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Estate Agents & Letting Agents in Leeds

Here you will find the latest Hudson Moody Wass and property news.

ARLA: Supply up and demand down…except in London

The number of available private rented properties rose in July, according to the Association of Residential Letting Agents (ARLA) monthly Private Rental Sector (PRS) Report.

Agents managed an average of 189 properties per branch in July, compared to 178 in June.
 
Demand across the UK has decreased slightly this month, with an average 35 prospective tenants registered per ARLA branch in July, compared to 36 in June. Whilst this may be a result of the quieter summer months it is a step in the right direction for balancing supply and demand in the sector. However, demand in London has continued to rise, with 40 prospective tenants registered per branch in July, compared to 36 per branch last month.
 
The good news is that a third of ARLA agents (35%) expect the supply of rental properties to continue increasing over the next five years. The East of England is most optimistic, with over half of agents in the region (53%) predicting supply will continue to rise. However, only 15% in the south West and 16% in Yorkshire and Humberside predict continuing growth of housing stock for tenants.

Letting agents are continuing to see increases in the cost of renting for tenants, with two in five agents (37%) reporting rents had increased between June and July; the highest number since tracking began in January, when levels were at 27%.
 
The report also found tenants in the West Midlands have been affected by rent increases the most, with over three-fifths (64%) of agents reporting rents had increased in July shortly followed by the East of England where 53% of agents witnessed rent increases. In comparison, only 21% of tenants in the North West experienced a rise.
 
David Cox, ARLA managing director, said: “To finally see a rise in available rental properties is definitely a step in the right direction; although with demand remaining the same, we still have a long way to go in achieving a balanced and stable private rented sector. Following the changes to pensions made in April, the fact that a third of agents are predicting supply will continue to increase over the next five years could be a result of people releasing equity from their pensions to invest in the buy-to-let market. 
 
“It’s clear from this month’s findings that the growing gap between supply and demand is an issue still rife in the capital; which doesn’t look to be improving any time soon. With the cost of renting continuing to rise month by month, it’s a worrying state of affairs for those hoping to save for their first house and just pushing the aspiration of owning a home further out of reach.”


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Buy-to-let investors must act to beat tax crackdown

Tax specialists have urged buy-to-let landlords affected by Chancellor George Osborne’s tax crackdown to act now to ensure their sums still add up.

Landlords could lose thousands of pounds per property after the Chancellor announced a crackdown on higher rate tax relief in his emergency Budget in July, to be phased in from April 2017.

Specialist accountants have warned that amateur landlords face a severe dent in their profits.

Now accountancy firm Baker Tilly has urged affected landlords to reduce their finance costs ahead of the change.

Gary Heynes, head of private clients, said investing cash and borrowing for property may have made sense to some, but may not work any longer.

“With the changes meaning an extra 20% or 25% or even 40% tax on the finance costs, it may now be better to repay borrowing rather than keep cash invested.”

Others may consider rethinking who owns the property, he said “If held in a sole name, it may be better to transfer to a spouse or civil partner either entirely or partly.

“While this should be free of capital gains and inheritance tax, a stamp duty liability could still arise.”

Heynes added: “It may even be worth considering transferring in whole or in part to adult children. Again, there may other taxes due in doing so, but the income tax and future inheritance tax savings may make it worthwhile.”

He said other landlords with many properties might consider transferring their activities to a company. “They could qualify for incorporation relief which could significantly reduce any tax cost of transferring their property business.

“Companies only pay tax at 20%, and this rate should be reducing in the future, so the impact of finance cost restrictions will be greatly limited.”

The Government estimates that when fully implemented, the restriction to basic rate relief on finance costs will raise an extra £665 million.

Heynes said: That’s a lot of money, but bear in mind that HMRC’s own figures say that only 20% of landlords will be affected. The other 80% presumably only pay tax at the basic rate or have no borrowings are unaffected.”

He noted that landlords will take a further hit in the form of the replacement of the wear and tear allowance for furnished lettings.


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Room for improvement on safety issues, say tenants

New research from AXA Business Insurance has challenged the stereotype of terrible tenants and penny-pinching landlords but found there’s still room for improvement when it comes to safety and security in tenant’s home.

Almost one in three (59%) tenants surveyed by AXA said they believe they pay a “fair price” in rent and almost half (48%) said they have a good or very good relationship with their landlord.

Only 6% of tenants feel their relationship with their landlord is bad or very bad, and while the survey showed that goodwill and acts of kindness are common between property owners and the people who rent from them, it also highlighted significant room for improvement when it comes to safety and security.

Some 43% of landlords have failed to arrange the legally required annual gas safety check, 54% have neglected to install a fire alarm, 68% have not organised an annual electrical safety inspection, and 71% have not organised a carbon monoxide alarm.

In addition, 74% of landlords have failed to put locks on all external windows and doors and 78% of landlords have not arranged a door chain or spyhole to keep their tenants secure.

Darrell Sansom, managing director at AXA Business Insurance, said: “There’s clearly a lot of good-will between landlords and their tenants and our research shows that rental home horror stories and negative stereotypes are few and far between.

“Good relationships are built on trust and teamwork but it’s also important to remember that as a landlord you do have an extra duty of care, a legal responsibility for gas, electrical and fire safety and an obligation to protect yourself and your tenant – so it’s important that you understand all of your responsibilities and double check you have done everything necessary to protect both people and property.”


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AIIC: Landlords must encourage tenants to attend check-out

The UK's landlords must encourage their tenants to attend a check-out at the end of a tenancy.

This is the call from the Association of Independent Inventory Clerks (AIIC), which says that if more tenants attended check-outs, there would be fewer deposit disputes between both sides of the rental transaction.

A check-out takes place at the end of a tenancy and provides the landlord or their letting agent with the opportunity to record the condition of the rental property in comparison to when the tenants arrived.

The AIIC's plea comes in response to data released by the Deposit Protection Service in July, which suggested that 48% of tenants had not attended their check-out.

What's more, some 46% of those who didn't attend said they had either not been invited or were not informed of the date or time.

According to the AIIC, this is where landlords and their letting agents must ensure they are holding up their side of the bargain.

“We were disappointed to see that so many tenants didn't attend check-out and that almost half of these non-attendees were not invited or made aware of the arrangements,” said Pat Barber, chair of the AIIC.

“We are urging landlords and their agents to invite and remind their tenants about their check-out. It is an extremely important part of the inventory process and a successful inventory can go a long way to reducing the likelihood of a dispute at the end of a tenancy.”

“As always, we advise landlords and letting agents to utilise the services of an independent inventory clerk in order to maintain impartiality and professionalism,” she added.


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ARLA and Gas Safe Register join forces

The Association of Residential Letting Agents (ARLA) and the Gas Safe Register have announced plans for closer working and shared gas safety messages aimed at consumers, landlords, tenants, and the private rented sector.
 
The plans for more integrated messaging, which will start to roll out in the coming months, will build on the common aims of both organisations as trusted sources of information for landlords and tenants.
 
David Cox, ARLA managing director, said: “It is vital that agents and landlords who are legally responsible for their tenants make sure maintenance and annual safety checks on gas appliances are carried out by a Gas Safe registered engineer.”

Jonathan Samuel, chief executive of Gas Safe Register, said: “We are delighted to be working alongside ARLA to ensure that these vital gas safety messages are understood by all across the rental sector. ARLA is well recognised and trusted by landlords and together we can do even more to help people understand their rights and responsibilities and improve gas safety.”
 
The Gas Safe Register is the official list of gas engineers who are qualified to work safely and legally on gas appliances. By law, all gas engineers must be on the Gas Safe Register which replaced CORGI. Landlords should only use a Gas Safe registered engineer to fit, fix or service appliances and should always check the engineer’s Gas Safe Register ID card.
 
For more information and to find and check an engineer go to www.GasSafeRegister.co.uk or call 0800 408 5500.


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BTL mortgages reach 1,000

The number of buy-to-let mortgages on the market has hit 1,000 and a seven-year high.

Moneyfacts reports that product numbers have soared, with the number of landlord mortgages on offer hitting 1,000 for the first time since April 2008. It attributes the boom in deals to new demand from thousands of pensioners making the most of the new pension freedoms.
 
Charlotte Nelson, finance expert at Moneyfacts.co.uk, said: “With high rents and poor savings rates, it’s little wonder that the BTL market is booming, with the number of deals hitting the 1,000 mark for the first time in over seven years.

“Unsurprisingly, the growth in products has been accompanied by falling average rates, which have dropped by around 3% over the same period. This can help many borrowers to make easy savings, which means that they can generate even bigger returns on their investment.
 
“However, with a base rate rise on the horizon these low rates won’t last forever, so borrowers need to act fast to secure a low rate. Future legislative changes to the BTL market also mean that potential investors need to keep an eye on any announcements to ensure that BTL will still be profitable.”


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The gap between buying and renting narrows

The cost of buying a home for first-time buyers is £670 a year lower than renting, according to new research by Halifax.

The average monthly costs associated with buying a three-bedroom house in the UK for a first-time buyer was £666 in June 2015, 8% (£56) lower than the typical monthly rent paid on the same property type (£722 a month).

This is in contrast to June 2009, during the financial crisis, when the average cost of buying was 16% (or £1,154 per year) more than the average rent paid.

Even though the average price paid by first-time buyers for a three-bedroom house is 25% higher than six years ago, the monthly costs of owning has come down as the average mortgage rate has fallen to 2.91% from 4.92%. Average rents have grown by 23% in the same period.

In the past year, with the price of a typical first-time buyer home rising by 8%, the difference between the cost of owning versus the cost of renting has narrowed from £85 in 2014 to £56 in 2015 – a fall of 34%. This is partly as a result of average monthly mortgage costs rising by £40 while average monthly rents have only increased by £8.

First-time buyers in London will have, in cash terms, experienced the largest benefit from buying rather than renting a home in the last year. The average monthly cost of £1,338 for those who have bought in London in 2015 compares to an average monthly rental price of £1,419; a saving of £81 a month (£973 over the year) or 6%.

The second largest difference is found in the South West where first-time buyers were paying 9% less a month (£67 a month or £808 annually) than the typical private tenant in the region.

Craig McKinlay, mortgage director, Halifax said: "Looking at monthly costs, the combination of lower mortgage rates and declining rental value over the past six years has made it cheaper to buy than to rent. While numbers of first-time buyers getting on to the housing ladder in the first six months of both 2014 and 2015 has been over 135,000 – almost double the lows seen in 2009 – the issue of building more new homes in the right places needs to be addressed if we are to see sustainable growth.”


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York council meet to discuss landlord and letting agent fines

City of York Council is holding a “decision session” today to discuss the introduction of fixed penalty notices for letting agents and landlords found to be deliberately flouting the law.

The council is looking at three pieces of legislation in particular:

  • All letting and management agents must belong to a redress scheme to ensure any complaints by landlords or tenants are dealt with fairly.
  • All letting agents must display details of all their fees and charges on their websites and in their offices.
  • All landlords must install smoke detectors on every storey of every rented property and fit carbon monoxide alarms in every room where there is a solid fuel-burning appliance.

City of York Council ‘s executive member will also be asked to agree how the new legislation will be implemented and set levels of fines that the council can charge for non-compliance. The recommendation is for a maximum £5,000 penalty for each instance of non-compliance and to delegate the power to the Housing Services Manager who will be given discretion to lower the fine in extenuating circumstances.

Councillor David Carr, executive member for housing and safer neighbourhoods, said: “While we acknowledge that the majority of York’s letting agents serve landlords and tenants well, we want to support and recognise good practice while penalising those who fall below required standards. The city’s private rented sector has grown significantly and accommodates some of our most vulnerable households and we want to ensure they get a fair deal.”

The “decision session” will take place today, Tuesday 25 August, at City of York Council’s West Offices from 12 noon and is open to members of the public or is available to watch live online from: www.york.gov.uk/webcasts


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AIIC launches new training courses

The Association of Independent Inventory Clerks (AIIC) has announced the details of two new training courses taking place later this year.

The “guidelines for inventory professionals” courses are aimed at new and experienced clerks as well as people interested in entering the industry.

Course content will include extensive coverage of the check in and check out processes, basic legal guidelines, advice on handling tenants, information on tools of the trade, how to handle complaints, the dos and don'ts of inventory updates and much more.

Pat Barber, chair of the AIIC, said: “These are the best recognised training courses in the industry and are open to anyone interested in learning the whole inventory process. They provide the opportunity for clerks to gain membership of the AIIC – the UK’s largest membership organisation – or for any other colleagues or interested parties needing in depth knowledge of the whole inventory process.

“As the private rented sector continues to grow in size and the number of tenants subsequently increases, a detailed inventory will only become more valuable to both tenants as well as landlords and their agents.

“The inventory process can be comprehensive, complex and time consuming and here at the AIIC we would encourage anyone entering the industry to undertake some basic training.”

The first course is taking place on 26 and 27 September, while the second course occurs almost two months later on 14 and 15November.

Taking place at the Hilton Hotel in Bracknell, Berkshire, the courses will run from 9.30am to 4.30pm.

There are a limited number of spaces available and booking information can be found at: http://www.theaiic.co.uk/product-category/training/.

 


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Ealing rogue landlord slapped with £75k penalty

A west London landlord has been ordered to pay a total of £75,215 for failing to licence four properties, protect tenants, comply with improvement notices, and comply with prohibition orders.

Gunapalan Vamathevan, also known as Mr Bala, the owner and manager of 51 and 53-55 Old Oak Common Lane, and 10 St Andrews Rd in Acton W3, received fines for nine offences at Ealing Magistrates’ Court.

He was ordered to pay court costs of £5,395 awarded to the council and a victim surcharge of £120, with a fine of almost £70,000 bringing the total penalty of £75,215.

Councillor Ranjit Dheer, cabinet member for safety, culture and community services, said: “This case is a significant result against an unscrupulous landlord who has previously been prosecuted by the council for his disregard of licensing regulations. 

“We make every effort to ensure residents in our borough are well protected and have decent living standards. We take a tough line against anyone who deliberately flouts the law and Mr Vamathevan has quite rightly been given a very heavy penalty for his prolonged and intentional illegal behaviour.” 

The successful prosecution was brought by Ealing Council’s regulatory services, following an investigation into reports received in 2014 that the properties were being operated as unlicensed HMOs. 

A warrant of entry was executed on the three properties in Old Oak Common Lane in June 2014, where council officers found evidence they were being operated as unlicensed HMOs, contrary to Section 72(1) of the Housing Act 2004. They also found breaches relating to the management of the HMOs. 

Subsequent notices were served in relation to the condition of the properties, including prohibition orders under section 20 of the Housing Act 2004 for dangerous staircases, and improvement notices relating to serious hazards.

An inspection of the property in St Andrews Road in October 2014 also found it to be operating as an unlicensed HMO. A subsequent prohibition order was made for a hazardous staircase and an improvement notice was also served on Vamathevan relating to lack of fire safety in the property.  

Numerous HMO licensing application forms along with warning letters were sent to Vamathevan, but no applications were submitted for the properties. Also, follow up inspections by officers found that the required works under the improvement notices had not been carried out and the prohibition orders had been breached.

The council takes a robust approach to such offences and prosecuted Vamathevan for failing to licence the properties as HMOs, failing to manage the properties and failing to comply with the notices served. In February this year he eventually submitted the HMO licence applications, after prosecution for the offences had begun.

 


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