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Snagging Report or Home Survey – Which Option Should Agents Recommend?

A property purchase is a major financial commitment and most residential home buyers are in need of professional help to understand whether the asset they have their eye on is indeed a good investment. Stories abound of ‘nasty surprise’ building defects or issues that can cost thousands of pounds to remedy after the transaction is completed.

Independent home surveys and snagging surveys can be invaluable to help prospective purchasers gain valuable insights into the condition of the building, providing the necessary facts for informed decision making. But with so many different types of surveys to choose from, which one should estate agents recommend?

What is a snagging report?

A snagging list is typically drawn up at the end of a construction project. As such, it is associated with new-build properties, where building issues are identified by the prospective buyer to be addressed by the developer as a condition of sale. It’s not a survey as such, but rather a list of defects that can be passed on to the builder for remediation either before or after completion.

A snag is simply a defect that needs repairing – usually a minor or cosmetic issue such as a cracked tile or chipped paintwork. However, it could also apply to substandard workmanship such as faulty window and door installations, leaking pipes or poorly installed insulation, and could even include structural defects. The snagging list will cover everything, from ensuring that heating systems and smoke alarms operate as they should, to highlighting decorating defects or poorly finished joinery, to checking that Building Regulations have been complied with.

The snagging survey can be carried out by any building expert; they don’t have to be Chartered Surveyors. Ideally, they should operate independently of the housebuilder, so that an unbiased assessment can be provided.

What is a home survey?

A home survey is an independent property survey carried out by a RICS Chartered Surveyor. There are currently three types of inspection endorsed by the RICS:

  1. A basic Condition Report

  2. A mid-level HomeBuyer Report, and

  3. An in-depth Building Survey (formerly known as a full structural survey).

Prices for surveys start from around £300 and vary depending on the level of investigation as well as the value of the property.

  • Level 1 Condition Reports average from around £350+

  • Level 2 HomeBuyer Reports cost about £500, and

  • Level 3 Building Surveys cost approximately £900.

Here’s a useful overview of costs.

A Condition Report provides a snapshot overview of the condition of the building on the day of inspection, without adding much detail. An intermediate HomeBuyer Report consists of a visual inspection of the property inside and out, checking the condition of all building elements and identifying issues, such as damp, subsidence and other potentially serious issues. It will also advise on possible causes of such issues and will recommended any repairs and possible maintenance required. A RICS Building Survey is suitable for older and larger properties and those with complex surveying requirements, and delivers a comprehensive analysis of the condition of the property alongside ample professional guidance.

Who is responsible for repairs?

If the property in question is a new-build, the housebuilder is responsible for rectifying all the agreed snags for as long as the property is still under warranty, which is normally up to 2 years after completion. This puts the onus on the buyer to find all and any issues as soon as possible.

For resale homes, the seller is not obliged to repair any issues detected, whether these are flagged up via a snagging report or home survey. However, if issues of concern are identified, the buyer may ask for the valuation to be revised downwards for the sale to proceed or they may pull out of the transaction. If the property is a fixer-upper, it would be unwise for the seller not to disclose known faults.

Which type of survey is most appropriate?

Estate agents are likely to be asked for their professional advice and recommendations regarding the best survey for the property. Buyers will assume that you have a clear idea of the condition of the property and if you wish to maintain your reputation and ongoing trust of buyers, it is essential that you are transparent about known flaws of any property you are marketing for sale.

Recommending any kind of pre-purchase investigation is therefore a prudent move that can protect you from any accusations that you hid what you knew about the property and potentially poor reviews for your agency.

A snagging survey is the obvious choice for new-build homes or properties that fall under warranty. Even if there are additional costs associated with a snagging survey, it is an excellent opportunity for the buyer to ensure that problems are fixed by the contractor before signing on the dotted line. There is no risk in recommending that buyers spend their money on a snagging survey. What’s more, you may even be able to benefit from building a network of qualified and trusted snagging surveyors to recommend.

Essentially, the right survey to recommend will depend on the type, age and apparent condition of the property and the buyer’s plans for it. For a new build, a snagging list is likely to be the best option, although a RICS Condition Report may also be an excellent choice. Potentially, both types of survey could be carried out alongside each other for a comprehensive check and peace of mind for the buyer that no unforeseen issues will emerge.

For resale homes, older buildings and period homes, the choice won’t be as straightforward. While a RICS home survey is likely to be the better option, there are different levels of investigation available that only a qualified surveyor should be able to recommend directly to the buyer. Your best bet is to have the names of one or two experienced local surveyors to hand that you can pass on to prospective buyers, and let them take it from there. As estate agents, it is your job to provide buyers with the available options so they can choose what’s best for them.

Newpaper with headline that reads Changes in legislation

How Landlords Can Tackle Rental Reforms and Energy Changes

The government’s plans for the rental market will see some big changes in the coming years. In fact, landlords have started to make their homes more energy-efficient. Rental properties must already have an EPC (Energy Performance Certificate) rating of band E or better.

About our guest blogger:
Dakota Murphey has experience in property management with her portfolio of properties expanding in the South of England. Her passion for renovation and home improvement projects is shared through her writing to help educate and inspire others.

However, the government wishes for rental properties to be better insulated and rated in band C by 2026 for all new tenancies. Existing tenancies have until 2028 but for landlords with a large property portfolio, that means beginning to consider changes now.

Data from March 2021 shows that 63% of existing dwellings have an energy efficiency rating of D or worse. This represents a considerable chunk of the property market and presents a challenge to landlords to improve their ratings. It may even see some landlords step away from the rentals market as the costs involved to upgrade their ratings no longer make it financially viable.

Proposed rental reforms plan to introduce lifetime deposits for tenants and to ban Section 21 evictions. The introduction of this bill has been delayed due to the pandemic but it is expected to be published in 2022. So, what can landlords do to tackle these proposed changes and make their properties more compliant?

Making homes more energy efficient

Landlords have an extra year to ensure their new-let properties achieve band C after it was extended from 2025 to 2026. That still requires plenty of work to be done to upgrade the efficiency of these homes. And, the 2028 deadline date for existing lettings looms large. A fifth of landlords have already improved their energy ratings and here are some ways to improve yours.

Bolstering insulation

One of the easiest ways to make your property more energy-efficient is to improve insulation. Poorly insulated windows, walls, doors and roofs cause the largest amount of heat loss in the home. Windows, doors and walls contribute to approximately 35% of heat loss, while the roof is estimated to lose a further 25% of generated heat.

Heat escaping from poorly insulated homes is incredibly inefficient as it costs so much more to keep heating a room. Rather, retaining the generated heat for longer means tenants can lower their heating bills and therefore their costs of living.

With the costs of living beginning to spiral to the point of unaffordability for many, it’s important landlords make their homes efficient for their tenants. Ways to upgrade your insulation include replacing windows and doors, and taking the time to insulate your roof.

Regular servicing of boilers

Energy efficiency comes in many forms but one of the best ways to improve your property’s rating is through regular servicing of your boiler. If your property’s boiler is over 10 years old then it’s worth looking into its efficiency. This might mean replacing the entire boiler or just installing newer parts to ensure it is running smoothly. The same applies to homes that use oil tanks for heating.

“Annual boiler services remove sludge deposits that can clog your system, increasing heating costs and reducing heating efficiency”, says oil tank experts, SG Tanks. “If your boiler is well past its best, investing in a modern and better model is the way to go. Modern boilers are more energy-efficient and fail less often than old ones”.

Look at your lighting

One of the aspects of a property that EPC surveys check is the lighting. An assessor looks at the number of fixed light fittings plus how many low energy light bulbs are fitted. Low energy lightbulbs include CFT and LEDs.

“The average LED lasts 50,000 operating hours to 100,000 operating hours or more”’ says LED light installation company Stouch Lighting. “That is 2-4 times as long as most fluorescent, metal halide, and even sodium vapour lights”.

LED light bulbs, for instance, require just 3.3 watts to produce 400 lumens which is the equivalent of a 50-watt incandescent bulb. To put the costs into perspective, that 50-watt incandescent bulb, running at 8 hours a day, would cost £21.90 to run for a year if you are charged 15p per kWh.

The LED bulb, by comparison, costs just £1.45 per year for the same usage and rate. Now, consider how many bulbs are in your property and do the maths on the savings tenants could make on their yearly energy bills.

Preparing for the proposed rental reforms

While there are things we can do to improve how energy-efficient rental properties are, it’s a tougher task to prepare yourself for the incoming rental reforms. Although the rental reform bill hasn’t come into effect yet, one of the biggest challenges to come from it will be the proposed abolishing of Section 21. This section allows landlords to end rolling tenancies with two months notice without giving a reason.

Legally evicting tenants will become much more difficult so it’s important for landlords to be satisfied with the people living in their properties. This might mean introducing a stricter background check process that gives you a better indication of who is moving in.

Another proposed change to the rental industry is the removal of security deposits for tenants. Instead, a ‘lifetime deposit’ will be introduced that is supposed to stay with the tenant, wherever they move to. This could make it harder to withhold a security deposit and require better evidence of the tenant doing something against their terms of tenancy.

Speculation surrounding the Renter’s Reform Bill includes proposals for an independent industry regulator or a national landlord database. Both would require the actions of landlords to be better documented.

Further rental reform proposals

The government is looking to give renters more of what they want and further proposals include:

  • Making it easier to rent with pets

  • Better enforcement on criminal landlords

  • Making open-ended tenancies the norm

Landlords may no longer have the peace of mind of knowing that their tenant is going to occupy their property for a certain period if open-ended tenancies become the norm. That might mean putting procedures in place to replace tenants unexpectedly. This could be done by associating yourself with an agency or creating a bigger financial buffer to cope with the loss of income.

Renters looking for a property that allows pets have struggled in the past and the new proposals would seek to change that. It is implied that landlords will have to object to pet requests in writing and this can only be rejected if there is a ‘good reason’. An example of a ‘good reason’ would be if the property is too small and the pet’s introduction would be impractical.

Households bought 3.2 million pets during lockdown, creating a huge rise in demand for pet-friendly living. It’s something to prepare for in advance by introducing more durable flooring, enclosed gardens and less exposed electrical cables into your properties.

Smart Security Tips For Tech-Savvy Property Managers

In today’s day and age of technological advancements, smart properties are becoming more and more popular throughout the UK.

However, while advances in technology may generally be seen as a good thing, the increased connectivity of smart devices can create a haven for wannabe hackers, creating all sorts of vulnerabilities when fitted incorrectly.

For property managers, landlords and letting agents, taking advantage of smart tools and installing them with security in mind is crucial. As such, when it comes to installing a smart property or using smart-home technology, it is imperative to consider all these potential challenges – especially from a security point of view.

Here are some helpful hints and tips around property technology to help you manage and install smart-home technology and facility-management devices more safely.

Don’t make outdoor smart devices obvious

About our guest blogger:
Dakota Murphey has experience in property management with her portfolio of properties expanding in the South of England. Her passion for renovation and home improvement projects is shared through her writing to help educate and inspire others.

With reasons to prioritise building security already, the chances are that you will have fitted a fair few video doorbells and smart cameras in recent times. However, did you know that – while they may have been designed to make properties more secure – certain reports have found they can actually do the opposite?

According to Consumer Reports, video doorbells were found to have more than 11 security vulnerabilities, potentially exposing homeowners and property managers to issues like hacking and data breaches. What’s more, while video doorbells may have been used to deter burglars, certain wannabe criminals have recently been specifically targeting homes with video doorbells, believing them to be a sign of wealth.

As such, you should use this knowledge to your advantage, installing doorbells and smart cameras in areas of the home that are out of sight yet retain a clear view of the front of the property.

If you haven’t done so already, it is also time to take advantage of other low-cost, but valuable contactless technology. To keep track of key security, download a simple and smart key fob solution on your smartphone to know instantly what a certain key is for and who is responsible for its use. Such essential smartphone technology can benefit facility supervisors, agents and property managers alike.

In general, you should encourage your client to make improvements to their property’s security, ensuring their Wi-Fi network is set to private and that they are using a strong password as a sign in for the smart devices’ associated software.

Isolate smart networks

Smart devices are defined as ‘smart’ for a reason, utilising the latest technology to stay interconnected with other devices around the home.

However, while it may be easier to set properties up with one continuous network, it’s important – from a security perspective – to isolate smart networks from existing networks within the property.

Say, for example, you are setting up the security profile for a smart fridge. By creating this as its own isolated network, this will – in turn – render it unable to access the client’s emails or bank account details should anyone manage to infiltrate it, since it will be operating separately from the network housing that information.

Likewise, improving the router setup in a property will significantly improve the security profile of the smart property network. Regular routers often fail to offer decent security features, making it a good investment to purchase a replacement that is capable of identifying and combatting any potential threats.

Going one step further, it could also be worth getting a professional in to do a penetration test or ethically hack the existing smart home setup. This, as a result, will help identify any existing vulnerabilities, enabling you to source the relevant solutions.

Smartphone vulnerability

When setting up a smart property, all the devices will need to be connected to a smartphone of some kind. As such, it stands to reason that, the less secure this smartphone is, the more vulnerable it will be as well. Therefore, it’s imperative to set smartphones up in a way that is as safe and secure as possible – even in the event of being stolen.

From simple things like updating to the latest security patches to investing in fully-fledged smartphone-based security software, there are a wide number of things you can do to protect smartphones against potential hacks.

However, while it may sound fairly obvious, one of the most effective things you can do is ensure strong passwords are being used across the smart home network – whether that be on each individual smart device app or on the home screen itself.

This defence, coupled with a router system that has its firewall enabled, its main computer account set to an administrator-level and WPA authentication turned on, will provide your client with the best possible defence against potential smartphone-focused hacks.

Why Buy-to-Let Purchases are Rising in 2022

Despite the challenges we have faced over the past two years, a surprising outcome of the pandemic was the boost it caused to the property market. And in the upcoming months, the buy-to-let market is expected to see even more growth.

About our guest blogger:
Dakota Murphey has experience in property management with her portfolio of properties expanding in the South of England. Her passion for renovation and home improvement projects is shared through her writing to help educate and inspire others.

Following the exodus from cities at the start of the pandemic, more people are returning to city life and seeking the flexibility that rentals offer as a result. The increase in tenant demand is pushing property values and rental prices up and could see remortgaging in the buy-to-let sector hit new levels. As a result, it’s anticipated that landlords will be looking to expand their existing portfolios or dive into the market as a way to maximise their profits.

Boosted rental prices

Rent prices are rising fast, which serves as a great opportunity for those invested in the market. In fact, while the Office for National Statistics has indicated that rents have increased by 1.8% across the UK over the past year, business consultants believe that the figure is closer to 8%.

Neighbourhoods in central London, Yorkshire, Birmingham and Manchester have seen a rise in rental prices, making these destinations particularly popular with investors. Tenant demand is expected to remain strong throughout 2022, and as prices for rental properties increase, the desire for investors to put their money into buy-to-let properties will follow suit.

Increase in remortgaging activity

One of the key themes for lenders, brokers and landlords in the coming year will be the increase in remortgaging activity. The new underwriting standards which were introduced back in 2017 by Prudential Regulation Authority (PRA), were coupled with low interest rates of that period to encourage longer-term mortgages. But, those five-year fixed-rate mortgages will be coming to an end which is expected to boost the remortgaging sector considerably.

What’s more, fears of soaring inflation have led many experts to suggest that the base rate of interest will rise in 2022. Since most landlords investing in a buy-to-let property will obtain a mortgage to do so, particularly in locations where properties are more expensive like London, borrowers will be keen to secure a loan sooner to avoid a hike in interest rates. According to a report from Shawbrook Bank, 34% of landlords intend to buy at least one more property in 2022 and many more are likely to utilise borrowing as a way of expanding their portfolios.

Student cities repopulating in droves

Another reason why buy-to-let looks set to be a popular investment option is that after a period of uncertainty for the student community, filled with remote studying and living away from campuses, high numbers of students are returning to campus. Likewise as the travel sector and global travel returns to normal, international students are returning to the UK to resume their studies leading to rising rental demand. Such movement has bolstered the rental demand in student-heavy areas and it’s an issue that’s not only prevalent in the UK but across Europe.

In cities such as Leeds, properties over the last few months have been reserved solely after virtual viewings in many cases in order to secure homes for the academic year, and many students are paying premium prices to lock in properties.

With student populations at their limit, and courses at numerous universities oversubscribed, it offers a huge opportunity for the buy-to-let market and for letting agencies, since students now appear to have larger budgets and a willingness to pay a premium for the best properties close to amenities. Since tenants are increasingly happy to rely on virtual viewings and signing on for properties without physically seeing them, letting agencies can complete property transactions for clients much faster.

The year of build-to-rent

One of the proposed solutions to the demand for rental properties is build-to-rent, and 2022 has been dubbed the year that this solution really takes off. There are estimated to be over 205,000 build-to-rent homes in the UK, and according to research from the British Property Federation, the number of completed build-to-rent developments has jumped up by 27% in 2021 compared to 2020. This growth shows no signs of slowing down and 2022 could well be the year that build-to-rent becomes the go-to solution.

This option commands a premium price tag and is intended to appeal to younger renters, since the developments offer on-site facilities and contemporary furnishings, but many investors have expressed interest in catering to modest incomes and families seeking rentals too.

A year with ample potential for investors

With rents likely to rise by as much as 4.5% by the end of the year, according to a study by Zoopla, and the reopening of the economy post-pandemic, there are certainly opportunities for rental investments throughout this year. Investors need to stay mindful of the needs of tenants and market trends when putting money down on a property.

Despite much research carried out, the need to protect investments has never been stronger given the challenges of the past year, which is why investors should remain prudent and use letting agencies and property managers to help them manage property portfolios more effectively and make stronger investment decisions. With legislative changes occurring all the time, a simple mistake could cost investors considerably.

Which Eco-Savvy Techniques Boost Property Values?

With rising energy costs and increasing awareness of the environmental impact of property, home energy efficiency improvements are high on the list for agents and landlords alike. There are plenty of eco-savvy techniques that property owners can deploy to not only help lower their tenants’ utility bills, but also dramatically improve the value of the property.

Take a look at the chart below, courtesy of Money Supermarket research data, to see the clear correlation between higher EPC (Energy Performance Certificate) ratings and an increase in property value.

Source: https://www.moneysupermarket.com/gas-and-electricity/value-of-efficiency/

A growing number of homebuyers now look for green credentials as an important requirement for their future home. These days, many buyers will check the EPC ratings of a property before making the decision to view it, discarding some properties on the basis of poor energy performance even though they might otherwise be perfectly suitable homes.

Eco-friendly features that add value to a home are increasingly on the radar, both for buyers and sellers, and it is clear that buyers are willing to pay a premium for a property if they can see how sustainability features can save them money over the long term.

What are the best green investments for a property?

Draught proofing

About our guest blogger:
Dakota Murphey has experience in property management with her portfolio of properties expanding in the South of England. Her passion for renovation and home improvement projects is shared through her writing to help educate and inspire others.

Draught proofing is one of the cheapest and most effective ways to save energy in a building. Unwanted gaps around doors, windows, floors, walls and pipework can lead to cold air coming in and warm air going out. You may even be able to feel a tangible cold breeze. The result of uncontrolled heat loss is a home that doesn’t feel cosy and can cost a fortune to heat. Draught-free homes, on the other hand, are comfortable at lower temperatures and save the homeowner money on energy bills.

Draught proofing costs will depend on the exact areas that need attention and the size of the job. A typical semi-detached property should cost in the region of £200 for professional draught proofing, according to Energy Saving Trust, and DIY options will of course be cheaper.

Cavity wall insulation

Wall insulation is one of the best individual contributors to EPC improvements. Good cavity wall insulation can reduce heat loss by up to 1/3, cutting energy bills by up to £255 a year, says EDF Energy.

Walls are insulated by injecting mineral wool, polystyrene beads or polyurethane foam into the cavity from outside by drilling holes through external walls. Expect to pay upward of £950 for professional cavity wall insulation. Free insulation grants are available through the Energy Company Obligation (ECO) government scheme for low income households.

For home extensions and new build projects, using thermal insulation building blocks in the construction is a good way to ensure maximum energy efficiency from the outset. Older buildings with solid walls instead of cavity walls – typically buildings constructed before the 1920s – can be insulated by way of fitting internal or external insulation to achieve the same effect.

Doors and windows

External doors and windows can be a major source of heat loss in the home. Single glazed doors and solid material doors have a high ‘U-value’, meaning they are comparatively thermally ineffective. Double glazing options and composite materials are designed to reduce heat transfer, and are a good energy efficiency upgrade option. Any door installed before 2002 should be reviewed. The smaller the U-value, the less heat is lost through the door.

The same goes for single glazed windows. Upgrading the property’s windows is an excellent investment to increase energy efficiency. Double glazed windows throughout an average three-bedroom house is likely to save around £110 in heating bills per year, and improve the property’s EPC rating. Triple glazed windows could save an additional 50% on top of double glazing figures!

Loft insulation

Around a third of heat loss occurs through uninsulated roof space, which makes effective loft insulation one of the most useful ways to improve energy efficiency in a property. Given that heat rises, simply lining the loft floor can make a big difference. Building Regulations guidance stipulates a minimum depth of 270mm, which equates to a thermal resistance R-value of 6.1, and up to 300mm thickness is recommended.

Good loft insulation helps reduce a property’s carbon footprint and combat climate change. The reduced heat loss means that the central heating system doesn’t have to run as long, reducing the amount of fossil fuels needed to keep the home warm. A detached house can expect to save around one tonne of carbon dioxide each year, according to this heating expert.

Boiler upgrade

Upgrading the central heating boiler to a more energy efficient option can have a significant effect on the property’s energy consumption. Old boilers can lose an inordinate amount of heat, while modern combi boilers are among the most energy efficient appliances around. On a detached house, the difference can be as much as £400 in lower energy bills. An A-rated boiler can also greatly improve the property’s EPC rating. A new combi boiler and installation should cost no more than about £3,000 but it’s a worthwhile home improvement that will contribute to a higher market value for the property.

In terms of environmental impact, heat pumps and biomass boilers offer a fossil fuel free heating option, but buying and installing this technology does come at a price.

What do homebuyers really think?

A recent eco-home survey report asked 2,000 potential homebuyers which eco-savvy property upgrades they valued most and which they valued least. The results make for interesting reading. Draught proofing, installing thermostats and smart metres came top as the most valued green home improvements. This is excellent news for sellers who are choosing to invest comparatively little on eco upgrades and are achieving healthy returns.

Source: https://www.money.co.uk/loans/eco-homes

Interestingly, ground source heat pumps, air source heat pumps and biomass boilers top the list of least valued eco-improvements. With many people yet to be convinced of the economic feasibility of the new technology the jury is still out on whether homeowners are likely to get their money back on the investment when selling their property.

Source: https://www.money.co.uk/loans/eco-homes

What Changes Will Landlords Be Taking into 2022?

As a landlord, there are always legalities and responsibilities to consider, and the past year has been no exception. Landlords have faced several changes to legislation this year, along with some that are still in the pipeline, that buy-to-let investors need to be prepared for and adapt to. These are the key changes that have affected the buy-to-let sector during 2021 and what landlords can expect in the future.

Renters’ Reform Bill

About our guest blogger:
Dakota Murphey has experience in property management with her portfolio of properties expanding in the South of England. Her passion for renovation and home improvement projects is shared through her writing to help educate and inspire others.

The Renters’ Reform Bill has been described as a way to deliver a fairer and more effective rental market, and it will deliver a series of reforms which will change the grounds on which landlords are able to evict their tenants. The goal of the reforms is to provide greater security for tenants and reduce financial pressures when moving between rental properties. ‘No fault’ evictions will be abolished, as a result of the removal of Section 21 of the Housing Act 1988, and there will also be changes to Section 8 to reform the grounds on which a landlord can seek legal possession.

This will be a significant change to legislation but despite plans for them to come into effect in the autumn of 2021, the date for publishing the White Paper has been delayed until 2022. According to the Department of Levelling Up, Housing and Communities, this was agreed at the end of October 2021, with contributors to the documents told that the government needed additional time to make the reforms as balanced as possible.

Stricter Fire Regulations in HMOs

Landlords, letting agents and property managers of a House in Multiple Occupation (HMOs) could face unlimited fines if they don’t adhere to the new measures to enhance fire safety. The new regulations form part of the government response to the Fire Safety Consultation, which only apply to multi-tenancy premises and HMOs. The changes are expected to be published in 2022, as part of the Building Safety Bill. Regulations will amend the Fire Safety Order to include frequent risk assessments for each building and to improve the information passed over throughout the lifetime of a building.

Electrical Compliance

The regulations for electrical safety standards came into force back in June 2020. But since 1st April 2021, they apply in all cases where a private tenant has a right to occupy a property as their main residence and pays rent, including shorthold tenancies. These regulations specify that landlords now have to have the electrical installations in their properties inspected by a qualified electrician every five years, at least, and supply a copy of the safety report to their tenants within 28 days of the inspection. If the local authority requests a copy of the report, landlords are legally required to supply a copy to them.

Right to Rent Deadline Extension

At the start of lockdown, the government relaxed the Right to Rent rules. Since being brought into force, the deadline has been extended several times, and has now been extended until 5th April 2022. Since the beginning of April 2020, the government has allowed Right to Rent checks to be carried out via a review of scanned copies or photos of documents, sent by email or phone. The authenticity of the documents can be checked on a video call with the prospective tenant.

However, landlords need to mark these document copies with the phrase “an adjusted check has been undertaken on [insert date] due to COVID-19” to highlight that the check was amended for safety reasons. It’s not necessary for landlords to carry out retrospective checks for any tenants who had a COVID-19-adjusted check between 30th March 2020 and 5th April 2022.

Regulation of Property Agents

The Regulation of Property Agents’ group made recommendations back in 2019 for an updated regulatory framework for property agents. This is set to include an independent property-agent regulator, mandatory and legally enforceable Code of Practice, and mandatory qualifications for property agents. While there’s no date in place yet for this to come into effect, pressure is building for updates to be made and any changes are likely to have a big impact on landlords who work with property agents, so prospective and existing landlords need to stay on top of the updates for this implementation.

Making Tax Digital Scheme

The government’s Making Tax Digital (MTD) scheme has been extended to taxpayers with business income over £10,000, which includes landlords and sole traders. All VAT businesses will need to follow this ruling from April 2022 while from April 2024, the regulations will demand that many individuals using Self Assessment will be required to change to this method for income tax (including all income tax accounting and reporting as well). If landlords also identify as sole traders, the income from the sole trader businesses they own, along with any income from property ownership, will be combined for the purposes of determining whether they are mandated for MTD Tax.

Essentially, whether you’re an existing landlord managing properties or you’re looking to invest in a buy to let in the near future, staying on top of the legal aspect of rental properties is essential. While some of these changes are yet to come into effect, there have been a number of updates over the course of the past year as a result of COVID-19 that landlords need to be aware of to stay compliant with the latest legislation.

Man show sad that sale has fallen through

Why do more than a quarter of property sales fall through and what can agents do to stop it?

Buying and selling property in England and Wales is a complex process that most homebuyers actually know very little about. Property investors with multiple assets may be more clued up, however the majority of residential buyers and sellers rely on the expertise of their estate agent and conveyancer to guide them safely through the transaction.

What’s more, moving home is reportedly one of the most stressful life events, right up there with getting divorced or losing a loved one. With emotions running high and huge financial commitments on the line, it is perhaps little wonder that property transactions don’t always go smoothly.

According to recent findings, around one in four residential property sales falls through every year before completion. In 2021, these figures may be nearer 40% as a direct result of the high-pressure property market we’ve been experiencing. With demand for properties to buy at an all-time high, there are plenty of things that can go wrong between an offer being accepted and contracts being exchanged.

About our guest blogger:
Dakota Murphey has experience in property management with her portfolio of properties expanding in the South of England. Her passion for renovation and home improvement projects is shared through her writing to help educate and inspire others.

A property sale or purchase falling through before the transaction becomes legally binding is not only inconvenient, it can involve substantial financial losses too. In general, it is useful to see if anything can be learnt that might help estate agents avoid sales falling through at all. Let’s, therefore, consider the main reasons for a failed property transaction.

Bad survey results

Once an offer has been accepted and the conveyancing process initiated, most prudent homebuyers will arrange for an independent home survey to be carried out. Having a RICS-accredited building professional inspect the property’s condition and provide valuable feedback is an important due diligence step. And while every buyer will obviously be hoping that the building will be given a clean bill of health, the news is not always good.

The survey report plays an important part in the purchasing process. Building defects and issues of varying degrees of severity may be identified, and while some of these can be easily rectified by the seller before exchange, or a price discount negotiated to cover the cost of repairs after completion, others may represent a deal breaker. The main culprits relate to structural issues such as subsidence and heave, damp issues, timber decay, roof defects, asbestos containing materials, outdated services and invasive garden species such as Japanese knotweed.

No funds available

The vast majority of residential property purchases are funded by way of a mortgage. In a competitive market, a buyer who has an agreement in principle in place is in a stronger position than one who doesn’t, and many estate agents won’t even put forward an offer unless it is backed by an AIP. However, a lender’s decision ‘in principle’ is just that. Before the funds can be released, mortgage companies carry out a variety of checks and obtain their own valuation to assess the risk. There are numerous reasons why a mortgage offer may not be approved after all. From problems with the building itself to irregularities in the application form, a recent job or other changes in the applicant’s personal circumstances, the buyer could unexpectedly find themselves without the funds to proceed.

A growing number of UK properties are bought without the help of a mortgage, which removes the uncertainties explained above and should reduce the chances of a sale falling through on the basis of no funding. However, cash buyers are just as likely to walk away from a poor survey result, or change their mind for all manner of reasons.

Property chain collapse

Property chains are commonplace in residential property transactions. Since most buyers require the proceeds from the sale of their current home in order to purchase their new home, a line of buyers and sellers are linked together in this way, all working towards exchanging contracts on the same day. The chain has a beginning (perhaps a first-time buyer with nothing to sell) and an end, someone who is selling but not buying.

It is the interdependence caused by the ‘linking’ of transactions that can be a problem. Effectively, the chain will only progress as fast as the slowest link in it, and any problems occurring anywhere along the chain will have a knock-on effect for everybody else. Clearly, the longer the property chain is, the higher the risk of something going wrong somewhere.

Property chains can collapse for all sorts of reasons, but there are warning signs that should alert you to urgent action, and plenty of things you can do to keep the chain moving.

Gazumping or gazundering

When buying and selling property in England and Wales, the signing and exchanging of contracts that gives the transaction legal status comes rather late in the conveyancing process. There is typically a delay of several weeks (or longer) between an offer being accepted and contracts being exchanged, during which period the property survey is conducted, local searches are carried out and mortgage offers are finalised. This can be a nail-biting time for buyers and sellers, and anything can still happen.

Unfortunately, gazumping (initiated by the seller) and gazundering (initiated by the buyer) are not illegal practices despite debates over the years arguing that they should be. As it stands, there is nothing to stop the seller from choosing a different buyer if contracts have not yet been exchanged, or to stop the buyer from suddenly dropping the offer price at the last minute. It goes without saying that these unscrupulous tactics go against any sense of fair play and carry a high risk of one or the other party pulling out from the deal.

Change of personal circumstances

Sometimes, there’s no other reason for a property transaction to be aborted than life happening and things changing. Perhaps the seller has good personal reasons for taking the house off the market, or maybe the buyer has found a better property somewhere else or has decided to stay put.

A change of heart could be the result of a job loss, family break-up, illness or countless other personal reasons that may never be fully explained. While it can be incredibly disappointing to lose a property because someone along the chain has simply changed their mind, there’s nothing much that can be done about it.

Can a fall-through be prevented?

Abortive transactions are always frustrating, especially when a failed mortgage application or a horrendous survey report makes any chances of rescuing the deal pretty much impossible. However, more than half of failed property sales are preventable and can be rescued. If delays or inactivity threaten to derail the sale, the key to keeping the momentum going is good communication.

This is where estate agents and conveyancers need to step up to do the best for their clients especially in a booming property market. Reputable agencies will appreciate that it is in their best commercial interest to bring the sale to a successful conclusion, and many have dedicated sales progressors to jolly everyone along and reduce the risk of feet getting cold or minds being changed. Solicitors will also recognise the need for steady progress towards an exchange of contracts within a reasonable timeframe, and should take responsibility for ensuring no undue delays in the conveyancing journey.

Property Law Updates Estate Agents Need to Know

Every year that passes comes with new updates and amendments to property legislation and guidance. 2021 is no different and with the tumultuous past year that the world has experienced, it’s unsurprising that the property market has been affected in several ways. As we start to navigate the new normal as the pandemic slowly starts to ease, these are some of the changes and updates to the housing market that estate agents should stay aware of.

Changes to pet ruling

About our guest blogger:
Dakota Murphey has experience in property management with her portfolio of properties expanding in the South of England. Her passion for renovation and home improvement projects is shared through her writing to help educate and inspire others.

Earlier this year, the government updated the Model Tenancy Agreement which includes a clause that landlords are no longer able to reject a tenant’s request to keep pets in the property unless there’s a valid reason for doing so, such as the size of the property. However, something that estate agents need to be aware of when responding to client requests is that the law does not state that landlords are legally required to permit pets in their properties.

There’s a distinction between the terms guidance and law, and the agreement falls under guidance. This means that there are no legal obligations for landlords to allow pets – landlords and letting agents are only entitled to operate a no pet policy providing there’s no increase to the deposit past the five week’s rent maximum and that, in regards to service dogs, there’s no breach to the equality laws.

Updates to the leasehold reform

One of the biggest changes that was announced in 2021 was the Leasehold Reform, which the Secretary of State for Housing, Communities and Local Government announced in early January. Under the new legislation, house and flat leaseholders can extend their lease to a new standard of 990 years without any ground rent. The new rules offer a great opportunity for significant savings for clients, of thousands of pounds in some cases, and it’s a huge change to the sector that was first raised back in 2017.

Right to rent

Since mid-June, the regulations have changed for proving a tenant’s right to rent in the UK. It’s now required that you meet anyone taking on a property face to face, while they are having their documents checked. And tenants need to provide evidence that they have the right to rent in the UK, given that we’re no longer part of the EU. Letting agencies can’t grant a tenancy to anyone who cannot provide evidence that they are legally allowed to stay in the UK.

There are two categories of tenants who have the right to rent – unlimited rights and those with time-limited rights. Unlimited right to rent includes British citizens, people who have the right to live in the UK and those who have been given indefinite leave to remain or have no time limit on their stay. However, this doesn’t include EU citizens, EEA nationals or Swiss nationals anymore. Time-limited right to rent applies to anyone falling outside the previously mentioned categories who can stay in the UK for a set period of time, such as people who are permitted to remain in the UK as a result of Acts of Parliament, EU treaties and immigration regulation.

Distancing guidelines remain

With each phase of the easing of COVID restrictions comes a wave of relief and feeling like life is returning to normal, but we’ve not passed the finish line just yet, so there are still guidelines to bear in mind when carrying out viewings and property inspections. The changes for agents, therefore, will be minimal and professionals in this sector should continue to adhere to safety guidelines for the protection of themselves, their colleagues and clients.

Agents should ensure that people visiting office sites have made an appointment, to avoid overcrowding and to ensure distancing is maintained as much as possible, and that Test and Trace codes are in place to track contact with others. Masks should still be worn to keep everyone safe and, where possible, offering virtual viewings will help to maintain social distancing. In instances where in-person viewings are required or preferred, opening windows and doors to allow ventilation and providing hand sanitiser can help to minimise the spread of the virus.

In summary

Property law is always changing and with the pandemic, Brexit and governmental updates to consider, there are plenty of amendments to how estate agents need to operate throughout the remainder of 2021 and beyond. Staying up to date with the trends and demands of the market, as well as the legalities for compliance, will ensure that you’re always equipped with the latest knowledge to answer client queries and provide the best advice to tenants and property purchasers.

Money-Saving Tips for New Property Investors

Getting into the property market as an investor is a challenging but incredibly lucrative endeavour, if you know how to make the right types of investments. If you know how to make the right decisions, property investments can set you up financially for the foreseeable future. Here are a few ways you can save money while you’re making money.

Know where to invest

About our guest blogger:
Based in Worthing, Lucy studied Economics, Finance and Management before turning her focus towards the property market.  She’s a specialist short/long stay holiday rentals and has written for a number of major industry blogs.

Understanding property market trends will help enormously in helping you decide where to invest in property. There are growth areas around the country where rental yields are higher, and these change continually, so it’s important to do your research so you can take advantage of capital gains. Cities such as Birmingham, Manchester, Newcastle and Edinburgh are all popular destinations for investors, with plenty of potential tenants and higher rates owing to the central locations.

Pay attention to average rental rates which will help you determine if an area will pay off your investment costs sooner and whether a property in that area is worthwhile. Vacancy rates will also help you identify areas that are in demand, so you can be sure you’ll always be able to find tenants. This can be an ongoing challenge for landlords, so having peace of mind that an area is consistently in demand will minimise the risk of an empty property.

Get professional advice

While it may seem counterproductive to spend money on professional services, specialists will be able to identify areas where you can make savings, whether that’s finding you the best mortgage deal or reducing taxes. Firstly, you should hire an accountant who can guide you through the process of purchasing the property and help advise you on setting up your investment portfolio. Depending on how many properties you’re managing, you could be dealing with large sums of money each month, so it can be an advantage to have an experienced accountant handle your finances for you.

An experienced mortgage broker will also help you get the best mortgage deal for your buy to let property. As mortgage specialists, Town & Country Mortgage Services explain: “there are now plenty of competitive buy to let mortgage deals around that are specifically aimed at the buy-to-let market, ranging from special offer buy to let mortgage deals to fixed and variable rate options”. In order to ensure you’re getting the best deal, you need to work with someone who understands the nuances between these options.

Shop around for insurance

Insurance is essential for landlords, protecting their property and the returns on their portfolio. However, many people wind up overpaying for their cover, so it pays to shop around. Insurance policy rates vary depending on whether the property is secured via window locks and alarms, the age and profession of the tenants, and what type of property you’re insuring. You can cut costs by checking what the policy you’ve chosen covers, so it’s not more or less than you need, and increasing your excess to reduce monthly premiums.

Determine maintenance costs

The age and condition of the property will affect how much you can expect to pay in maintenance costs, which will impact how good of an investment a property is. If you need to pay out thousands in repairs and renovations, is the property really worth the price you’re paying for it?

Compare the costs of an old property versus a new property – the former will be cheaper to buy, but may need more work, while a newer property will require less maintenance but will cost more to purchase. Extra features like a garden or a swimming pool may also seem like an appealing option, but these will cost money to maintain which will cut into your profits.

Final thoughts

Investing in property requires plenty of research and planning, but when you choose the right property, it can provide great returns. Whether you’re just starting your property portfolio or you’re adding to existing properties, there are always opportunities to save money and boost your profits.

From choosing the location carefully to making sure you balance upfront costs with ongoing maintenance fees, and making sure you work with professionals, there are cost-saving measures that property investors should be aware of.

Property being decorated

How to Create a Low Maintenance Rental Property

About our guest blogger:
Based in Worthing, Lucy studied Economics, Finance and Management before turning her focus towards the property market.  She’s a specialist short/long stay holiday rentals and has written for a number of major industry blogs.

For most landlords, the goal of a rental property is to make money. But maintaining a property can be expensive, especially when tenants are moving in and out. One way to ease the financial burden of this process is to create a durable, low maintenance property that will stand up to wear and tear more effectively.

Here are a few ways you can save money as a landlord while also providing a comfortable and attractive property for your tenants.

Avoid matte white paint

There’s a temptation to paint the entire property white to give the illusion of freshness and space. But white shows up marks and stains far more than a darker shade, meaning that it requires repainting more often. Instead, you can choose a neutral colour such as a light grey or beige which still opens up each room but masks wear and tear more efficiently.

You should also choose a paint that is hard-wearing and will stand the test of time for longer. This is particularly key in areas where spillages are likely, such as the kitchen.

Keep the colour palette consistent

Painting each room a different colour creates a lot of visual interest in your property, but it’s more costly and more difficult to maintain. It can also be off-putting for some tenants, as you might choose colours that aren’t to everyone’s taste.

It’s a good idea to keep the colour of the walls and trims simple and neutral to appeal to a broader audience and to use the same colour throughout all of your investment properties. This will keep upkeep costs down and will also make it easier to touch up chips or marks quickly if you need to get a property ready for new tenants.

Stick with laminate worktops

The kitchen is an area of the home that’s subjected to a lot of wear and tear, and if you’re not careful with the materials you choose, you could find yourself replacing fixtures regularly as a result. Wooden worktops might look great, but they’re not a great investment in a rental property, especially around sinks as tenants might not be vigilant about keeping them dry and well-cared for.

Plastic laminates are easier to maintain and are an affordable solution for rental properties. “Laminate worktops work best for busy and messy households since they require less maintenance” explain worktop retailers House of Worktops, “they’re easy to clean and don’t need additional treatments”.

Choose large tiles

Dainty details like mosaic tiles might look aesthetically pleasing in a kitchen or bathroom, but they can be a burden to repair or replace if they become damaged. Larger tiles minimise the amount of grouting required, which can become mouldy if it’s not maintained properly, plus they’re neutral so they’ll withstand passing trends without looking dated.

If possible, choose a darker grout that will stay looking cleaner for longer, unlike white grout which can look drab fairly quickly.

Pick plain cupboards

Grooves and details on kitchen cupboards can become a haven for dirt and grime if they’re not cleaned regularly. Plain cupboard doors are a low maintenance alternative that won’t look dated and can be cleaned or repainted easily if need be. They’re also usually a cheaper option so they’re ideal if you’re looking for a budget-friendly style.

Skip the carpets

Carpets are comfortable underfoot but they show stains and dirt quickly and can be expensive to replace – particularly if you have several investment properties to maintain.

Similarly, if you’re allowing pets in the property, carpets won’t last very long and will need vacuuming often to look clean and tidy, so they’re not a good investment.

Hard flooring materials, like tiling or laminate flooring, are far more durable and won’t need refinishing, so they’re more cost-effective for landlords too and easier to maintain for tenants living in the property too.

Final thoughts

When furnishing a rental home, make sure that you’re considering longevity with every choice. It’s tempting to choose the cheapest option, but this can be a false economy, as you’ll wind up replacing or repairing things more frequently.

Instead, opt for materials or fixtures that are built to last and can stand up to wear and tear, however long your tenants are living in the property. Not only will these options make for an easy property for landlords to maintain but they will also help tenants to keep their home clean and tidy too.