Landlords are obligated by law to put tenants deposits into a protection scheme if their property is let out under an assured short hold tenancy agreement after April 2007. The deposit rules and regulations can be very confusing so here are the best schemes for each landlord in England and Wales? With that in mind we have outlined some details on deposits and the different schemes.
What is a Tenancy Deposit?
Landlords are entitled to request a deposit to cover unforeseen cost such as damages to the property or unpaid rent. Landlords don’t have to take a deposit but it is very much advised. As landlords aren’t obligated to take a deposit there is no set amount that you have to take as a deposit. It is typical to take the equivalent to one months rent. However it’s also not uncommon to ask for as much as 6 weeks rent.
More about the Tenancy Deposit Scheme
It’s important to note that it is solely a landlord’s responsibility to make sure that you have a tenancy deposit in place and even if you do have a letting agent. There are two different type of schemes an insurance based scheme and a custodial scheme.
Where a scheme is insurance-based, tenants pay their deposit to the landlord, who retains the money but pays a premium to their insurer. This is where a tenant pays their deposit to the landlord who retains the money and then pays a premium to their landlord insurer.
Custodial schemes are favoured by the majority of landlords this is where the tenant pays their deposit to the landlord or his agent, who then pays it directly into the scheme. Custodial schemes are more popular with the majority of landlords. The tenant pays their deposit again to the landlord and the landlord then places it into a scheme. There are a number of paid schemes however here is a link to a government back free scheme.
As the tax reliefs for buy to let investors draws to an end the question on every Liverpool landlord or potential Liverpool landlords mind is whether or not buy to let properties are still a good investment?
PricewaterhouseCoopers could have the answer. As a report realised last month by PWC found even though the government has made decisions to reduce mortgage interest relief tax for landlords the letting market is still as appealing as ever. In fact PwC forecasts that ¼ of all houses in the UK will be tenanted within the next 5 years.
The report said that lenders have an incredible stake in the buy to let market and that it is very important to them. However this being said due to the relief reforms a handful of lenders are now offering company buy-to-let finance products, which offers a new tax-efficient alternative to property investment.
Tenant demand remains incredibly high and is expected to rise further over the next few years. This means that investors can buy properties with the safe knowledge that there will be a readily supply of tenants.
The tax relief reforms aren’t due to take effects until 2017 which gives buy to let investors ample time to clarify their position. If you have a property that you need a tenant for quickly please give Propeller Lettings Agents Liverpool a call.
If the already complicated deposit requirements wasn’t enough the government has now made it mandatory for all private landlords and Liverpool letting agents to give their tenants an up to date gas safety cert, an energy performance cert and a government produced ‘how to rent’ booklet before any landlord can serve the tenants their section 21 notice. These new regulations are, at the moment, only applicable to tenancies granted after the 1st of October but in the next 3 year will come into play for all assured short hold tenancies. In order to serve the section 21 notice (S21) the letting agent or landlord must use a mandatory S21 form. Serving the notice has also been further complicated as landlords now have new time limits for commencing possession proceedings after serving the S21.
We can see there being several issues with the new regulations especially when it comes to evictions that are made around the same time that tenants have made property condition complaints. The new complexities to the regulations means that S21 cannot be served as a result of complaints or around the same time as complaints.
If you are interested in way to keep complications from happening when serving an S21 notice please do call a member of our team who can guide you through the process. However in regard to the conditions complaints changes the best idea is to always keep on top of letting maintenance. As a letting agent in Liverpool and the Wirral with over 20 years experience letting properties I can tell you that this isn’t as simple as it may sound. For more information on our fixed fee letting agent services please click here: Letting Agent Services Liverpool
Property Investing can be a complicated game. Make one bad move and you could see yourself losing your life-savings. However, you should not allow this to scare you away from Property Investing follow the simple tips set out by Wirral letting agents, Propeller Lettings, who have been investing in property for over 10 years and we are confident you’ll be successful.
After you decide to start your Property Investing career, establish an LTD or LLC. This creates a ringfence of protection for both yourself and your investments. Also, this will make you eligible for tax breaks when you perform business activities, such as expensing trips to and from the property.
You must cultivate a good feel for local property values. Mortgages and rent figures are great for providing insight into home values. It’s much easier to make a confident decision if you look at things from the street level.
Find people with a similar mindset and learn from them. More and more people are entering or re-entering the property market. There are so many people entering the property market it has lead to a lot of local based online forums where other investors congregate. Join them to learn more.
When making a financial plan, you need to make certain you have thought of all of the related expenses. These costs include closing costs, legal fees, staging costs, letting costs, maintenance, and much more. As you go through margins as simple as it sounds make sure you consider every potential cost and build an extra margin for any unforeseen costs.
Do not assume that the property value will increase. This assumption can end up costing you a lot of money. Invest in properties that are almost certain to rise in value. Examples of locations on the Wirral that are due to rise in value include Bebington and Wallasey both of which were recently voted into the top 10 places to live in England. If you are buying a property to let it out use a local property letting agent (Wirral Letting Agents such as Propeller Lettings) as this will decrease the time period between purchase and letting. Failing that taking out landlord letting insurance that pays compensation towards the rental value of the property for the time it is vacant can cost as little as £8 a month but could save you a lot of money in the long run.
Follow blogs by those who have been successful with property investments. Or, become a part of an online group. This will provide you with helpful information for you to start using in your own investment strategy. You could even speak with these individuals one-on-one.
Don’t buy extremely cheap properties. You may be attracted to the numbers, but the house might have difficulty selling or letting. Invest a bit more for a better property that is bound to show returns.
When you are buying property for investment, you should hire an affordable letting agent. Otherwise, you may end up spending lots of money getting repairs done or waiting around for the property to be let out. With Propeller letting maintenance will always be available for you, even during an emergency.
Exercise plenty of patience in the beginning. Your first property investment may be more time consuming than you expected. There may not be any good properties available, or perhaps the terms of the deals you are offered are not right. Don’t get anxious and invest in less than perfect scenarios. It’s really a bad move for your money. Wait for the right property to come along.
If you stick to these basics for Property Investing, you will find the task much simpler and a lot less stressful. It becomes difficult if you do not know what you’re doing. So, put into play everything that you’ve learnt here, and remember to call Wirral Letting Agents – Propeller Lettings if you need help Letting your first property.
As experienced Wirral Letting Agents having a good relationship between landlord and tenant can be crucial throughout tenancy as without it, you may be faced with a bad experience – on behalf of both landlord and tenant. Tenants may also risk the possibility of not receiving their deposit back at the end of tenancy if the landlord has not been happy with their treatment of the property. Likewise, if a landlord is lazy or harsh, tenants are not going to be cooperative or respect property regulations.
Tips for tenants
If you discover a problem in your living space, first assess whether it is something that you can fix yourself or if it is something that should be left to the professionals. If you pester your landlord persistently over trivial problems this can be annoying and they may end up giving up trying to help (which would be bad if a larger problem arose). In any case, be sure to be persistent when there is something you need the landlord to sort out; you may need to follow up your conversations with emails. If you do happen to damage the property or furnishings in any way, it is best not to try to cover up the damage and instead let them know straight away, even if it is a hard conversation.
Being positive and friendly with your landlord can get you far, especially when they are offering a service. In addition to this, be sure to pay your rent on time – reliability goes both ways.
Tips for landlords
When you have new tenants moving into your property, welcoming them is important. Any problems with the property should be fixed before the tenants move in.
If the property has a gas/electricity key, inform your tenants before they move in and maybe even top it up a little to ensure that they have enough gas and electricity for when they arrive. Also be sure to inform them in advance and give them a lot of notice if you are considering upping the rent as they may need to ready themselves financially. In increasing the rent however, your tenants may be more obliging if you offer to make the property worth that extra bit of money – i.e. by making improvements, supplying them with new equipment, etc.
If a tenant comes to you with a problem, fix it as soon as possible. Not only does this help out your tenant and sustain a good relationship, it also helps to keep your property in good condition, not letting it fall into disrepair. Also make sure that your property is safe and habitable, ensuring that the gas and electricity supplies are safe as well as wires, you may also want to provide smoke detectors.
Renovating Letting Properties and tips for landlords
Renovating and decorating a property you are letting can be difficult as you need to make sure it is not going to repel tenants as well as ensuring that the property, its contents and décor are long lasting and durable enough. The main concerns for Wirral letting agents when it comes to decorating is being aware of your budget and planning your time accordingly so that you are not spending too much time wasted, as time is money.
First decide what you want to do with the property and what needs doing. Create a realistic and structured plan of what you need to buy, what colours and furniture you want to include and in what order everything needs doing (there is no point moving in a new sofa in when your floor still needs laminating and your walls need painting). If you are renovating in between tenancies then it will be a good idea to start your decorating as soon as the current tenants have left, even before if they give you approval. You may even be able to apply for a landlord council tax exemption if your property will remain unfurnished and empty while you are renovating. Nevertheless, be sure you know what you are going to do before you do it.
Floors and Walls
Many opt for light wall colours and carpets in order to present the feeling of openness and space. It may seem like a very inviting idea and yes, plainness is the best option to go with in buy-to-let properties. However the problem with light colours is that they are not long lasting and will very easily get dirty. Carpets in particular as they have the most physical contact and will easily get mucky – especially when people don’t remove their shoes. Warmer colours such as mid-browns, grey, green, etc. could be a better option for walls and similarly for carpets.
When picking a carpet, the cheap and cheerful type will not last very long and will wear and fade in colour. This can cost you money as you will find that you will need to replace the carpet more often. In order to save money, you should try and go for the thicker and more substantial carpets. They may cost you more money upfront, but you will save money in the long run.
Opting for laminate flooring however is a completely different matter and can occasionally be almost as problematic as carpet. They are mostly durable and long lasting which would be perfect for your property but they can sometimes have defects. When wet or damp, they tend to expand which can obviously cause problems. This is usually due to people cleaning them with a wet mop.
How you decorate
Think about who you are letting to and what they will want. If you have a few bedrooms you may be looking at letting to a family or to multiple students. Especially in the case of students, they are most likely not going to care on how fancy the property is, as long as it is habitable.
When decorating, be sure to keep a neutral and clear mind and remember that you are not the one who will be living in the property. It is easy to get carried away by spotting styles and items that you yourself love, but this can in fact scare away tenants. Tenants will want a basic and neutral property that they can apply their own designs to, therefore try to avoid with extravagance or personal favourites.
Moving into your new home can be an exciting time, and you may not even be thinking about the far future, amidst the unpacking and buying of home items, and when you come to leave your new home. Getting back your rental deposit at the end of your stay is often an issue for many tenants, and you yourself could be a victim of not receiving it back from your landlord at the end. If a landlord feels that you have damaged the property in any way, they have a history of simply withholding part or all of the tenant’s deposit. Likewise, if a tenant fears that their landlord was not going to give them their deposit back, they could refrain from paying the last month’s rent – the landlord not being able to do much about it. Many Wirral letting agents provide a fair letting system, but there are a number of things that you can do to prevent such occurrences and to protect yourself with an unfair landlord or letting agent, ensuring that you receive your full deposit back. As a landlord, it is unlikely you will want to be the bad guy and not be able to return the deposit back to the tenant upon the end of their tenancy, so encourage tenants to do the following:
The most important things before, throughout and upon leaving residency is to keep a record of the appearance and condition of the property. Before you move in, take dated photos of your new home without all of your belongings, showing how you received it. If you damage anything during your stay or if something breaks of its own accord, be sure to let your landlord know immediately and follow your conversation up with an email, or if you emailed them prior, be sure to have a face to face or phone conversation with them. Upon leaving the property you should also take photographs, showing how you have left the property.
Keeping track of the condition protects you against any false or unfair claims of you mistreating the property and you have informed your landlord of any issues along the way.
At the beginning of your tenancy, it is important to scout the property with your landlord or agent and process through all items within. You yourself should thoroughly inspect and take photos of the property, paying attention to any impairment or broken objects. If they claim they will repair something which is broken then make sure you follow them up and only sign when you are completely satisfied with everything. It can also be worth recording the meter reading.
During your tenancy, if you find that anything gets damaged or broken that you cannot fix yourself, inform your landlord or agent immediately. This could include electrical damage/faults, dampness, plumbing, etc. Take any photographs of the damage and be sure to send an email as well.
Thoroughly examine your contract upon leaving. Clean if necessary and be sure to submit to any other conditions that your contract declares. Before leaving, take more photographs of how you are leaving the property and try to return it to the way it was when you first received it however, legally your contract should inform you that wear and tear is likely and okay.
With the aim to manage and to prevent anyone from losing out, the government introduced two types of deposit protection schemes. It is up to the landlord to determine which scheme is used, but anyone in the England and Wales vicinity who signs a short hold tenancy agreement has their deposit protected by one of these schemes, which also solves any disputes.
The custodial tenancy deposit scheme enables landlords to freely pay deposits into the deposit protection service, and when the tenancy comes to an end; both sides have to agree on a sum of deposit to be returned in order for the scheme to release the funds. The tenant then receives the funds through their bank account.
The insurance-based tenancy deposit scheme gives two options. The first is ‘My deposits’ and the second is ‘The tenancy deposit scheme (TDS). You deposit will be paid to your landlord, and your landlord keeps the deposit, paying a premium to the insurer.
There is also the option of an external examiner being appointed to offer solutions to any disputes.
Here at Propeller we are Wirral and Liverpool Letting Agents and find nothing more pleasing than satisfied landlords and tenants. The rental market can move very quickly with lots to do that could prove difficult if you are a first time renter. Here is our advice to help first time renters through a smooth and steady rental process.
If you are renting for the first time it is easy to become overwhelmed. People can expect you to know all about costs, rules, contracts etc. Legal requirements are also a challenge, and different landlords have different charges and the whole process can be confusing. Ask questions and act upon getting the answers as soon as you possibly can so that everything is clear in your mind.
Talk to your Landlord
Find out if you are in an ‘Assured Shorthold Tenancy.’ If you are then the landlord has a legal obligation to put your deposit in a protected deposit scheme. If they haven’t then contact them within 30 days of your moving in.
Make sure you are clear on (and can afford) the upfront costs such as a month’s rent in advance and a deposit (the average deposit is six months in rent.) Always confirm these figures as soon as you show interest in the property.
Find out exactly what this includes.The likelihood is there will be fees for professional cleaning, credit checks, the drawing up of contracts and reference checks. Plan ahead again by confirming with your references that they are willing to be used as references. If you are a pet owner, once again there can be additional fees.
Prepare your Documents
The process from viewing to renting can be done really quickly if you don’t have delays in sorting out/finding your essential documents. These include but are not limited to; proof of address, proof of work, colleagues who can act as a reference and possibly recent bank statements.
When searching for a renting property, organisation is key. The quicker you pay your fees and submit your documents, the closer you are to your new rented home.
The Residential Landlords’ Association found themselves in hot water last month after publishing advice for its members to visit their prospective tenants without warning, before entering a tenancy agreement with them.
The RLA published a blog post of a list of top 10 tips for landlords who are trying to find new tenants. Strangely, they also listed to be cautious of people who live with their parents because ‘often they become a problem.’ The most controversial point, was that landlords should make an unexpected visit to where the prospective tenants are currently living in order to view how they treat the property and to confirm that they actually live there.
As letting agents Wirral, we work with a lot of landlords and are aware of the fact that the RLA represents around 18,000 landlords who combined let more than one million homes in Britain.
The blog post also said that landlords could serve a tenant notice to leave on the first day of a tenancy. This is so they won’t have any delay in leaving them at the end of the tenancy agreement. However, this practice is in fact soon to be illegal following the passing of the Deregulation Bill in Parliament.
Once a property has been rented, it is illegal for a landlord to visit without providing at least 24 hours notice in writing and checking on prospective tenants on more than one occasion would be a breach of their privacy.
For advice on what is and isn’t appropriate to check on with your tenants, as a landlord; feel free to contact us at Propeller, Wirral Letting Agents.
Although we are Wirral Letting Agents, we also work in Liverpool and currently have a selection of properties for rent there. From the first of April, it became a requirement that anybody renting out a property within Liverpool must register their details with Liverpool City Council.
This is only the first stage of the application process. The council will advise you through the second part and let you know when your payment is due.
This is part of a city wide licensing scheme, the first of its kind in the UK and landlords of over 50,000 properties have already signed up. The legislation which is live now (since 1st April 2015) requires all private landlords to now hold a license.
The five year license fee is £400 for the first property, then £350 for each property thereafter.
Applications for the license will only be settled on the foundation that the landlord is deemed a ‘fit and proper person’ with investigation into conviction history of certain crimes involving dishonesty, violence or drugs or contraventions of housing law.
Any existing landlords that have not yet licensed their property and are continuing to rent are now committing a criminal offence and the management of their properties could now be taken over by the council.
For new or existing Liverpool landlords, contact us at Propeller lettings for more information and advice on licensing your property.