Category: Lettings

Is A Leasehold Property A Good Buy-To-Let Investment?

Posted on by Tim Hill

[Image source: Deposit photos]

When investing in a buy-to-let, there are countless considerations to make, but one that often gets overlooked in discussions is whether looking at leasehold properties is a good use of an investor’s time. When you buy a freehold building, you own the building and the land it’s on until the time comes to sell it, but leasehold means you only own the building for a set period. So, what does this mean for landlords, and are leasehold properties a good investment?

What is a leasehold property?

A leasehold property means you own the property in question for a specific length of time, which is the term of the lease. When the lease expires, the ownership transfers to the person or entity that owns the land. For a landlord, the idea of the investment simply being lost can be a frightening prospect and can put people off wanting to invest in a leasehold home.

Leases can range from 99 or 125 years all the way to 999 years, the latter of which is as good as a freehold. Theoretically, the closer the lease expiry date is, the less valuable it becomes and it can be harder to recoup your investment if you’re looking to sell. If the remaining term falls to 80 years or less, it can be hard to obtain a mortgage on the property, which is something potential investors need to bear in mind when looking for buy-to-lets.

The key differences with a leasehold property

Most leasehold properties are flats, though a leasehold can apply to any property. Properties purchased through the shared ownership scheme may also be leasehold. Because a leasehold means you don’t own the land the property sits on, you don’t have any ownership of communal areas in the case of a flat, meaning stairs, hallways and gardens are not your sole responsibility.

However, while leaseholders usually pay a set fee to the freeholder which goes towards the maintenance of these areas, from June 2022, new legislation on ground rent charges means these rents will be banned on new residential leases to avoid future rent increases, which makes leasehold properties more affordable.

What to consider before investing

The first question an interested landlord needs to ask is ‘does the lease permit letting?’. Not all leases will allow you to sublet the property, so if your intention is to purchase the home as a buy-to-let, this is a critical question to ask. If you go ahead with your buy-to-let without checking this first, you could find yourself in breach of your lease and that can come with fines and complications later on, so it’s important to check first.

Landlords also need to ensure they take into account the cost of maintenance and repairs for the property, as with any buy-to-let, which some leases enforce via a sinking fund to cover any unexpected repairs. Investing in a property as a buy-to-let means landlords need to think about the saleability of the property for the future, as it’s not their primary residence. Problems can occur, as previously stated, if the lease is less than 80 years, so extending a lease may be beneficial when purchasing the property but this can be a costly endeavour.

The benefits of leasehold buy-to-lets

It’s not all bad news when it comes to a leasehold property, especially when it comes to finances. Because of the challenges that you need to face when you buy a leasehold property, you can often find great bargains on the property market as they’re less appealing for many investors. If you’re willing to overcome these hurdles, you could find yourself getting a great deal upfront compared to a freehold.

There are some restrictions with this type of property, because you’re effectively renting space from another landlord who is the freeholder, so you’re at their mercy in terms of what you can do to the property. However, from a landlord’s point of view, the likelihood is you only want to make the property presentable and won’t be investing in any large-scale renovations, so this may not be an issue at all.

It may be possible to extend your lease if you’ve owned the property for at least two years, or if it only has 80 years or less left. Extending sooner rather than later is the best option, as the shorter the remaining lease is, the more expensive it will be to extend. Lease extensions are usually for 90 years, and the cost is typically 50% of the ‘marriage value’ of the property, or the extra value the property would gain from the longer lease, as well as legal fees, Land Registry updates and property valuations.

Is investing in a leasehold the right decision?

The process of investing in any property is complex and time-consuming, and it requires in-depth research to ensure you’re making the right choice. A leasehold may seem more complicated than buying a freehold to rent out, but it can still be a highly valuable investment depending on the buyer’s circumstances. Of course, this might not be the case if it is sat on the market with a short lease and you need to sell it fast.

The trick to investing in a leasehold is finding an agreement that suits the needs of the investor. If it’s an affordable property with agreeable lease terms and you aren’t in any rush to sell the property on, it can be a great way to save money upfront and grab a bargain. There’s certainly nothing wrong with investing in a leasehold property, if it meets the criteria you need from it – you simply need to be aware of the differences that a leasehold property has to a freehold.

There are also some unique perks, such as not needing to worry about the upkeep of communal areas, which frees up your time when you’re managing your buy-to-let portfolio. The best advice for landlords looking to buy a leasehold to rent out is to seek professional advice and speak to local buy-to-let agents who can offer advice based on the potential yields for the surrounding area. This will ensure the best returns, whatever the type of property bought.

Helping Viewers See The Full Picture: How Agents Can Highlight Potential

Posted on by Dakota Murphey

[Image source: Deposit photos]

When your agency or property management company is tasked with selling a home, it often goes one of two ways; the property is in great condition, has been renovated and practically sells itself or it’s time to get creative as there’s not much to shout about. In scenario two, the best way to sell the property is to highlight its potential, but sometimes it can be difficult to see where that potential lies.

If you’re struggling to see it, then there’s a good chance that viewers are going to encounter the same problem. To help viewers see the full picture of your property portfolio, here are some helpful tips to share as you show people around.

Increasing the property’s footprint

Most people want as much space from their new home as possible, perhaps because they are looking to move to something bigger or they are simply trying to move up the property ladder. Building outwards is one of the easiest and most common ways to improve the footprint of any property, with rear extensions being favoured as most people are happy to lose some of their gardens to improve their indoor living space.

According to CheckATrade, the average cost of a 20m2 extension is £44,000 while expanding a home can add between 10 – 20% to its value. So not only can you use adding an extension as a way to improve potential buyers’ lives and living spaces but also it can be a way to improve their returns when they come to sell.

Adding extra storeys

If the outdoor space is already limited or there isn’t much scope for a rear extension, consider whether an additional storey is a viable option. This could be a loft conversion which can be a quick way of increasing space and adding value, or perhaps a basement with lower floor conversions, which can be a great way to improve the energy efficiency of a home as there are fewer directly exposed external walls.

Of course, there is also the potential for a double-storey extension which will greatly increase its capacity but will require substantial funds. As an agency or property company, you can check whether a house is suitable for extension or additional storeys by asking for pre-planning advice from the relevant council.

Having an informal discussion can give you enough scope to know whether an extension is viable and if it’s a smart marketing strategy as you show viewers around. It requires some additional groundwork on your part but can be worth it to paint a better picture of the property’s potential to viewers who may otherwise be unsure about an extension.

Decluttering and cleaning

House viewers want to be able to imagine themselves living in the property they are being shown around but one filled with clutter and that needs cleaning can be a distraction from those thoughts. For starters, a decluttered home allows viewers to better understand how much space there is in the property they are viewing.

It is also much harder for them to envision how they would live their lives in a house if someone else’s clutter is everywhere to be seen. Sure, it’s not possible to remove the vendor from the home but encouraging them to make their home as aesthetically appealing as possible is a great boost to their chances of selling.

Similarly, a viewer who goes into a home and is met with visible dirt or dust, or perhaps some unsavoury smells, is going to have to work hard to overcome those issues to imagine themselves living there. It might be fine for a buy-to-let buyer but if you are selling the property as a home rather than an investment then it must be set up to succeed, rather than fail.

Acquiring nearby land

Sometimes an opportunity presents itself that allows a buyer to invest in more than they initially think. Consider whether there is any adjacent land available, whether it’s from a neighbour or even just a bit of extra land a freeholder is willing to part with.

This can greatly improve the prospects for potential buyers as they can expand their home, add an outbuilding, add electric car charging or look for further investment opportunities. A quick enquiry with the Land Registry can let you know who owns the land and whether it’s possible to approach a sale.

Updating doors and windows

Doors and windows can be an important selling factor when it comes to buying a home. With old doors and windows, the buyer knows the time they have until they need replacing is limited but again this is an opportunity to highlight the value of upgrading.

Whether it’s the front door, side door, or garage door, security shouldn’t be overlooked and the same goes for insulation levels, where you can show the EPC potential can enjoy a sharp rise with some new doors and windows.

Reconfiguring the layout

Open-plan living is very popular at the moment and while you won’t be able to reconfigure the layout yourself, exploring the options ahead of showing people around can help put the home’s potential into perspective.

Homes with dated kitchens are a great opportunity to showcase the potential in an open-plan layout as people will already be feeling as though they want to update it. Similarly, outdated bathrooms are a great selling point and shouldn’t immediately be something to try and gloss over.

Spending time layout out and describing what improvements are possible and how they could be easily implemented is useful information that viewers can take with them as they think about their options. Updating both rooms will not only represent a great investment but provide real value to the people who live there.

Other layout considerations to point out to potential buyers include installing a downstairs loo, adding a room in the garden as an office or creating a kitchen diner to free up another room in the house.

Are Top Floor Flats Harder For Estate Agents To Sell?

Posted on by Dakota Murphey

The sale of flats and apartments makes up around 1 in 5 homes in the UK (and about half of all property transactions in London). Recent price inflation has lagged behind the growth enjoyed by houses and many factors have contributed to slower capital growth for leasehold flats, among them the leasehold and cladding scandals of 2017 and the COVID-19 pandemic.

However, in 2023, the demand for flats and apartments in the UK is expected to strengthen. Urban living is gaining traction again post-covid, while budget-squeezed households and high mortgage rates mean property buyers are looking for affordability and value for money.

Of course, it’s easy to make sweeping statements and predictions, but don’t forget that demand is also majorly affected by property specifics. Flats come in all shapes and sizes and can be found in a wide range of locations, sited on different floors in purpose-built blocks or converted buildings. Some are new-builds and are assumed to be in pristine condition, while others are charming period flats with original features. And that’s before their leasehold status is taken into account…

In this article, we’ll take a look at the desirability of top floor flats. Is it easier or harder to sell a property on the highest floor of the building? What are the advantages of living on the top floor? Are there any perceived drawbacks of this type of property and how can estate agents address potential buyer concerns and allay any fears?

What are the key selling points of top floor apartments?

Top floor flats have several obvious advantages over properties on lower floors, and these selling points provide excellent opportunities for marketing the sale:

Great views

One of the main attractions of living in a flat on the top floor is the views over the neighbourhood. Depending on location, this could be a panoramic sea view, a sweep of the eye across the city’s rooftops or a glimpse of greenery in a public park on the opposite side of the road. Urban property buyers, in particular, will be looking for great views, with London’s iconic cityscape being top of the list of desirable vistas.

Natural light

Abundant natural light is high on homebuyers’ wish lists, especially in smaller properties where it can add a sense of space. In a recent survey, nearly 85% considered this the most important criterion when buying a property. Compared to ground floor or mid floor accommodation, top floor apartments have a natural advantage when it comes to light. Maximise the effect by opening curtains and window dressings to let the light flood in and show off the bright and airy feel that buyers love.

Greater privacy

Privacy and seclusion are also highly prized, particularly among city dwellers who tend to be looking for a peaceful sanctuary to retreat from the urban hustle and bustle. Moving to the top of the building means less traffic noise from the streets below, less commotion on stairways and lifts and generally fewer disturbances. With nobody living above and the windows ideally not overlooked by nearby buildings, a top floor flat combines the convenience of urban living with the ultimate in privacy.

Good security

Being the least accessible property in the building has definite advantages when it comes to home security. Most burglaries are initiated by thieves spotting an opportunity such as valuables left in plain sight, an open window or unlocked door to gain entry. It is the reason why ground floor and basement flats are at greater risk of break-ins. None of this applies with a top floor flat, which is inherently the safest place to be.

Adding value

While it is much more difficult to add capital value to a leasehold flat compared to a freehold property, there may be an opportunity with a top floor flat. It may be possible to develop the unused loft space above, subject to the lease and the necessary consents being obtained. If the attic does not form part of the demise, could the freeholder be approached with an offer to buy the space in the loft? It’s worth pointing out the possibilities to any interested buyer.

What are the potential drawbacks of top floor properties?

Top floor apartments can be an excellent purchase, and the best properties should have no difficulty achieving the optimum price. In some cases, people prefer a low-rise flat because they are scared of heights or are worried about the re-sale value. Flats on a short lease might be even tougher to sell if they are on an unpopular floor in a building. That said, agents need to be prepared to address some of the downsides potential buyers may identify and counter any negative perceptions.

Too many stairs

A flat at the top of the building means many flights of stairs to climb, unless of course there’s a lift. Older properties and period conversions may not have one, which could be a real problem for young families with babies in prams, elderly people and those with mobility issues. Even fit and healthy buyers may feel uncomfortable having to go beyond the second floor to carry the shopping up or the bins down, and bulky deliveries such as furniture could also be an issue.

Roof leaks

It goes without saying that properties on the top floor, with no one living above, will be most vulnerable to any damage caused by roof defects and water leaks. Most top floor flats will be absolutely fine and unless there’s any evidence to the contrary when buyers come to view, there’s no reason to draw attention to issues that don’t exist. In any event, should water start leaking through the ceiling, the freeholder is typically responsible for any roof repairs.

Lack of outdoor space

Ground floor apartments and basement flats may have the benefit of a patio or private garden, which constitutes a valuable asset that top floor accommodation simply cannot provide. In fact, outdoor space is much harder to come by in apartments at the top of the building, but usually, the abundance of natural daylight and great views make up for it. Top floor flats with a balcony, a roof terrace or even a roof garden, and luxury penthouse apartments, are clearly premium properties and need to be marketed as such.

Conclusion

In the end, there’s unlikely to a simple answer and most often it will come down to the individual apartment you are trying to sell. Whilst many of the negatives to top floor flats are self evident to potential buyers, it’s important to check for all the positives as well, know the positives as some might be more easily missed. This should help you to achieve maximum value for your clients.

How To Resolve Tenant-Landlord Disputes Without Going To Court

Posted on by Dakota Murphey

Every landlord needs to be prepared for a deposit dispute because it’s an inevitability that comes with the job. Whether a minor quibble or a larger dispute, knowing how to handle those conversations professionally (and without the need to take the matter to court) will save you a lot of time and money. There are a few ways you can achieve this. Read on for suggestions of how to deal with tenant-landlord disputes quickly and calmly.

Prevention is the best cure

As a landlord, the old phrase ‘prevention is the best cure’ couldn’t be more appropriate. You don’t want to be wasting time constantly handling disputes with tenants, so it’s best to avoid them in the first place so that a dispute is a rarity rather than a common occurrence.

Many arguments over deposits arise because either the tenant or the landlord don’t realise they’ve broken their part of the lease agreement, or they don’t understand their rights. The best way to achieve this is to know the law fully and stay abreast of any changes to housing legislation, so you can make the necessary amends. It results in happier tenants and lowers the chance of you having an empty rental property for too long, as well as reducing the risk of legal issues arising.

Communicate face-to-face

So many problems with tenants can be resolved quickly simply by having a face-to-face conversation with them and ironing out any issues in person. Keep your temper calm and don’t let the conversation get out of hand. There may well be an honest solution to the problem which both parties are blowing out of proportion, and trying to resolve it over text or email only makes the likelihood of that happening higher. Another way to keep tensions at bay is to meet in a neutral environment, so everyone feels safe and able to say their piece.

Contact a mediator

If you’ve met and tried to discuss the problem to no avail, a professional mediator can help you make progress and find a solution that works for you both. In a mediation, both parties come together with an impartial mediator to reach an agreement and resolve the dispute.

The mediator will be trained to deal with these types of situations so they’ll be able to act as a neutral but experienced party. They don’t assist with working out the issue directly. Instead, mediators guide the parties to negotiation in a constructive way. Mediation isn’t as formal or expensive as the litigation process so it works well for tenants who are seeking an informal solution and landlords looking to save on costs.

Keep detailed records

Having detailed records to hand makes it much easier to resolve disputes because you’ll have evidence of what’s been agreed and what has occurred since. From correspondence with the tenant regarding the issue at hand, to photographic evidence of the property before they moved in and its current state, a paper trail makes it much easier to fall back on hard facts when the time comes. And, if you need to escalate the issue to a legal team, records will be very helpful to show that it’s not just a case of your word against your tenants.

If you handle multiple rental properties, you should keep a file for each one, whether paper or digital, so you can keep your property management records organised and up to date. It can deter a tenant from taking the matter to court themselves if they know that you have evidence to back up your claims and disprove theirs.

Hire a specialist solicitor

If the problem has escalated and you haven’t been able to informally handle it, then the next step is to hire a specialist solicitor who has experience of landlord and tenancy law and will be able to advise you on the best course of action. Contact from a solicitor can often dissuade a tenant from taking the matter further and may help you both reach a fair agreement outside of court.

A specialist solicitor will be able to advise you on your legal rights, and those of the tenant, as well as the likelihood of you getting the result you’re looking for. It’s certainly an expense that you don’t want to pay for, but it can be a beneficial step to take if court is looking likely.

Put it in writing

Putting your complaints, or having the tenant put their issues down, in writing formally dictates any misgivings either party has about the property that’s being let. It’s important when you do this to be as specific and accurate as possible, from the occurrences being disagreed upon to the dates the dispute spans. It’s also important to take into account any previous correspondence.

The reason for doing this and having a record of the issue is that if you aren’t able to handle it out of court, having a document in place that outlines exactly what the issues are will come in handy when resolving it with a legal team. It also ensures you won’t forget any details further down the line, as court proceedings can take some time.

Court involvement as a last resort

Where possible, both parties should avoid taking the matter to court, as it’s time-consuming and incredibly costly. But sometimes it’s the only way to reach a decision. Just know that if the matter reaches the courts, you could be in for a long wait and a lot of legal expenses to have the matter settled, so it’s not a decision to take lightly.

The housing industry has been on a rollercoaster of activity in the last few years and it’s led many people to invest in rental properties. But it’s vital that you understand the issues that can arise with a buy-to-let and know how to mitigate them as much as possible, to save yourself time, money and the need to find new tenants. The smoother you can make your relationship with tenants, the better it is for you and them, so it’s worth making clear who is responsible for what and having thorough records in place to reduce the risk of a dispute.

Sustainable Property Maintenance Jobs Agents Shouldn’t Ignore

Posted on by Dakota Murphey

Property maintenance doesn’t just improve the aesthetic quality of a home, it also helps to retain value, or even significantly increase it. Regular maintenance could increase a home’s value by at least 1% per year while neglecting it can cause properties to depreciate.

Any home is a valuable asset and when it comes to selling, those in better condition understandably tend to fetch a higher price. That’s why it’s essential to carry out regular maintenance on a property or asset, yet some remedial projects are easier to work on than others.

Running the vacuum cleaner around and trimming the hedges is one thing, but grabbing a ladder or some heavy-duty equipment isn’t something most people can do on a whim. Here are our essential green property maintenance tasks that agents shouldn’t ignore when talking to their clients.

Upgrading insulation

Insulation is essential all year, not just in the winter. Effective insulation can help to regulate temperature during the summer months and retain heat when the chill hits. Insulation materials come in many forms and if you are looking for sustainable materials we recommend natural wool, cork, hemp or cellulose.

Using natural materials to insulate a property rather than synthetic or man-made ones does mean that they have a relatively limited lifespan, however. For example, cellulose insulation is typically good for 20 to 30 years but can begin to degrade by the 15-year mark.

Upgrading a property’s insulation provides an energy efficiency boost and makes it more sustainable as fewer resources are required to maintain a comfortable temperature. From cavity walls to the roof and floors, there are plenty of opportunities to upgrade the insulation in a home to improve energy efficiency. And, with the cost of living crisis pinching wallets, being energy efficient is more important than ever.

Gutter cleaning

Perhaps one of the most common household maintenance tasks that gets forgotten or neglected is cleaning out the guttering. They can get clogged with leaves and debris that blows in throughout the year and this causes a blockage.

It is a relatively simple fix but often requires the assistance of a long ladder or a high-level platform to give you the access you require. Without the gutters diverting any rainwater away from the home you are putting your property at risk of water damage.

That water can pool in places which causes leaks that seep into the roof as well as the frames and fascia of a property. If left unattended this water can lead to mould, rot and mildew which risks your tenants’ health and can cost thousands to repair.

General roof surveys and maintenance jobs

The roof is often a property’s first level of protection against the elements, be that the wind, rain or even the sun. But, unlike other areas of a property, it’s difficult to check on the status of the roof due to how high it is.

You just can’t see the roof well enough from the ground so it’s important to gain a better perspective, particularly following a heavy downpour or strong storm. High-access equipment hire allows you to inspect any roof damage from a better vantage point.

Having the right high-level equipment allows for other maintenance tasks to be completed, such as:

  • replacing any broken or missing roof tiles

  • cleaning the outside of windows

  • repointing the chimney breast

  • repairing the roof and gutterings

  • painting elevations and chimney pots, and

  • inspecting solar panels (if the property benefits from having them installed).

Having a safe platform in place to make these comprehensive maintenance checks can also help you to oversee whether a property’s renewable energy sources are running effectively.

Creative and sustainable landscaping

Landscaping and gardening is a job that many people put off but once completed can transform how a home looks and feels. Not only will the outdoor space be easier on the eye, but it can also be more welcoming to residents’ guests and encourage local wildlife to flourish if you take an eco approach.

Many people are opting to include a wild zone in their outdoor space to promote any wildlife to move in, and potential tenants looking for outdoor space may wish for an eco-friendly environment outside their rental home. Ideas include ponds, allowing a patch of grass to grow wild and uncut and composting facilities. It’s important to reclaim as many materials as possible for any landscaping project to help make it as environmentally friendly as possible.

Also try to consider using plants that are native to your area. For example, bell heather is prominent in Kent and adding some to your wild garden will help boost the numbers of bees, moths and butterflies that thrive on it.

Install rainwater collectors

Countries like the UK experience plenty of rainfall throughout the year, even when it’s summer and the sun is meant to be shining. Rainwater harvesting allows homes to conserve water by collecting it throughout the year and using it for common household chores. For instance, harvested rainwater is ideal for flushing toilets, washing cars or watering flowers during hot and dry spells.

This allows residents to cut down on their water consumption, which is not only good for the planet but also helps reduce water bills. Modern toilets use as much as five litres per flush, while older models made before 2001 use up to 10 litres per flush. Depending on how much space you are working with, rainwater collection barrels can collect as much as 210 litres.

Electric car charging point

Perhaps one of the most important upgrades property management companies can make to a modern home concerns transport. Electric cars are very much the future of the automotive industry and with the sale of new petrol and diesel cars to end by 2030, that future is rapidly approaching.

Requiring a qualified electrician, electric car chargers are an important upgrade due to the prominence of electric vehicles on our roads. Zero emissions cars continue to grow in popularity and an electric car charger at home is beginning to be a must-have.

With homes that have an electric car charging point installed selling for 30% more than those that don’t, it is a significant consideration to make. Electric car chargers can cost up to £1,000 to install but considering the value they add to a home, and the convenience they provide, they are a worthwhile and sustainable home upgrade.

How Landlords Can Tackle Rental Reforms and Energy Changes

Posted on by Dakota Murphey

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

Posted on by Dakota Murphey

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

Posted on by Dakota Murphey

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?

Posted on by Dakota Murphey

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?

Posted on by Dakota Murphey

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.