Sue’s Rental Compliance Blog – January 2016 – Deregulation Dangers!

Sue Clear is Compliance Executive at www.lmemove.com

Sue Clear is Compliance Executive at http://www.lmemove.com

Landlords – do you know how to avoid falling foul of the Deregulation Act?

Happy New Year and welcome back to what I sense promises to be another full on year for the Lettings and wider property sector.

This month I thought I’d highlight several of the problems landlord’s can run into that are linked to the recently passed Deregulation Act, and how to best protect yourself from potential trouble ahead.

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Andy’s Auction Blog 18th January 2016 – Now’s the time to swerve the Stamp Duty hike

andys-blog (2)

Usually our first week of the New Year is a bit of a slow burner, with people taking their time to get back in the swing of things and start thinking about property again. From the moment we reopened on the 4th January, we have been inundated with frantic property buyers desperately trying to find their next purchase(s). We are receiving offers on houses within MINUTES of them going live on our website and our valuers can’t book them into the auction quickly enough.

So why the rush?

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Carrie’s Spanish property blog – British buyers on the rise – December 2015

View More: http://enroute.pass.us/lucasfoxFeeling positive

We’re ending 2015 on an upbeat note with the news that sales of Spanish homes to both overseas and local buyers have risen significantly compared to 2014. Latest figures from both Lucas Fox’s in-house data and Colegio de Registradores www.registradores.org show a substantial increase in the number of transactions to Spanish and foreign investors, particularly by the British.

The Spanish economy is also at its healthiest for several years, growing at 3.4% from July to September 2014, the fastest annual rate since 2008.

British buyers on the rise

Our sales data – which primarily focuses on high end properties – indicate that the number of transactions by British buyers increased by a massive 26% across all our regions over the last 12 months, with Barcelona, Ibiza and the Costa Brava the areas most in demand.

Figures also show that the average purchase price by British buyers went down from 998,000 Euros in November 2014 to 847,000 Euros in November 2015 – a period when property prices were stabilizing.

New properties and high quality refurbished homes seem to be currently in most demand, with new developments in prime areas selling off-plan very fast and, in most cases, close to asking price.Lucas Fox Demand by nationality

Local demand also on the rise

Significantly, local demand is also on the rise. Sales at Lucas Fox to national buyers went up by 50% from November 2014 to November 2015. Our latest market reports http://www.lucasfox.com/updfiles/publications/market-reports-q1-q2-2015.pdf  also show that prices in Spain’s three key cities – Madrid, Barcelona and Valencia – are now slowly beginning to increase.

In all of these locations the improving market conditions are being driven by increasing levels of confidence amongst national buyers, something that is crucial for the market’s long term recovery. In almost all our markets, this renewed confidence, a strong economy and the Spanish banks’ willingness to offer competitive mortgages has brought new investors into the market and we are now seeing international buyers competing against local buyers to secure the best properties in the most desirable locations

Spanish mortgage rates close to zero

Recent Q3 data from the Spanish Property Registrars also indicate a rise in sales by national buyers – up by 16% to more than 80 thousand compared to the same period last year. It also showed that foreign sales were up by 20% to 12,535 during this 3-month period. Significantly, sales of homes to UK buyers more than doubled – up by 53% in the third quarter of 2015 over the same period in 2014, thanks to a unique combination of factors:

Lucas Fox Euribor evolutionThe last time the pound was above at 1.4  euros was in 2007 and it has been consistently so during 2015. According to Euribor, mortgage interest rates in Spain fell close to zero in November, representing yet another historic low. Euribor (the rate used to calculate most mortgage repayments in across Spain) fell month-on-month by 38% in November to 0.079 and by 76% year-on-year. Like house prices, mortgage rates have declined over the years and are now hovering far below their 2008 peak of 5.393%.

Our partners at Mortgage Direct mortgagedirectsl.com think that we are in for a prolonged period of low rates in the Eurozone. The economic climate is still very poor in many of the countries that make up the zone. They believe we may see small increments in the rate, once rates increase in other countries, such as the UK and the USA, but the circumstances are very different in the Eurozone and even in the UK and USA they are talking about prolonged periods of low rates.

Property registrars also showed that prices across Spain increased by 6.6% year on year in the third quarter of 2015 and 2.2% quarter on quarter, but compared to prices in other major European property investment hotspots, Spain continues to remain an extremely attractive option.

Roll on 2016!

Carrie Frais is Head of Marketing & PR at Lucas Fox 

Do you have a question for Carrie? E-mail her here

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Sue’s Compliance Blog December 2015 – £3000 fine? Ready for Right To Rent?

Avoid a £3000 fine.

Are you ready for Right To Rent?

Sue Clear

It’s been a busy time for landlords of late – new laws, regulations, tax changes coming out of the woodwork left, right and centre. It’s no wonder many smaller landlords wonder whether the Government has the knives out for them! That said, change happens and like all new things most of the fear comes from the unknown.

Once you know exactly what is involved you can set about getting on with business.

This month I’m focusing on the looming Right To Rent checks that from the 1st February 2016 ALL landlords (or letting agents acting on their behalf) are required to make on ALL tenants commencing a new rental contract.

So what is Right To Rent and what do you need to know / do?

About Right To RentGov. Logo

The view of many landlords is that Right To Rent is effectively the Government’s way of discharging some of its duties to check the legal immigration status of people within the UK. It is illegal to rent property to any person(s) who is/are not legally entitled to remain within the UK.

As of 1st February 2016, Right To Rent makes it a legal requirement that landlords or their agents must carry out a range of checks that a tenant or lodger can legally rent a residential property within the UK. Landlords who fail to do so (or ensure their letting agent has done so) can be fined up to £3000 if they rent their property to someone who isn’t allowed to stay in the UK.

A useful checking tool to walk you through the steps can be found here.

When?

So when must you carry out Right To Rent checks? The guidance states that these must take place within 28 days before the start of a new tenancy. Landlords must make checks for:

  • all adult tenants (aged 18 and over)
  • all types of tenancy agreements, written or oral

That said, tenants in some types of accommodation (such as social housing and care homes) won’t need to be checked. You can find the full guidance here

All landlords in England will have to make checks from 1 February 2016.

How do you make checks?

To remain within the law and avoid a potential £3000 fine landlords or letting agents acting on their behalf must:

  1. Check which adults will live at the rental property as their only or main home.
  2. See the original documents that allow the tenant to live in the UK.
  3. Check that the documents are genuine and belong to the tenant, with the tenant present.
  4. Make and keep copies of the documents and record the date you made the check.

Landlords can be fined up to £3,000 for renting a property to someone who isn’t allowed to stay in the UK.

With regards to checking the original documents, with the tenant(s) present. The Government has issued guidance stating that it will be acceptable to check via Skype or some other type of video link if a tenant is not able to attend a face to face meeting with the landlord or agents.

The full landlord’s guide to checking and list of all documents that are acceptable to comply with the Right To Rent checks can be found here.

How do you check that the property is used as the tenant’s only or main home?

Under the guidance, a property will usually be classed as a tenant’s only or main home if:

Check their original documents

The law is clear that landlords or their agents need to check that:

  • the documents are originals and belong to the tenant
  • the dates for the tenants’ right to stay in the UK haven’t expired
  • the photos on the documents look like the tenant
  • the dates of birth are the same in all documents (and are believable)
  • the documents aren’t too damaged or don’t look like they’ve been changed
  • if any names are different on documents, there are supporting documents to show why, eg marriage certificate or divorce decree

If the tenant is arranging their tenancy from overseas, landlords or their agents must see their original documents before they start living at the property.

You can read the full guidance on illegal immigrants and private rented accommodation here.

Make a copy of the documents

When landlords or agents copy the documents you must:

  • make a copy that can’t be changed, eg a photocopy
  • for passports, copy every page with the expiry date or applicant’s details (eg nationality, date of birth and photograph), including endorsements, eg a work visa or Certificate of Entitlement to the right of abode in the UK
  • copy both sides of biometric residence permits
  • make a complete copy of all other documents
  • record the date you made the copy

It’s vital that you keep copies of the tenant’s documents for the time they’re your tenants and for one year after. This allows you to evidence that you have discharged your duties fully under the new law.

Remember – make sure you follow data protection law to ensure that you are storing tenant’s data securely. Full guidance can be found here.

Additional checks

You must make a further check on a tenant if their permission to stay in the UK is time limited. Landlords or their agents can receive a fine (also known as a civil penalty) if they don’t do this.

You must make a further check either:

  • just before the expiry date of your tenant’s right to stay in the UK
  • within 12 months of your previous check

You won’t have to make a further check if your tenant doesn’t have any restrictions on their right to stay in the UK.

If your tenant doesn’t pass a further check

If you find that your tenant does not pass the original or subsequent checks then you must tell the Home Office. You might receive a civil penalty if you don’t if you find out that your tenant no longer has the right to rent or stay in the UK.

Landlords and agents can choose to evict tenants who do not have the right to remain in the UK if they want to. You must follow the rules for evicting tenants.

Where lodgers are concerned – you can choose to end your tenancy agreement with them. How much notice you give your lodger will depend on which type of tenancy they have with you.

Agents

The legal duty for carrying out Right To Rent checks rests with landlords. However, landlords can ask any agents that manage or let their property to carry out the check for them. If you are opting for this route then you should ensure that you have this agreement in writing. Letting agents are also advised to ensure that they have covered this understanding and agreement in writing to carry out the checks on a landlord’s behalf. Letting agents should carry out all of the steps above, including retaining copies of the documentation checked.

Sub-letting

This is a contentious issue. The Deregulation Act made it easier for tenants to sub-let a rental property. Technically, under Right To Rent if a tenant sub-lets the property without you knowing, then they are responsible for carrying out checks on any sub-tenants. Under this scenario they will then be liable for any civil penalties if they don’t carry out the checks correctly.

Phew…so as you can see, Right To Rent certainly adds a fair bit of extra administration work to the mix for landlords and agents. This is in addition to the new compliance laws introduced 1st October 2015 in England and Wales and 1st December 2015 in Scotland regarding the fitting of CO alarms – see my November blog post here. However as a responsible landlord or letting agent, with a little bit of careful forward planning now Right To Rent needn’t be a nightmare.

To help our clients further, LME Move is able to assist landlords and agents with the delivery of a Right To Rent administrative facility to ease the pain. Feel free to contact myself or one of our team if you’d like further information / advice.

Wishing you all a peaceful festive season and until 2016!

Sue

Sue Clear is Property Compliance Executive at LME Move.

Got a question for Sue or need further Right To Rent advice?

Get in touch with Sue and her colleagues here

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Andy’s Auction Blog – 7th December 2015

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Getting your skates on if you’ve been planning to buy at Auction

As the countdown to Christmas begins, and 2016 comes hurtling towards us, I, for one, can’t help but look back on this year and reflect on the great plans I had….but never quite got round to!

Like the gym I was going to join….

We all start a new year full of good intentions, motivated and with fire in our bellies about the goals we’ve got. If buying an investment property in 2015 was top of your list, chances are you attended your first auction to get a feel for how it all works. Perhaps you attended your first investment property seminar or bought and read the self-help book? So far, so good. Then, all of a sudden, its summer holidays, the kids are back to school, and it’s almost Christmas again. Where did the year go?

If you’re one of those people whose plan was to invest in a buy-to-let or investment property, but didn’t actually take the plunge, then now, more than ever, is the time to act. Walk the talk, pull your socks up, or better still, get your skates on now and buy before the newly announced Stamp Duty changes* hit hard in April 2016. If you buy at our next auction on 8th December, or, at a pinch our auction on 3rd February 2016, you could still complete on your purchase in time to avoid the proposed 3% surcharge on buy-to-let and second home purchases.

Think of it like this – the money you save by purchasing before the April 2016 deadline could cover the cost of a new kitchen or bathroom for your new property!

And don’t worry if it all sounds too quick to organise – that’s where I come in. I can guide you through the whole process, including arranging the finance, and make all the necessary arrangements for you to buy at auction. And, all being well, beat the Stamp Duty deadline.

Ten minutes before writing this blog, a client of mine, Mr Kamran, exchanged contracts on a property pre-auction. His week, running up to today, went like this:

DAY 1 First meeting with myself and our finance specialist, Rachel Carlin
DAY 2 Mortgage Approval in Principle received from Lender
DAY 3 Mortgage Valuation instructed
DAY 4 Mortgage Valuation conducted
DAY 5 Valuation Report received
DAY 6 Full Mortgage offer received and contracts exchanged

And Mr Kamran is not a seasoned property dealer – in fact, this is the first house he has ever bought. After reading my last blog, he gave me a call for a chat about buying at auction and, with his decisive approach and my help, backed up by the Edward Mellor network, Mr Kamran has bought himself a great property – in the space of a week – and he couldn’t be happier about it!

Here’s what he has to say about the experience:

“Having missed out on a couple of properties with local estate agents, I decided to look into auctions. After reading Andy’s blog that mentioned the success of a recent First Time Buyer at auction, I arranged to meet him to see if he could help me too.

Andy was great and talked me through the whole buying process and even though I was eager to buy the property as soon as possible, he made sure that I had everything in order first and didn’t take unnecessary risks. He also put me in touch with Rachel who is the Financial Advisor working with Edward Mellor Auctions. She arranged my mortgage really quickly, knowing that I was in a rush.

Having someone with Andy’s knowledge on hand everyday makes a huge difference and the whole process from meeting him to exchanging contracts (including getting a full mortgage offer) took less than a week. I can’t wait to get the keys now!

I would wholeheartedly recommend Andy and the team at Edward Mellor if you’re looking to buy property from auction.”

So, “get your skates on” and end the year on a high by buying at Auction on 8th December, or “get your ducks in a row” (see my last blog) for our next one on 3rd February and start 2016 with a bang (of the gavel!).

Andy Thompson is Auction Consultant at Edward Mellor 

0161 443 4740 / 07530 704234

Do you have a question for Andy? Why not e-mail him here.

 

Ben’s home staging blog – December 2015

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Empty properties lack soul…and salesBen Bambrough

This month I focus on the increasing popularity of home staging and more specifically how it can benefit developers, agents and investors.

There is not one property in the world that would not benefit from home staging. It is only now a realisation because this fact has been proven, simply by the reflection of the sales and marketing information we have coupled with the increasing popularity in home staging.

What do your empty properties say to buyers?

Empty properties not only lack soul, but they cannot define the space that a lived in property clearly illustrates. In the course of my work my number one objective is to visually sell the lifestyle that property can offer to a potential buyer.

Be it a sprawling penthouse apartment with the ultimate wow factor party room, the classic, warm family townhouse or the conveniently located two bed pied-de-terre, my job doesn’t change, it is to enhance and sell what a property is physically offering and we cross all boundaries. Essentially, a buyer is walking into their potential home and we help them to envisage themselves their lifestyle by creating that dream home. When they walk into a staged home, they see the way the property can work for them. An empty property is cold to view and more importantly, it resonates with echo sounds that don’t help your average buyer with visualising the home that they aspire to live in.

Seduction sells

A person’s home is pretty much their largest asset and purchase, so it’s vitally important to give the property every bit of opportunity to seduce the buyer into making the massive decision to pay for it. People are becoming more and more informed to the agents’ illustrations. With today’s online exposure to pictures and floor plans etc, it is even more important to present good visual images of what you are selling.

Twenty years ago, people walked into an estate agent and asked to go on a huge amount of viewings because the buyer couldn’t see much of what was available. Today, buyers do a lot of the legwork and preliminary research online before telling agents the properties they want to see. Viewings are critical, the potential buyer has already discounted a large amount of properties via a process of elimination online. If your property looks cold and empty online then you will already be doing your property a dis-service in its potential.

Variation for different markets

London encapsulates a diverse spectrum of property owners, which then has direct consequences on the wide ranges of architecture and styles from your very super-cool Notting Hill to the luxury tastes of those in the classic properties in the Bayswater areas. There is of course more space to work with in a penthouse suite compared to a smaller apartment, which targets two very different demographics. With this in mind, it’s better to have a few marketing suites that show the different finishes and options available to appeal to different markets with varying price points.

It’s therefore best to concurrently furnish a one or two bedroom apartment and a penthouse suite. We have just completed an apartment building with twelve flats where we initially furnished one marketing suite. It sold along with three or four others and as the people who had bought the marketing suite wanted to move in, we furnished the new marketing suite. The remaining sold leaving one apartment on the market and we moved out. Consequently, weeks passed and it remained on the market so we have just been called back in to stage the apartment. Had we originally furnished it, it would have almost certainly sold.

The choice of styles very much depends on the architecture of a building. Other developers who are selling a lot of space on plan will have a variation on schemes, it’s like selling the extras on a car and they can sell up with a choice of kitchen finishes, flooring and bathroom suites. With this in mind, it’s better to have two marketing suites that show the different finishes and options available.

Ben Bambrough is MD at London’s leading home stagers and property experts, bB Design House  

0845 680 1033

Do you have a question for Ben? Why not e-mail him here.

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Adam’s Sales & Rental Blog – December 2015

Negotiating Skills

leaders

Autumn Statement Thoughts

A healthy private rental sector is absolutely essential to the housing market, for those who either cannot or do not wish to buy. The plan in the Autumn statement to increase stamp duty by 3 per cent on the purchase of buy-to-let properties announced is disappointing, given the importance of privately rented property to this county’s housing needs, however I do not foresee it having a substantial impact.

Existing Landlords

Existing landlords will be unaffected and new investment will be considered alongside the returns available elsewhere.  With pension contributions heavily restricted, many will continue to invest in property. The lettings market will continue to see strong demand and if supply is further constrained, rents will rise, yields will increase, and investors will view 3 per cent extra stamp duty as insignificant.

Opportunities Abound For Investor’s Who Act Quickly

Since the stamp duty levy will not take effect until 1st April, it is likely we will see a rush of investors buying before then. Anyone who has been considering buying or selling an investment property must see this change as an opportunity to act quickly to complete their transaction before 1st April. Sales of leasehold properties can take an average of 12 to 16 weeks to complete from offer so it is possible, if the process begins now, to complete a transaction in time to save thousands of pounds.

Location, Location, Location

Buying the right property in the right location will be crucial to success, as will correctly calculating rental yields, tax liability and profitability. It is now more important than ever to consult a knowledgeable expert to make the right decisions at every stage.  It is imperative to give landlords expert guidance to help them meet the challenges they face and get the most from their investment property or portfolio, now and in the long-term.

If you are unsure of your options or require further information / guidance I will be delighted to assist.

Feel free to contact Adam Kingswood on 0115 926 4500 or adamkingswood@leaders.co.uk

You can also follow Adam on Twitter: @AdamKingswood

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Sue’s lettings compliance blog November 2015 – carbon monoxide alarms

Sue ClearIf you’re a professional landlord or letting agent – and assuming that you haven’t been on the Moon for the last year – then you can’t have failed to have been bombarded with a plethora of rental property compliance updates and changes. The most recent being the legal requirement to fit carbon monoxide alarms. So what do and don’t you have to do to ensure you stay the right side of the law?

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