The NLA Tenant Check System to confirm tenant’s credentials

The UK’s leading trade association NLA has cautioned landlords that failure to collect rents from tenants can take six months to resolve the issue and the legal wrangle may cost £6,000. The increasing demand for rental accommodation has heightened the risk in letting property to unscrupulous tenants.

The National Landlords Association has introduced Tenant Check service which can help landlords in verifying credentials of the prospective tenants. The service will confirm if the tenant is employed and has the capacity to pay rent.

NLA Tenant Check system is user friendly and its basic package contains Country Court Judgements. The detailed profile of a prospective tenant can be obtained within 3 days. It provides comprehensive information apart from ID verification checks and confirmation of employment and income. Access to the service is offered for £6 to the members of NLA and to other landlords for £28.

According to NLA Chairman, David Salusbury, the NLA Tenant Check will ensure reliable screening of the prospective tenant and minimise risk of rent arrears.

By entering a few details of the tenant in the NLA Tenant Check system, landlord will be able to get entire relevant profile of the prospective tenant before finally deciding to rent the property. The tenants will be benefitted by proving their trust worthiness and the deal will establish good relationship between the two.

Buying to let, is a new way of increasing wealth

Buying a property and letting it, has become a side-line business to increase their wealth for many in the UK. People own up a large portfolio of properties and create a secure source of growing income. Letting property is not just restricted to apartments, flats, student lets and holiday lets and extends to commercial properties such as offices, shops, storage space and workshops. These commercial properties present in towns and communities possess large potential of earning money for the property owners.

The investment risk involved in is very low compared to stock market and other investments. A right property letting never fails in giving good returns. However one should be more particular about the location of the property bought for letting. An up-coming area where renting is in good demand, lends a cutting edge to your property. Presence of amenities in the near vicinity, such as shops, malls and transport can fetch bigger letting charges for your property.

A commercial to let property carries slightly more risk but offers big returns on investment. Presence of big malls and large chain retailers diminishes chances of getting better returns for letting commercial property. Very often such properties become dead assets. One must do better research before buying commercial property in an area for letting. Buying a larger property and later splitting in to smaller shops and offices can increase value for letting.

Remember one important point. After buying to let property do not let it be idle for a long time. The cost of delay can be much higher than your investment.

Tenant Loans for UK tenants

‘Loan’ is a term well familiar with all classes of people. Businesses big or small, institutions, people in employment, individuals or families, and owners of property all need and avail of loans on one occasion or the other. Reasons for seeking a loan vary from people to people.

Tenants are no exception. One may think what can prompt lenders to give a loan to a tenant? In the UK, loans are designed to cater to the financial needs of tenants. The loans are called Tenant Loans. These are specifically designed for the tenants who do not own any property. These loans are offered on simple terms and conditions. The procedures for availing these loans are also simple. Loan seeker is not required to furnish any security. However the rates of interest are usually high. Some lenders charge comparatively lower rates.

To qualify for a loan you must be employed in the UK, drawing good salary and having a checking account in a UK bank. Another condition for qualification is the stay of minimum 12 months in a rented house in the UK. Maintaining a good credit score enables you to seek loans of higher amounts at lower interest rates. These qualifications facilitate quicker disbursement of loan by the lender ranging from £500 to £25000 at the rate varying from 8 to 18 per cent.

You must search for a good lender before finalizing any deal.

Halifax brings momentum to mortgage rate cuts

The UK’s largest lender, Halifax, further accelerated fall of mortgage rates by announcing cuts in the cost of deals. This is the second move by the lender in recent weeks.  The two-year and five-year fixed rates were reduced by up to 15 basis points. The Bank of Scotland, BM Solutions and Intelligent Finance belonging to HBOS groups, also resorted to cuts on different rates including self certification and buy-to-let loans. The changes bring a sigh of relief to the borrowers who can expect further improvements in the rates in the coming months.

The past few weeks witnessed reduction in rates from Lloyds TSB, Abbey, and Woolwich. Nationwide reduced rates to the extent of 30 point basis. According to broker David Hollingworth, at London & Country Mortgages, for the first time in the past one year, lenders are trying to create more business rather than opting to pull away from the market. He is however unsure whether the trend will continue to improve further.

The downtrend in fixed mortgage rates was triggered by the rapid fall in the swap rates for short-term fixed lending in last few weeks. According to brokers, the initiative of number of banks to move rates downwards for attracting more customers is good news for homeowners.

Rising house prices are causing desertion of villages

The ever increasing gap in the local income and property prices is driving young couples to cities for buying a home.  According to a report from National Housing Federation the average cost of a family house in South Buckinghamshire, is 24 times more than the average local wage at £525,000. A crash of even 35 per cent in the property price would bring the price to a level which will be 16 times more than the average local income. The findings of the National Housing Federation would be backed by Liberal Democrat MP, Mathew Taylor, who was asked by Gordon Brown to submit report on rural housing. Taylor, who is likely to recommend restriction on purchase of second homes by the weekenders, believes that migration of city dwellers in large numbers to the country is causing phenomenal price rise. 800,000 Britons are moving out of cities for good peaceful life, on account of easy commuting and availability of broadband in the villages. This is pushing up prices of property and likely to result in reverse migration of locals from villages. According to Taylor, developments in villages are restricted to retain the green fields in coming 20 years. But the very people who can sustain these villages are migrating due to unaffordable living on account of very low income. He is likely to recommend that councils should grant permission for construction of affordable homes in villages which could be sold only to locals, with a cap on price.

New thrust on adequate affordable housing in rural areas

A membership organisation, The Rural Services Network, devoted to bettering services in rural communities in the UK, has positively responded to the new review of the UK’s housing scenario. It stated, in response to the report ‘Living Working Countryside’, that it broadly agreed with the ‘main thrust’ of the report. The report found house prices in the UK villages largely being pushed up by an increasing influx of people moving from cities.

Commenting particularly on the issue of assisting first-time buyers, The Rural Services Network stated, “Young people are the lifeblood of the countryside. a spokesman added, “Generally we welcome the report. In spite of the credit crunch, affordable housing remains one of the most pressing issues that affects the countryside. Adequate affordable housing in rural areas is very vital not only for people who are living in the countryside but also people who live everywhere. A whole host of key rural workers, including teachers, nurses and police officers cannot afford to buy their own homes.”

The Campaign to Protect Rural England (CPRE) also welcomed the report. “It is so refreshing to read a report that puts long term planning, community consent and local distinctiveness at the heart of its recommendations,” stated Tom Oliver, Head of Rural Policy at the CPRE.

Renting Residential Properties is an alternative to other forms of investments

The recent years have witnessed an increase in the investment in the rental properties. A report in the past had predicted very high growth in the private rental market by 2010; which is proving to be quite true. Flexibility is the main factor which has attracted more people towards renting.

Buying and letting has become an alternative form of investment. Landlords have realized its importance in generating steady income and enhancing value of investment. It is a dual benefit investment in the form of rental income and capital growth.

Owning a property in itself is the guarantee to wealth and security. Renting ensures multiplication of wealth with minimum effort.

Proper management of property and carefully chosen tenants minimize owner’s risk. Renting is not a simple task; it requires good knowledge about prevailing rent charges, legal compliance and detailed information of prospective tenant.

Renting is more popular among those who cannot afford investment in buying.
Other factors include:

•    Flexibility in moving on account of job change or transfers.
•    Reluctance on account of possible split; couples co-habiting prior to marriage opt for renting.

Landlords also prefer renting their property for reasons such as:

•    A good source of steady income.
•    Availability of legal cover, and security, due to government regulations. The fear of losing ownership has been eliminated.

Stock market volatility and problems in pension schemes have tilted people’s attention towards investment in rental property.

House prices in the UK villages driven up by unabated influx of people

The new review entitled ‘Living Working Countryside’ has found that house prices in the UK villages have been largely driven up by an unabated influx of people moving away from cities.

Villages will end up becoming ‘exclusive enclaves of the wealthy and elderly’ unless provision to build more affordable housing is made. This is the conclusion drawn from an independent review.

The disparity between high house prices and low average incomes in rural areas of the UK was also addressed in the report. The average local wage of people in rural areas is £20,895, which is £4,655 lower than the average wage level in better off, urban parts of the UK.

This disparity was coupled with the worrying fact that the average house price in rural areas was £8,000 more than in conurbations. The report concluded this meant young people struggled to buy homes in the countryside. The figures only confirm this fact. In rural parts of the UK first-time buyers made some 17 per cent of purchases, compared with almost double or 33 per cent in urban areas of the country.

Launch of new fire safety guidance for rented properties welcomed by landlords

The issue of fire safety in rented properties had been a bone of contention between landlords and the authorities. The landlords were unhappy with inflexible approach of the environmental health department in enforcing fire safety measures which were not only expensive but also spoiled the elegance of the rented property.

The launch of new fire safety guidance will address the long felt need of single document defining landlord’s obligations towards safety of the rented property.

The UK’s National Landlords Association welcomed the safety guidance which will help in minimizing current figure of 300 deaths per year caused by the residential fires. According to NLA Chairman, David Salusbury, the single document on safety, in the form of LACORS (Local Authority Coordinators of Regulatory Services) guidance will remove confusion created by the fire safety legislations in the minds of landlords about their obligations. The guidance will minimize enforcements as the landlords will be well aware of requirements of safety in the rented property.

David Salusbury goes on to add that safety legislation is applicable to all forms of housing whether rented or owner-occupied or single and multiple occupation. The foreword in the guidance by the minister lends it status of an official document.

The guidance was jointly prepared by the Local Authority Coordinators of Regulatory Services, the Chartered Institute of Environmental Health (CIEH) and Chief Fire Officers’ Association with active support of Local Government and the Communities. The NLA was part of the steering group which directed creation of the guidance.

Thinking of renting out your property? Make sure it is energy efficient

According to a recent study by the Energy Partnership for Homes (EEPH) on current attitudes to energy efficiency; around 9 out of 10 (close to 85%) of private tenants are anxious over the increase in costs of domestic energy, while around 42% seemed to be really concerned about the problems of rising energy costs.

As is evident from the survey, nearly 9% of all the respondents have already ,moved or decided to move to a property that is more energy efficient than their current property. When asked about the usefulness of Energy Performance certificates (EPC), almost 88% of the respondents said that they would look for an EPC while renting a property. Almost 32% of the respondents said that EPC is very useful while renting a property.

Almost one fourth of the respondents said that they would use EPC to shortlist the properties for rent. A striking 90% of the respondents claimed that an EPC would really impact their choice of property. Around 40% of the people surveyed said that they would use the EPC to decide between two properties having similar attributes.

According to the study, the energy performance and efficiency of a property is becoming an extremely important factor in choosing a property along with attributes such as the location, types of property and the rent. More and more landlords are realising this fact and trying to make their properties more energy efficient.