Thursday 14 April 2016

Landlord fined for gas safety negligence


A landlord from Plymouth has been fined £11,000 following an investigation into a dangerous gas boiler that was installed in his investment property.

Abdul Manik was prosecuted at Plymouth Magistrates Court by the Health and Safety Executive after it also transpired that he owned a number of flats in the property, all of which had no gas safety certificates.

Ignorance 

The council asked Mr Manik to provide gas safety certificates for the property on seven different occasions. Manik ignored each of these requests.

As such, the Health and Safety Executive served an improvement notice on Mr Manik. This required him to undertake gas safety checks and complete relevant maintenance, but this was not done before the stated expiry date.

In December 2014, a gas engineer called out by one of tenants in the property unveiled major issues with the gas boiler and notified the Health and Safety Executive.

The Gas Safe registered engineer classified the boiler as, ‘immediately dangerous.’ This meant that if it was operated or left connected to the gas supply, the boiler would cause serious danger to the property and the life of the inhabitants.

Guilty 

Eventually, the boiler was replaced by Plymouth City Council.

Mr Manik pleaded guilty to breaches of Regulation 36 (2) and 36 (3) of the Gas Safety (Installation and Use) Regulations 1998, and Section 33 (g) of the Health and Safety at Work etc Atc 1974. Alongside the fine of £11,000, Maik was told to pay costs of £800.

Speaking after the judgment, a health and safety inspector said, ‘landlords have a legal duty to carry out gas safety checks and maintenance which are there to protect their tenants from death or injury.’

‘In this case, Mr Manik ignored repeated requests to carry out the checks and as a result, a serious fault with the gas boiler at one of the flats undetected until discovered by an engineer,’ 
 

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Wednesday 13 April 2016

Buy-to-Let Mortgage Rates Drop to Record Lows

Buy-to-let mortgage rates have dropped to record lows, according to data from comparison website Moneyfacts.

After learning that they will be hit with a reduction in mortgage interest tax relief and higher Stamp Duty, landlords have finally received some good news.

Figures from Moneyfacts show that mortgage lenders are cutting their rates significantly in order to encourage landlords to continue to invest in the buy-to-let sector, despite the changes.

Indeed, buy-to-let mortgage rates have been continuously decreasing over the past five years, with the fixed rate sector experiencing notable reductions. The table below shows the average rate changes across the market.



Apr-11 Apr-12 Apr-13 Apr-14 Apr-15 Today
Average two-year fixed rate BTL 5.21% 4.90% 4.45% 4.03% 3.59% 3.32%
Average three-year fixed rate BTL 5.78% 5.16% 4.50% 4.62% 4.00% 3.87%
Average five-year fixed rate BTL 6.24% 5.53% 4.75% 4.76% 4.37% 4.00%


Charlotte Nelson, a finance expert at Moneyfacts, explains the changes in the sector: “The buy-to-let market has faced intense pressure recently, but despite this, rates have continued to fall across all fixed sectors. For example, the average two-year fixed rate has fallen by 0.71% in just two years, while the average five-year fixed rate has dropped by an equally significant 0.76% over the same period.

“While the new rules and Stamp Duty changes could potentially take the shine off buy-to-let investment, property is often seen as a safe bet, and with rental properties in demand and rent high, buy-to-let remains an attractive proposition.”

Nelson also suggests that pensioners are boosting the buy-to-let sector, as many take advantage of the new freedom rules introduced in April last year. During the past 12 months, almost £3 billion has been paid out in cash lump sum withdrawals, according to the Association of British Insurers.

Nelson believes it is “highly likely that some of this money has been accessed with buy-to-let in mind.”

She continues: “Savings rates are currently so poor that many are looking elsewhere to fund their retirement, so lenders have tried to capitalise on this new pool of cash by offering some of the best rates the buy-to-let sector has ever seen.

“In addition, providers also cut rates in the run-up to the Stamp Duty changes in order to attract those keen to buy before they were implemented, which has further aided the downward slide in rates. 

However, while the current pressures on the market are not yet causing rates to rise, borrowers should remember that they will now be facing tighter lending rules, including stricter affordability checks, so it is even more important for potential landlords to seek financial advice to see if buy-to-let really is the right option for them.”

 http://moneyfacts.co.uk/news/buy-to-let/buy-to-let-providers-slash-mortgage-rates

Monday 11 April 2016

Renting a house in Swansea is Cheaper than buying.

Buying a home is now cheaper than renting in nearly half of UK cities, despite rising house prices, new figures suggest. 

Savings can be upwards of £600 a month in some areas when rental costs are compared with an average monthly mortgage.
 
Buying is now cheaper than renting in 48 per cent of cities, up from 36 per cent in October, according to property website Zoopla.

The North-South house price divide means buying a home in cities such as Glasgow and Birmingham comes out cheaper than renting, while the opposite is true in many cities in the South, the figures suggest.

The findings comes as a recent study from Nationwide found the average house price in the South is now worth more than double one in the North, with average UK house price inflation at nearly 6 per cent in March. 




TOP 10 CITIES WHERE RENTING IS CHEAPER THAN BUYING (monthly rent vs mortgage payment)

1. Cambridge - £1,104 vs £1,873 (52%)
2. London - £2,109 vs £3,377 (46%)
3. Brighton - £1,200 vs £1,601 (29%)

4. Swansea - £600 vs £800 (29%)

5. Wigan - £437 vs £550 (23%)
6. Aberdeen - £752 vs £930 (21%)
7. Reading - £1,104 vs £1,351 (20%)
8. Bournemouth - £826 vs £1,000 (19%)
9. Rotherham - £426 vs £500 (16%)
10. Southampton - £778 vs £900 (15%)

ONS figures show changing face of UK housing market

Interesting data released by the Office of National Statistics (ONS) shows the economic downturn has shifted the demographic of home ownership in Britain.

Results from the latest economic review report from the ONS show the proportion of households who privately rent their home increased sharply following the downturn.

Surge
Those renting from a private landlord increased from 6% to 11% in the twenty years from 1988 to 2008. However, there was then a jump to 16% in the six years to 2014.

In contrast, the proportion of households owning their property increased slowly from 56% to 71% between 1981 and 2008. This figure then fell to 67% by 2014.

The fall in homeownership, coupled with the rise in private renting, reversed a three-decade trend of increasing numbers of home owners. The ONS report shows that this partly reflects tighter mortgage lending and the performance of house prices during the recovery period.

What’s more, the report shows that these features have assisted in cutting the fraction of households owning their own home with a mortgage. This has fallen from 43% in 1991 to only 31% in 2014.

Trends
While trends in homeownership have begun to reverse, the impact on specific groups of the population have been greater. The number of people choosing to stay living with their parents for longer has increased substantially, with patterns in tenure amongst independent property owners also altering.

Numbers of young people living in privately rented accommodation have risen massively both since the economic downturn and in the last decades. In 1987, only 9% of people aged between 26-30 rented. However, this figure increased to 19% by 1997, 30% by 2007 and 39% in 2014.

Nearly one-third of those aged between 31-35 privately rented accommodation in 2014, with one in five people aged between 37 and 41 renting.

Fall in ownership
A recent rise in private rentals has been driven by the sharp fall in home ownership and the lower number of mortgages being taken out. Between 1977 and 1987, individuals living in a property with a mortgage increased. However, in the next two decades, the proportion of young people of these properties decreased, but the mortgage owning population between 45 and retirement age increased. 

This reflects that many purchasers between 1977-87 were youngsters who had now matured.
Differences recorded between 2007 and 2014 are alarming. The report highlights the prevalence of mortgagors is presently lower than in 2007 for every age group below 55.

It shows that the increase of private rentals has been particularly noticeable amongst 21-25 year olds. Proportions of renters in this age group increased from less than 20% in the 1980’s to over 60% in 2014. Smaller percentages of these groups live in mortgaged homes than in any time since records began.

Wednesday 6 April 2016

Energy efficiency – Landlords do you know your responsibilities?

New energy efficiency rules hitting the Private Rented Sector have come into force  – but do you know your rights and responsibilities?

Tenants  can now ask landlords for permission to carry out energy efficiency improvements to privately rented properties – with the landlord unable to unreasonably refuse consent.

The  new legislation was introduced on April 1 2016, with improvements ranging from everything from improved insulation and replacement windows to solar water heating systems. They also extend to installing a gas supply in an off gas property where the mains are within 23 metres from the property.

Under the new rules, which apply in England and Wales, the tenant must pay for the works and no upfront costs should fall onto the landlord – unless they have already agreed to contribute.

Landlords must act quickly once a request is received – with a  period of just a month to respond.

The new legislation states that consent for the works must not be ‘unreasonably refused’ – although there are a number of instances where the landlord does not need to consider the request – for example if it would hit the house price, knocking more than 5% from the market value.

There are also some circumstances in which the tenant cannot legitimately ask for improvements – for example if they are due to move out, or eviction proceedings are underway.

However tenants can take landlords to a tribunal if they believe they have not complied with the regulations.

There are a lot of myths surrounding this legislation, including rumours that the landlord must carry out or pay for the works. This is not the case and in fact the tenant must prove that they have adequate funds available to pay for it.

Under separate regulations from April 2018 a landlord cannot grant a new tenancy
of a property with an EPC rating below an E, and after April 2020 when it will apply to all rented properties. It is likely – but not so far confirmed – that the minimum standard is likely to rise to a D rating by 2025 and a C Rating in 2030. A civil penalty of up to £4,000 will be imposed for breaches.

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New survey shows shocking problems for landlords not using letting agents

A new survey by insurer Direct Line for Business suggests that landlords who have not instructed letting agents to act for them are often making significant numbers of errors - including unwittingly giving tenants contracts that are not legally compliant. 

Of the landlords who don’t use a letting agent, 58 per cent used adapted tenancy agreements from either old agent contracts or other landlords (38 per cent) or an updated template they found online (20 per cent). 

It appears landlords employ letting agents when they first rent out the property, then use the old contract template when agreeing a direct rental with new tenants or upon renewal with their existing tenants. Direct Line for Business says the lack of professionally reviewed tenancy agreements may explain why 13 per cent of landlords have experienced disputes specifically arising from tenants’ rental contracts in the last two years.

It says it is also a concern that nine per cent of landlords have not informed their tenants that their deposit is held in a government-backed tenancy deposit protection scheme - despite the fact it’s a legal requirement that landlords provide the name and contact details of the tenancy deposit protection scheme and its dispute resolution service within 30 days of taking a deposit. 

The research also revealed that four per cent of landlords have not taken any deposit from their tenants.

“If an old contract is adapted it may not comply with new legislation or be relevant for the current market. Given the volume of disputes arising from tenancy agreements it’s important to get the contract seen by a legal professional before it’s signed” explains Nick Breton, head of Direct Line for Business.

YOUR AGENT Comment

We ensure that all our landlord clients are kept up to date with any changes in legislation to ensure they are fully aware of thier legal obligations. Why not take the stress out of renting your property and let YOUR AGENT be your agent?