Commentary RF

What are the penalties for landlords who break the law?

There are a lot of laws that are in place to make sure that landlords are doing right thing. The good news is that the vast majority of landlords are good ones and we don’t need to worry about them doing the wrong thing. They have always been able to establish a penalty when a landlord would break a law. Some of the laws that can be broken is letting to someone that is not legally allowed to be in the UK, and other safety and health violations.

Key Takeaways:

Among other things, landlords are now legally obliged to maintain rented properties to a good standard, remove potential hazards and install fire safety measures.
Good landlords – and that’s the vast majority – have taken on board all the legislation and absorbed the ever-increasing cost of letting a property.
From April 2018, any conviction for an offence under the Housing and Planning Act 2016 will result in your details being put on a ‘rogues’ database shared by local and central government.

“But there are still some who don’t know the rules and struggle to keep up with new ones while others continue to flout the law.”

More than half of UK landlords are optimistic about outlook for buy to let – PropertyWire

A new survey reveals that 52% of UK landlords feel positive about the market, versus 16% feeling negative (the rest are in between). Conducted by the agency Your Move, the survey also found that landlords consider ongoing maintenance and potential long-term profits as their biggest considerations. Brexit was shown to be a low level concern. Overall, most landlords are thinking about the long term, as 64% said they aren’t likely to sell a property within the next year. Martyn Alderton of Your Move says that some trepidation is understandable.

Key Takeaways:

Most of the UK landlords are feeling positive about the industry of buy and let.
The most important things to landlords are the maintenance and upkeep costs.
Research has shown that landlords are in it for the long haul and that is good for the industry all around.

“The survey also reveals that the two most important considerations to landlords are ongoing maintenance and upkeep costs, cited by 83%, while 80% mentioned the potential to make a long term profit.”

Case Study: HMO in four weeks with Clair McArdle

Clair Mcardle turns a refurbished three story home and was able to convert it into a comfortable HMO in four weeks. This story is great motivation for anyone who thinks an HMO has to be a huge project with an endless time investment. For this home she kept the walls their original cream color as it would cost a pretty dime to have them repainted. She uses Pinterest for inspiration for the scandi-inspired design. She also said her budget mostly went to replacing the water systems.

Key Takeaways:

HMO’s don’t have to be a massive undertaking, you can do it in just four weeks.
The first home Claire bought, checked off all her boxes for what she wanted for an HMO.
She revamped the interior because that was the only downside to the home.

“The property is now giving Clair a return on investment of 27.5%, after allowing for a 10% maintenance allowance.”

Government issues new HMO and licensing guidelines

The Ministry of Housing, Communities and Local Government published new guidelines for landlords related to HMOs and selective licensing. The guidelines introduce required minimum bedroom sizes for HMOs. Also, licensing is now required for properties rented to five or more people from two or more different households. Housing Minister Heather Wheeler defended the regulations by saying that all people deserve a safe and decent place to live. The National Landlords’ Association, however, found fault with the guidelines. One concern is the cost of the license fees will be passed on to tenants.

Key Takeaways:

In an attempt to improve living conditions, the guidelines introduce minimum bedroom sizes.
The government estimates that approximately 160,000 houses will be brought into the licensable HMO catchment.
The National Landlords’ Association dislikes the blanket approach to selective licensing schemes and the license fees.

“The three story rule no longer applies, so HMOs meeting the above criteria will be licensable for one, two, three or more stories.”

AirBnB market – Don’t let the bed bugs bite!

Whether you are renting an Airbnb or staying in a hotel, it’s important to be aware of the possibility of bed bugs. While you can spot bed bugs simply by looking, they do try to hide as much as possible. Sometimes black marks and droppings around the edge of the mattress are visible to the naked eye, alerting you to a problem. Rather than try to address a bed bug problem yourself, contact an exterminator with experience in bed bug removal.

Key Takeaways:

More people are making their homes available for rent, increasing the need to take steps to prevent bed bugs.
Bed bugs can be seen to the naked eye, but are also almost impossible to see as the hide in the folds of blankets.
There are several signs of bed bugs like black spots on the bedding, and droppings around the mattress.

“the writer believes that this rhyme may prompt consideration of the health aspects a property owner should be aware of.”

The busy world of HM Land Registry

Just a couple of decades ago, it was quite obvious what work was being done to anyone walking into the Land Registry. There were stacks of documentation, thousands of property plans with distinct scent of old paper. Today, the picture is quite different today, as the whole office is dominated by computer technology and most of the work is done electronically. Despite all these changes, the work is still very visual and the real picture of England and Wales is still contained and preserved in these files.

Key Takeaways:

Our modern work place has you picturing people of all kinds sitting behind computers.
Everywhere we go was built by someone else, even as far as farmland is concerned.
The people who build those things give confidence to those who use them and own them.

“If you went back a few years, you would have had a much more immediate sense of our purpose at HM Land Registry.”

Debt Financing – The Cost of Using a Bridging Loan

Bridging loans typically have rates around 1% per month, but this varies depending on a number of factors. When financing a property, the net advance will be around 60% with loan-to-value of 70%. So the loan is 70%, but the borrower receives 60%. There is also a lender arrangement fee of 2% or so, and probably a broker fee as well. For property, it will be necessary to pay an evaluation fee, but there shouldn’t be any exit fees.

Key Takeaways:

The net advance of a bridge loan is normally around 60%, depending on the term.
There will be a lender arrangement fee of around 2% and probably a broker fee.
There will be a fee to have the property valued, but there shouldn’t be an exit fee.

“Typical rates for Bridging Loans are typically around 1% but as with any kind of debt financing, the details will depend on a number of factors.”

Breaking down the “financial freedom” dream

Life does seem like a rat race these days and many people dream about breaking out of it. Financial freedom is a dream that many of us think about. The reason a lot of people fail in pursuit of this ideal is their lack of understanding of what it actually means. Without breaking down your earnings, spending and then defining where you want to be financially, you can never come up with a plan that will get you there. When you take a detailed look at your earnings and expenses on a reoccurring basis, it is easier to determine what is worth for you and what is it that you want to change. This way, you break down your plan into manageable, smaller chunks, and your dream starts turning into reality.

Key Takeaways:

For most financial freedom is a dream not because it’s impossible, but because they don’t know what it means.
Make sure you know what your take home pay is when you factor in taxes and things like that.
Focusing on what you are actually making and what your bills are and trimming them down will give you freedom.

“The only way to achieve something is to get very clear on what you want, work out what you need to do to get it, then break it down into manageable chunks.”

Where Should You Invest in the Manchester Property Market?

There has been a rise in the value of the real estate market value in the city of Manchester. London used to be the hot spot for investments, but investors are beginning to notice that you won’t get a very good return on investment if you purchase property in London any longer. Manchester looks to be the new hot spot and according to some sources, they are saying that Manchester will be the perfect place for property for the next ten years at least. So, if you are looking to invest, this is the place to do, and it’s best to do it now.

Key Takeaways:

Now is the time to invest in the UK real estate hotspot Manchester.
Manchester is a bustling city with strong rentals and reasonably priced properties.
Manchester intends to be a critical player in the Government’s Northern Powerhouse plan.

“Right now, this is definitely a property hotspot in the UK and this trend only looks set to continue in the years to come.”

5 Common Off-Plan Investment Mistakes

With property investment, there is a laundry load of a list of the things that you should be doing, but this doesn’t mean that each investor is going to follow all of that advice. There are some common mistakes investors make and they’re pretty simple and also very common. One of the most popular mistakes that people make is simply not planning enough. It is also possible to get in over your head very simply because you didn’t take enough time to research and functioned based on emotions instead of logic.

Key Takeaways:

There are some pretty common property investment mistakes that can and should be avoided.
Put ample planning into your investment prior to committing, so that you know your timelines and goals.
Make smart investment choices and keep your emotions about a deal in check.

“When it comes to property investment advice, particularly off-plan property investment, there’s no shortage of information how it should be done.”