RLA Urges Initiatives to Help Private Landlords

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Yesterday the Residential Landlords’ Association ran a blog which contained some of the most insightful comments I have read in a long time.

The RLA has basically written an open blog to the Government urging them, for the good of the country, to give private landlords a break.  Their reasoning is sound.

Given the financial crisis, people are going to be turning to the private rented sector in their droves. Therefore, not only is the PRS going to be providing vital accommodation but it will also be in a position to stimulate increased economic activity. The PRS is, in fact, going to play a major part in hauling the UK out of the mire.

The point the RLA is making is that the Government should be doing more in the way of initiatives to help this critical sector.  Given the situation with loans and other recent law changes, it would often appear that the exact opposite is happening. The RLA are making some recommendations regarding taxation and other breaks that seem like common sense.

Their thoughts are very comprehensive on a number of issues so what I plan to do over the next couple of blogs is summarise them and add my two pence worth.  I think it is important that we all understand what the RLA is suggesting and get behind their campaign to have the government listen to what the PRS has to say.

Let’s Follow EU Guidelines on VAT!

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In the UK many of us do not always see eye to eye with some of the recommendations of the EU. But when it comes to their recently agreed maximum 5% tax rate for renovation and repair work, landlords are right behind them.

The UK Government needs to implement this as soon as possible. This is a unique opportunity to encourage landlords to get properties up to spec. Given that a lot of the PRS (private rental sector) deals in older properties could do with a little work, this has to be viewed as a very good thing.

Of course, it is not to be ignored that a drop in tax, which will lead to an increase in renovations, will also stimulate the economy by providing work. Tradesmen have had a hard time of it lately with many people shelving any plans that they had for home improvement when the crisis hit. This would get a lot of these businesses back on track. Not to mention the huge boost that will be given to the manufactures of all kinds of building supplies.

The Government needs to stop dragging its feet on falling in line with the EU requirements. There is much to be gained and very little to lose. I am sure they can find a way to recoup any monies lost through the drop in tax.

They usually do!

RLA Urges Initiatives to Help Private Landlords

Posted on by

Yesterday the Residential Landlords’ Association ran a blog which contained some of the most insightful comments I have read in a long time.

The RLA has basically written an open blog to the Government urging them, for the good of the country, to give private landlords a break.  Their reasoning is very sound as, given the financial crisis, people are going to be turning to the private rented sector in their droves. Therefore, not only is the PRS going to be providing vital accommodation but it will also be in a position to stimulate increased economic activity. The PRS is, in fact, going to play a major part in hauling the UK out of the mire.

The point the RLA is making is that the Government should be doing more in the way of initiatives to help this critical sector.  Given the situation with loans and other recent law changes it would often appear that the exact opposite is happening.

The RLA are making some recommendations regarding taxation and other breaks that seem like common sense. Their thoughts are very comprehensive on a number of issues so what I plan to do over the next couple of blogs is summarise them and add my two pence worth.  I think it is important that we all understand what the RLA is suggesting and get behind their campaign to have the Government listen to what the PRS has to say.

New Year Brings Reduced Property Auctions

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The first few days of the New Year have seen mixed news for homeowners and landlords across the UK. The number of repossessed homes sold through auction has dropped markedly over the whole country. This is despite the fact that figures show repossessions are still taking place in record numbers.

The auction figure has shrunk by fifty percent over the previous twelve months. However, this decrease is not yet reflected in the repossession rate.

Auction specialists have suggested that in some cases this may be because people are opting to sell the properties in a more discreet manner i.e. through estate agents. It seems that some government owned or sponsored banks (and which ones are not these days?) realised that the repossession and selling of family homes was a sensitive issue politically and decided to be more low key about it. Very sensitive of them.

It is true, though, that Banks appear to possess fewer residential properties right now than they have at any time in the preceding twelve months.

Even so, it has been noted that repossession rates do not seem to gel with the recently released property auction figures. Repossessions are shown to be still rising with just the auctioning of them down.

Let’s hope that the rise in repossessions is reversed soon.

Homeowners Consider Renting

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A very interesting report released this week by a public opinion research firm, Unbiased.co.uk, indicates that an increasing number of British home owners are considering selling their own properties and moving into rented accommodation.

It seems that the trauma of the real estate crash we have just experienced has a lot of people reconsidering their housing options. Nearly two million home owners indicated that they would contemplate selling their house and renting in the near future; of these a third said it was something they would not even have thought about two years ago.

The reason given by most people who say they would consider this route is that it would be worth it for the peace of mind. It would appear that people got a thorough scare during the recent property crash and many have decided that it is just not worth the worry.

Another factor mentioned is also linked to the recession. People are saying that with the job market the way it is, renting would give them the mobility to go where the work is if they needed to.

People are clearly still quite shaken by recent events and who can blame them. It will be interesting to see whether many carry through with what would be a fairly radical move and give up their property to move into rented accommodation. Somehow I just cannot see it happening.

Bankruptcy Threat for Hundreds!

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The decision in a recent test case in Bristol High Court threatens to drag hundreds of buy to let investors into bankruptcy.

The action was brought about by Prestige Homes South West. In short, they were suing an investor who agreed to put money into the development of a set of trendy apartment blocks. The difficulty is that it was at a time just before the price of such homes plummeted by 40%. This caused many investors to lose their funding as banks pulled the plug on their finance.

In this test case the ruling was for £133, 282 in favor of Prestige Homes. This leaves many people around the country very worried as they contemplate the fact they are in a similar position.

In the case of Prestige Homes, many of the investors (some first time home owners) have reached an agreement with the company out of court. But of the original figure of thirty investors, a further eight are so far opting to take their chances in court.

This is a sad situation for everyone. Whilst you can clearly see the point of the developing company these investors, through no fault of their own, have already lost their hefty deposits and stand to lose much more.

Property Management Software Is An Essential Management Tool.

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There is no doubt that these are challenging economic times for the professional landlord.  Property prices have fallen and economic recovery is proving to be a very slow process.  Effectively managing cash flow and being in control of every aspect of your property business is perhaps more important now to business survival than it has ever been.  One thing that you can be certain of, however, is that your competitor will be using property management software to manage and control its property portfolio. 

A good quality property software package supports MS and Excel formats.  This means that you can continue to work with programs that you and your staff have experience of and are comfortable with.  It really does pay to keep things simple and familiar where you can.

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Private Sector Interest Still Strong

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As usual it is fair to say that we are getting very mixed messages about the actual state of the residential property market in the UK, and the future is hard to predict. The one thing that does appear to be coming through quite strongly, however, is that landlords can look forward to a rise in interest in their rental properties.

According to the RLA website this week 65% of Britons, who are in the market for rental accommodation, remain determined to find it before the end of 2009. If this is the case then the holiday season will not be a picnic for landlords as they gear up to meet the demand.

As most experienced landlords know January and February are traditionally quite slow months in the rental sector, probably because most people put in a huge effort to be settled in a new home in time for Christmas. This means that there are fewer on the search in the early months of the New Year.

Adding to that tradition is the fact that many are anticipating a rise in rental prices in 2010 as the balance of supply and demand for properties shifts.

So, landlords! Prepare for a very busy Christmas but not to worry there will be time to rest in January.

London Property Bringing in the Money

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With a lot of people agreeing that the worst of the recession and the credit crunch is now behind us, it is very heartening to see the London property market showing distinct signs of an economic recovery.

The growing confidence in the London market is an indicator that vendors realise that sales are now more profitable and, nearly as importantly, properties are turning over much more efficiently.

Leading London estate agents are delighted with the fact that the number of buyers registering with them has risen by 70% from this time last year. To make things look even rosier there has also been an 80% increase in agreed sales over the same period.

On the buy to let front, the London market has contracted with available stock decreasing by 13% as accidental landlords decide to sell and get out of rental all together. This combined with the fact that the demand for rental properties has actually increased by around 20%, has eased the plight of a lot of landlords who had been faced with vacant property problems.

A knock on effect of all this is that landlords are able to demand a fair price for their rental properties again after having suffered a fairly substantial drop in the preceding year or so. All in all London property is again looking like a good investment.

Landlord’s Support Review of Water Debt

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As most landlords are no doubt aware, disconnection of water for non-payment has not been an option in this country for over a decade now. While most of us understand why that is the case, there is no doubt that this law has led to a massive rise in bad water debts. The figures are in the region of a rise from £684 million to a whopping £1.2 billion.

No wonder then that The Residential Landlords Association is backing the Walker Review’s proposal for sanctions against non-payers. They are also vocal in their support of changing the rules so that water users are obliged to give their personal details when applying to be supplied.

“The statistics show the ridiculous state we have reached,” says Richard Jones – lawyer for the Residential Landlords Association

The RLA are, however, quite concerned as to how the new sanctions will be implemented. Though delighted that the Walker Review listened to the many recommendations of the RLA and most significantly agreed that landlords should not be held responsible for water charges in shared houses, they are concerned that the Government is taking the wrong tact with the sanctions.

The Walker Review indicated that non-paying tenants could be pursued and ultimately jailed for failure to pay for their water. This has met with disapproval from the RLA.

“At the moment our prisons are overflowing so it does not seem a good idea to add to the prison population when there is a far better alternative. It is possible to install trickle valves to reduce the water supply to a property while still allowing a sufficient supply for hygiene purposes.” Mr Jones said.

It will be interesting to see how this progresses.