Tag Archives: Accidental Landlord

Consent to Let – Should I tell my residential lender I am now letting the property? Landlord News, Latest Articles

Should I obtain consent to let” has been a very common question over the years asked by both accidental landlords and portfolio landlords who are moving, but wish to keep their property as an investment.

The very easy answer is yes you are contractually obliged to tell your lender and I would not give any advice other than to do so.

However, I understand that some people find themselves in the position where they have already let the property and fear lenders declining the request with no ability to remortgage due to a high loan to value, or being unable to afford an increase in interest rate. Other borrowers also do not realise they have a responsibility to tell the lender, or don’t think they will ever find out.

From conversations I know that many people have “got away with it” for some time, but that does not mean they could be unlucky and the lender finds out tomorrow!

It has been reported in the press recently that mortgage lenders are launching a new crackdown and in an effort to catch borrowers are trawling the electoral register, social media websites and online letting portals such as Rightmove for evidence that a property has been put up for rent.

Having worked in the banking industry myself I know many lenders have quite large fraud departments often headed up by ex-police officers that would probably be used for this type of exercise. This risks of getting caught are not just the issues that may be caused with the property in question, but also being black listed with all lenders using their shared Hunter system.

Some lenders are more helpful than others though, allowing borrowers to let with a “consent to let” form allowing a 1- 2 year period of grace with no increase in interest rate under the understanding that the loan will be repaid or remortgaged to a Buy to Let within this period. However some lenders will charge and increase in interest rate by as much as 1.5% in the case of the Nationwide.

The Chelsea Building Society actually impose a 1% penalty if a borrower has not told them on top of the standard 1% interest rate increase.

I do not want to panic anyone in this situation, but it is important to understand the implications and risks involved.

We already have a very well read and commented on article concerning this called “Letting my house out without telling the lender“, so for continuity I would be most grateful if you could post any comments on that thread please CLICK HERE to commentconsent to let


What is an amateur landlord? Latest Articles, UK Property Forum for Buy to Let Landlords

The phrase “amateur landlord” annoys me, I really wish people would stop using it.

First off, if you were a tenant would you want to be dealing with an amateur landlord?

I don’t recall ever seeing an advert on Rightmove or Zoopla which reads “Amateur landlord offers this stunning 3 bed ……” do you?

Would you put the words amateur landlord in you to let advert?

The phrase smacks of the landlord behaving amateurishly or not having a clue about what they are doing doesn’t it? What is an amateur landlord?

Dictionary definitions of the word amateur include:-

  • activity as a pastime rather than as a profession
  • one lacking the skill of a professional
  • not professional; unskillful

Are these the descriptions that people with just one or two rental properties wish to affiliate themselves with?

A landlord who owns just one property should still act professionally shouldn’t they?

I don’t really understand why the phrase “amateur landlord” ever came about. People who rent out property take an income from the rent, some spend any profits, some reinvest them and all are hoping for capital growth. Whilst this may not be their main profession, and often isn’t, surely they can’t claim to be amateurs? Why would they want to?

Perhaps they don’t want to be called professional landlords in the hope that Consumer Laws will protect them? Well there is no legal definition for what a professional landlord is anyway so I can’t see how that makes any difference. The legal case of OFT vs Foxtons ruled that landlords can be protected by consumer laws, however, the case didn’t set any a criteria for what constitutes a landlord no longer being a consumer.

Would these be consumers?

1) Let’s assume a person earned £500,000 a year as a banker and owned 30 investment properties making a net profit of a further £50,000 a year would that person still be a consumer?

2) Turn the numbers around and let’s assume the banker is making £500,000 of net profit a year from his property portfolio and £50k a year from a non-exec Directorship, what then? Logic might suggest he can’t possibly be a consumer any more because the vast majority of his income comes from being a landlord right? Well I’m not so sure about that either.

3) What about a housewife who owns one property making £50 a month profit after all expenses and has no other income?

The housewife with one property might be the better landlord too, hence more professional?

So is it number of properties which should set the precedent of whether a person remains a consumer or should it be based on what percentage of their earnings relate to rental properties. Based on the three examples above I can’t see logically how it could be either of these.

So, with no precise legal definition for what is a consumer landlord why do we have all these other tags?

Why aren’t landlords referred to as landlords?

If we must have further definitions I suggest the following:-

  1. Accredited Landlord – I like this one providing it refers to accreditation by education, not some “jobs for the boys” Council run scheme which inspects properties. I think it should be compulsory for all landlords to be accredited if they wish to manage their own properties.
  2. Rogue landlord – this is meaningless, either they are criminals or they are not.
  3. Portfolio landlord – a person who owns three or more properties (still a consumer though)
  4. Accidental landlord – that’s almost as bad as amateur isn’t it?
  5. Landlady – such a people run pubs or Guest houses. The legal definition of a female who rents out property is a landlord.
  6. Consumer – a landlord who is protected by unfair consumer contract terms – legal definition is required
  7. Sophisticated investor – a landlord who is not a consumer

Thoughts please?

.


Reluctant landlords begin slow exit from private rented sector Latest Articles, Letting, Lettings & Management, UK Property Forum for Buy to Let Landlords

Latest ARLA research also shows regional variation in tenant demand.

The number of reluctant landlords in the private rented sector (PRS) is falling*, according to research from the Association of Residential Letting Agents (ARLA).

Over the past three months, ARLA member offices have reported a decrease from 26% to 21% in the proportion of rental property coming onto the market because it cannot be sold. This also represents a sharp drop of 21% on the figure of 42% recorded last year.

As these reluctant landlords stop entering the sector, tenants are still faced with strong competition for rental homes. 52% of ARLA members said there were more tenants than properties available. While this represents an incremental fall on tenant-property ratio from the 54% recorded in the previous quarter, this statistic shows that PRS accommodation remains in high demand.

The South East (excluding London) has the highest proportion of members reporting more tenants than properties (67%), whereas London, surprisingly, has the lowest, with just 17% experiencing this trend.

Despite this competition among tenants for properties, there has been an overall fall in the number struggling to meet rental payments. The current figure of 35% remains high, but represents a fall of 5% from the figure of 40% recorded at the same time in 2012.

Ian Potter of ARLAIan Potter, Managing Director, ARLA, said: “Much has been written recently about the recovery of the residential sales market, and it would appear that these effects are now being felt in the private rented sector. While the departure of ‘accidental landlords’ from the sector will be a good thing for the individuals concerned, there is a real and ongoing worry about the level of rental properly supply across the country.

“With competition for the best properties remaining fierce, landlords and tenants alike can benefit hugely from seeking the advice of an ARLA agent. All ARLA licensed agents must adhere to a strict code of conduct, as well as offering client money protection and redress schemes, which protect all parties if things go wrong.”  

It may not be practical or desirable to manage your own properties for the reasons listed below if ….

  • you are new to being a landlord and fearful of getting things wrong
  • your time is more valuable to you
  • your properties are located inconveniently for you to arrange viewings and meet with tenants as required
  • you prefer to distance yourself from the management of your property portfolio and relationships with tenants.

If any of the above apply to you then a fully managed service might be better suited to your needs. See the letting section of this website or complete the form below for more details of the ARLA agent recommended by Property118. Property Management is available for a little as £14.99 per month + VAT.

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Rising numbers of amateur and accidental landlords Latest Articles

Landlord Action logoThe number of amateur and accidental landlords has undoubtedly risen over the last few years as those struggling to sell their properties have instead opted to test the rental market.

Despite having no previous experience, many of these landlords have tried to cut corners by not instructing a reputable letting agent and attempting to self-manage their property. This is when most run into trouble. Continue reading Rising numbers of amateur and accidental landlords


First Timer – Let to Buy Latest Articles, UK Property Forum for Buy to Let Landlords

First Timer - Let to BuyI bought a one bed flat in North London a few years ago to live in with my partner. Recently we purchased our first flat together and have moved into it. I was able to secure the new mortgage partly based on the projected income from the old property – I believe this is known as “Let to Buy” and is becoming quite commonplace.

To avoid becoming a dreaded “accidental landlord” I’ve done a fair bit of research in the run up to moving out to ensure I know what I’m doing. Continue reading First Timer – Let to Buy


No inventory ………. oh Dear!! Landlord News, Latest Articles, Property News

Inventory for Landlords and TenantsAccidental Landlords question regarding “no inventory”

I have taken over as the landlord of a property after a divorce. Before this I was never involved in the property business!!  Anyway the house was purchase about three years ago and the first tenants that took the property are still in situ.  My issue is that I have no evidence of the state of the property prior to the tenant occupying it and I am worried that if they now left and the house was in disrepair I would have not claim against the deposit because I cannot prove what state the house was given to them.  Continue reading No inventory ………. oh Dear!!


Novice Landlords Vulnerable to Deposit Disputes warns AIIC Buy to Let News, Landlord News, Latest Articles, Lettings & Management, Property Market News, Property News

Novice landlords are at risk of deposit disputes as many are failing to prepare all the correct paperwork, warns the Association of Independent Inventory Clerks (AIIC).

There has been a huge increase in the number of accidental landlords over the last few years as many home-owners have been forced into renting their property, due to range of circumstances from negative equity to the depressed housing market and divorce. Continue reading Novice Landlords Vulnerable to Deposit Disputes warns AIIC


New business model for landlords and letting agents Landlord News, Latest Articles, Lettings & Management, Property Investment Strategies, Property News, The GOOD Landlords Campaign

Could the Deed of Assurance (available exclusively to members of The GOOD Landlords Campaign) be the basis of a brand new business model for landlords and letting agents?

A new page explaining the commercial advantages of incorporating a Deed of Assurance into your letting strategy can be viewed by clicking HERE. Continue reading New business model for landlords and letting agents


Generation Rent and the Evolution of the Private Rented Sector Landlord News, Latest Articles, Lettings & Management, Property Investment Strategies, Property News, Property Sales & Sourcing, The GOOD Landlords Campaign

The evolution of the Private Rented Sector is upon us as buy to let renters of the last decade are starting families and the average UK first time buyer is now 37 years old (40 in London). There has been much talk of “Generation Rent”  but how is the letting industry evolving and keeping pace with this rapid change in the demographic of renters and their requirements?

Could letting agents be missing 30% of the Market? Continue reading Generation Rent and the Evolution of the Private Rented Sector


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