17:28 PM, 2nd March 2012, About 10 years ago
Three cheers for competition. A few weeks ago TDS, The Dispute Service, announced Deposit Guard, which at launch undercut the costs charged by My Deposits, and made a push for self-managing landlords, rather than agents. My Deposits have retaliated, by reducing their fees for agents, but not landlords. This may follow, and we shall keep members informed. The third, custodial scheme, used by many, as a free scheme is not affected.
The date of the 2012 budget is 21 March. For many years there has been a steady growth in Private Sector Housing. Along with other landlord groups, the ELA is urging George Osbourne to stimulate investment for the landlord. This Government, and the country needs growth for the economy to recover. There are three basic changes that would achieve this objective :
Buy to Let
The market continues to recover. Paragon has revealed that 25% of new mortgage applications to brokers are now BTL, up from 20% a year ago. One interesting recent development is the addition of Kent Reliance to the list of lenders who will lend on Houses of Multiple Occupation. They offer two and three year deals, and will lend 80% loan to value. BMS and Platform have both reduced rates, and are offering more attractive deals to borrowers. For those tech-buffs, TMW have a free affordability app for iPhone and iPad, that works out maximum lend. The latest figures from the lenders shows that there were 84,000 rental properties added to portfolios in 2011. It is also interesting to note that arrears on BTL loans in 2011 is better than the owner-occupier market, and 13 % of the outstanding value of mortgages is BTL.
European Mortgage Directive
Further to a previous article, this has been delayed by the European Parliament, with the vote not taking place until at least 24 April. The delay is due to a huge number of amendments – 819. If passed the Directive would not allow rental income to be part of mortgage calculations. This is not good news for landlords. However there is an element of optimism in that Denmark which now holds the Presidency of The Council is basically opposed to the Directive. Whatever the outcome, any Directive would probably not be implemented for a number of years.
Private Sector Landlords
Recent figures from The Communities and Local Government show that the gap between the social and private market is now only 200,000, from over 3,000,000 thirty years ago. The vast majority of this is due to the considerable slow-down in the building of council and Housing Association properties. Another important factor in this gap closing is the Right-to-Buy policy from the eighties, which greatly decreased the stock of social housing. The private rented sector now has 16.5% of all homes. This represents a figure of 3.6 million homes, and growing. Over half of these properties have tenants aged under 35. This clearly supports the thesis that the average age of first-time buyers is getting ever closer to 40 years of age. Not all the younger generation can, or choose to live at home, and the waiting lists for the social sector are years. These figures do clearly show the importance of the private landlord, not only to the housing sector, but to economy as a whole.
Local Housing Allowance
The rates are frozen from April 2012, and this effectively means no changes until April 2013 when they will be set at either the previous annual rate uprated by the September CPI, or the 30th Percentile of local rates, whichever is the lower. A note on the Welfare Bill – There will be no more Ping-Pong with The House of Lords. The Government has enacted The Commons Financial Privilege, so preventing any further intervention from the Lords.
Legally there is no minimum term for a tenancy agreement. The most common term used is six months. This gives some security to the tenant. If they prove to be unsatisfactory, there is not too much time before the landlord can end the agreement. Some will use a twelve month agreement, and may include a break clause. If over three years, a tenancy is technically a document of title for the transfer of land, and normally created by deed, and as such the signatures must be witnessed. The ELA office can supply fully compliant and up to date tenancy agreements at only £2.00 per pair.
From next month landlords and agents will have to comply with a new streamlined EPC. From April 6 there will be a new-look design, with the front page giving clearer data on the property’s energy costs, and measures that can be taken to reduce these costs. All properties require a valid EPC before marketing to let, and should be available within seven days of marketing, with the front page on all marketing particulars, and prospective tenants being entitled to see a full copy. Please note that properties on the market with the old-style EPC do not require new certificate.
|Peter Davis – CEO
March 13 – Ipswich ELA Branch Meeting – Holiday Inn, London Road, Ipswich.
From 19.15 – John Pitts – local landlord on ‘What Works For Me’, & Glenn Craig – FSG -Solicitors – Colchester.
March 20 – Great Yarmouth – ELA Branch Meeting & AGM – Cliff Hotel, Gorleston.
From 19.15 – Speaker Sally Chicken – Rainbow Credit Union
March 21 – Breckland – ELA Branch Meeting – Pelorus Office, Rashes Green, Dereham
From 19.15 – Speaker details to follow
March 22 – South Norfolk – ELA Branch Meeting – Scole Inn, Scole.
From 19.15 – Speaker details to follow
March 22 – Broxbourne Landlords Forum – Bishops’ College, Churchgate, Chestnut
From 19.00 – Speakers, including ELA, full details to follow.
March 27 – Southend – ELA Branch Meeting – Civic Centre, Southend.
From 19.00 – Speaker from The Dispute Service – Tenancy Deposits
March 28 – Southend Landlords Forum – The Darwin Room, Tickfield Centre, Southend
From 14.00 Registration. Speakers on Tackling ASB, Maintaining Tenancies,
Benefit Update. Attendees must register at email@example.com,
or call 01702 215830 prior to the Forum
April 25 – Lowestoft – Landlord & Property Investor Show – Aspire Centre, Yarmouth Road,
Lowestoft. – From 14.00 to 21.00, stands in the afternoon, evening presentations –
including: – ELA, WDC, Tessa Shepperson, Housing Action & Fire Safety.
May 8 – Brentwood Landlords Forum – Town Hall, Ingrave Road, Brentwood
From 9.30 – 12.00 – Speakers to include ELA, HMO’s, Housing Benefits.
May 9 – Waveney Branch – ELA Branch Meeting – venue and speaker to be confirmed.
May 9 – Thurrock Landlords Forum – Thurrock Civic Centre, New Road, Grays
details to follow.
May 11 – ELA AGM & Conference – Wensum Valley Golf & Country Club.
Sponsored by – British Gas – Fosters – Lovewell Blake – Fosters – Shergroup
From 11.30 – 16.30. More than 20 stands, buffet lunch.
Please book your place with the office.
May 22 – Bury St Edmunds – ELA Branch Meeting – Farmers Club. Northgate Street, Bury
From 18.45 Speakers to be confirmed.
June 15 – ELA Grand Summer Ball – Dunston Hall – for more information please see
www.investevents.co.uk/elasummerball, or call 01603 340250
December 8 – ELA Christmas Dinner Dance – Brasteds – Framlingham Pigot, Norwich.
Now taking bookings at £32.00 a ticket for our Christmas celebration
All Branch Meetings are open meetings, and please bring a friend, colleague etc.
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