - is ripe for buy-to-let investors at the moment, and you can make a really strong return on your investment with the right property.
But as with most things in life, managing a property can be time-consuming and complicated, which is why it’s important to have a good team in place to help.
Director of lettings and property management at Nock Deighton, Dawn Clarke, spoke to a group of would-be investors at an event recently to give them some advice about the pros and cons of being a landlord.
And we thought we would share her tips for people looking to buy a property to let in Telford, or anywhere else in Shropshire, on some Nock Deighton blogs.
In this blog, Dawn talks about location. Dawn, it’s over to you…
“Telford is a great place to rent property because there is a good range of property types available and so much movement in industry – there is always a high demand for properties to rent in Telford.
“Returns on investment can range between four and ten per cent gross, depending on the type of property and its location, which means there are options for a wide range of investors.
“The most important aspect of a rental property is its location - think about the kind of tenants you want to target and buy in that area.
“For instance, if you are looking for professionals, a tired-looking house in walking distance of a train station, which can be spruced up relatively easily, is likely to be more of a sound investment than a recently-refurbished house in a town without a train link.
“We often speak to people who bought a house in an area they might like to live in themselves without thinking about the area in a dispassionate way.
“It might sound obvious but you need to remember it won’t be you living there - you need to buy the right house for your potential tenants, and then ask yourself ‘would I like to live there if I were them’.
“We have years of experience in letting and property management in Shropshire and very happy to talk to potential investors about suitable properties and expected returns, before they make any decisions - just give us a call or pop into the office for a chat.”
Dawn and her team can be contacted on 01952 290163.
The buy-to-let market is enjoying a resurgence, with letting agents at Nock Deighton reporting a major rise in activity in recent weeks.
The teams in Telford and Bridgnorth in particular say that the first three months of this year have seen a 60% rise in investors looking for suitable properties compared to last year.
Dawn Clarke, lettings director, said Shropshire was a popular place for people looking for buy-to-let properties.
She said: “We have seen a noticeable rise in people buying rental properties and there is certainly a clear demand in Shropshire.
“Telford and Bridgnorth are particularly popular due to the employment opportunities in the area, as well as being in easy reach of Wolverhampton and Birmingham. Demand is outweighing supply, and there is always a constant flow of enquiries coming through.
“We have tenants waiting for the right property, so our advice for anyone looking to buy or sell a property which might be suitable to rent is to go for it - the market is buoyant.”
With 30 years’ experience in the Shropshire lettings market, Dawn can provide expert and valuable advice on the most suitable properties to invest in, expected rental income and how best to prepare your property for letting, with no obligation.
So if you are thinking about letting your home in Shropshire, please get in touch.
More than half of UK tenants have problems with their landlords, with repairs taking longer than they should and some not being done at all, according to a new report.
The Shropshire-based regional spokeswoman for ARLA (Association of Residential Letting Agents), Dawn Clarke, said unlicensed letting agents were “tarnishing the industry’s reputation”.
The association has just published the findings of a report into the satisfaction, or otherwise, of tenants, and Mrs Clarke said the results were worrying.
She said: “The main issue that came from the research was that people are having to wait too long for problems to be sorted by their landlord or letting agent. The average wait for repairs to be be carried out was 36 days, and one in seven tenants said their reported problems never got fixed at all.
“This kind of service is not acceptable, which is why we are urging tenants to make sure their letting agent is licensed. The survey found that two-thirds of people did not even consider whether their agent was licensed, which is worrying.
“It’s important that people look for the ARLA logo because in order to be licensed, letting agents must have the highest standards of professionalism and customer service.”
Mrs Clarke, who heads up Nock Deighton’s residential lettings team, said rogue letting agents were a still a problem in the property industry.
“To be frank, they are tarnishing the industry’s reputation and we need to crack down on them,” she said. “The best way to do that is by raising awareness among house hunters so they only use licensed agents to ensure they get the best possible service.”
For those who didn’t consider whether their agent was licensed, more than half (54%) said it didn’t cross their mind to check, while nearly a quarter (23%) did not know that letting agents should be licensed. One in ten (12%) wrongly assumed that all letting agents were licensed so did not know the difference in standards they can expect.
David Cox, managing director of ARLA, said: “Our home is our castle, and there is no reason for it to not be fit for a king. Just because you rent a property it should not impact your levels of enjoyment, especially as there is such a high price to pay for renting.
“For anyone looking to rent, there are basic boxes to tick to ensure you receive the best possible end result – and this starts with choosing your letting agent and landlord. Choosing an unlicensed letting agent could leave tenants with a long list of problems.”
People looking to rent can expect to face fierce competition for privately rented residential property, as the number of landlords selling property exceeds the number buying for the first time in four years.
The third quarterly report from the Association of Residential Letting Agents (ARLA) has found that the demand among tenants had increased but the number of houses available for rent had decreased.
The report found that over a third - 68 per cent - of respondents reported more would-be tenants than properties available.
This figure represents the third and biggest successive increase, from 46 per cent in quarter three of 2013, to 54 per cent in quarter one of 2014, and 59 per cent in quarter two 2014 - meaning an increase of nine percentage points between the second quarter and the third, and the largest increase since numbers were on the up.
Director at Nock Deighton, Dawn Clarke, who is ARLA’s regional representative for Shropshire says the figures are being reflected in the county.
"The results from ARLA which show that the demand has significantly soared is not only the picture across the UK but also the picture here in Shropshire too," Dawn says. "Our lettings department has been extremely busy and cannot get enough properties quick enough for the tenants needing them.
"We have seen many landlords who had a vast portfolio of buy to let properties decide to sell them. However some of them have since seen the demand and decided to put them back into the rental market.
"If people have money to invest, the property market is certainly one to think about at the moment and these figures back that up. If someone has a house to let, it is often let before any marketing of that property is carried out as we have people waiting for such properties."
She urged Buy To Let investors to invest their money to take advantage of the decreasing stock levels available after the report found that the number of landlords investing in property shrunk by eight per cent in the last quarter, from 35 per cent to 27 per cent.
At the same time, the number of landlords selling their Buy To Let property increased by five per cent from 27 per cent to 32 per cent.
As a result, the relationship between buying and selling has reversed, with the number of landlords selling property now exceeding landlords buying property for the first time in four years.
Nock Deighton has offices in Ironbridge, Ludlow, Telford and Bridgnorth. For information or advice call the lettings team at Telford on 01952 290 163.
People living in rented properties in Shropshire need to ensure their letting agent is authorised to a redress scheme following the introduction of new regulations.
From October 1, anyone carrying out “lettings agency work” in England must belong to a Government-authorised redress scheme or face a fine of up to £5,000.
Dawn Clarke, head of our residential lettings team, is regional spokeswoman for ARLA (Association of Residential Letting Agents), and gives this advice:
“The reference to ‘lettings agency work’ includes anyone who is a letting agent, a relocation agent or a property management agent. All of these people must now belong to one of three schemes otherwise they are not able to continue in their role.
“The three current schemes include the Property Redress Scheme, the Property Ombudsman, and Ombudsman Services - Property.
“The lettings industry is quite rightly highly regulated, which is important when you are dealing with properties and people’s standards of living.
“It is vital that tenants are aware of the deadline and they can then ensure they are using a letting agent who is meeting all of the standards needed.”
For more information, call Dawn on 01952 290163 of visit www.arla.co.uk for details about the Association of Residential Letting Agents.
While there’s a growing trend towards more flexible short-term commercial property leases lasting between five and ten years, for some firms, a traditional 25-year long-term lease is still the most attractive option.
Within such leases, rent reviews are commonly inserted at every third or fifth anniversary of the lease, to ensure that rents are adjusted to reflect the current market level, and are usually made on an ‘upwards only’ basis. With rent still taking up a significant proportion of a company’s day-to-day operating costs, it’s essential that business owners take action to make sure they aren’t suddenly hit with a substantial and unexpected increase.
Tenants should start putting a strategy in place around 18 months before the rent review date as stated in the lease, starting with the appointment of a qualified Chartered Surveyor as their representative.
A Chartered Surveyor will examine the lease and any other relevant documents to confirm the time limits within which the tenant must respond to notices instigating the rent review and ensure compliance. This is a key starting point, because in certain cases, businesses have ended up paying dramatically inflated rents simply because they failed to respond within the specified time limit.
The Chartered Surveyor will also carry out a measured inspection of the property, and using their local knowledge and industry databases – including information usually inaccessible to the tenant –carry out in-depth market research and analysis into the cost of rents in the local area, prior to entering into negotiations with the landlord or their representative. Landlords will often base a proposed increase in rent on the most ‘appealing’ properties in an area, but these may not actually reflect the local rent levels – ‘new’ tenants are often given incentives so actually pay much lower rents than those advertised, while differences in lease terms such as restrictions on use and length of unexpired lease should also be taken into account. Chartered Surveyors can highlight these factors during the negotiations, and may be able to agree a reduction in the proposed rent, or even a nil increase, which could save the tenant thousands of pounds.
If a new rent cannot be agreed, the lease will include a procedure to settle any disputes. At this point, the Chartered Surveyor will appoint an independent third party as an arbitrator to help bring a speedy solution to proceedings.