Landlord’s Guide: Grants For An Eco-Friendly Property

Everything today seems to revolve around the ‘green agenda’. Some people are passionate for the cause whilst others don’t view it as a main priority, or think it a maze of the unknown.

Landlords can often dismiss the green vision as a drain on their property profit, when in fact did you know you could cover such costs with various grants? And offering an eco-friendly property can actually make it more attractive and profitable?

What are the benefits of making your rental property more energy efficient to both you and your tenants?

• Increase in property value
• Lowers energy bills for tenants
• Reduces rent arrears
• Attracts longer term tenants
• Achieves higher EPC ratings
• Property is easier to let
• Reduction in emissions

We’re here to shed some light on a few of the great grants on offer to landlords and homeowners across England and the UK.

Green Deal

If your property has an electricity meter, then you’re eligible for the Green Deal. You can take out a loan to cover home improvements that will make your property greener, and repay through your electricity bill.

Because of this repayment method, both you and your tenant must agree to the terms. They will be expected to cover the bill if you choose to repay in this way as opposed to covering costs outright yourself.

How does it work?

A Green Deal Assessor will pay you a visit and decide which measures will be the perfect fit to improve your property. This could include adding insulation, improving the heating system; draught proofing, installing new windows or looking into ways your property can produce renewable energy.  From here you will be granted a loan to carry out the suggested works if you wish.

Note: Subsequent tenants will also be liable for this additional charge if you choose to repay via the property’s electricity bill, so you must tell them too. However, the money they will save in utility bills could well cancel out the cost of the repayments, and they will enjoy a clear, green conscience to boot!

Landlord’s Energy Saving Allowance

As a landlord, you could claim back up to £1,500 in tax reductions if you install wall or hot water heater insulation, draught proofing or cavity loft insulation. The rewards will be passed on to your tenants, as they will benefit from lower utility bills and a more eco-friendly and responsible home.

Note: You can include this in as many properties as you own, so if you have six properties, you could claim back up to £9,000 etc.

Feed In Tariff (Fits)

These were introduced in 2010 and are really something to get excited about! If you install a renewable energy source at your property such as a wind turbine, solar panels, anaerobic digesters or hydroelectricity, you could secure an additional revenue stream.

How? Because you can be paid for the electricity you generate with such measures from the national grid and energy companies – even if the property uses the energy itself! You even receive a ‘bonus’ if you provide the grid with additional energy.

It’s all part of an incentive to become a greener country less reliant on fossil fuels. It also enables your property to become more self-sufficient which is a major advantage for potential tenants.

There are a plethora of both grants and loans for landlords, but what is available from council to council varies so we recommend you contact your local council as a first port of call for help and advice.  You can also find more information on the Energy Saving Trust website.

Alternatively, if you have a property to let, why not contact our office?  You could also download our Landlord Brochure for information on the landlord services available to you.

Ten Points To Consider When Moving From Halls To A Student House

Moving from university halls to your very own shared student house can feel liberating and rather grown up. And it is a rather grown up thing to do, which is why you should treat it as a big decision and consider the following… 

1. Choose Your Housemates Wisely

Perhaps you’ll live with the same people you did in halls, or maybe other friends. Regardless, it’s usually a good idea to avoid living with ‘Party Pete’…awesome on a night out, not so good when the night out is in your living room at 3am on deadline week, and where’s his share of the rent again?

2. Make Sure You Use A Reputable Letting Agency

Some students choose to find (often unreliable) landlords on free advertising websites etc. While you may save a few pounds in the short term, when your boiler breaks you could find yourself cold for a very long time after the landlord fails to appear. Choosing a reputable agent gives you peace of mind that your home is safe and if anything goes wrong, it will be fixed quickly.

3. Make Sure Your Deposit Is Held In A Deposit Scheme

As of 2007, ALL deposits on rented properties are required by law to go into a recognised scheme. A Tenancy Deposit Protection scheme protects a tenant’s deposit and ensures that it will be refunded in full at the end of the tenancy providing certain terms are met. Martin and Co is the largest user of The Deposit Protection Scheme and all Martin & Co local offices hold deposits under one of the three Tenancy Deposit Schemes in England and Wales and the Safe Deposits scheme in Scotland.

4. Factor In ALL Costs

Gone are the ‘all inclusive’ student halls days. Make sure you know what is –and isn’t – included in your rent. Internet, gas, electricity, water and TV licenses all need paying for, and utility inclusion differs from property to property.

Also remember to attain the relevant form from your university to make you exempt from council tax! If you’re going all out and installing Virgin/Sky, remember the installation costs!

TOP TIP: Remember that you require a TV license even if you are only watching TV online. One license per house. Don’t be left with a hefty fine. 

5. Lay Out A Chores Schedule

Boring? Yes. Necessary? Absolutely. We’re not asking you to go all ‘Monica Geller’ on your new housemates… but sharing the tedious tasks avoids the inevitable arguments in the long run when the one person cleaning the toilet eventually cracks. Tidy space, tidy mind etc.!

On the subject of tidiness, use common sense – be clean and don’t break anything. If accidents do happen, let your landlord know as soon as possible. Treating the property, as if it were your own, will protect you when you come to the end of your tenancy and you need your deposit back.

6. Split Bills Properly

There’s a few ways to do this:

a)    Make sure bills are in everybody’s name – not just one person’s. If they’re late andin one person’s name, it could affect their credit rating in future. (It may seem like miles away, but CCJs can stay on your credit file for SIX YEARS, and will stop you getting loans, mortgages or even phone contracts during this time!)
b)    Set up a joint bank account – all set up a standing order to pay into the account monthly (or as your student loans come in) and have all bills deducted from the joint account.
c)     Share the bills – i.e. one person is assigned gas, one electricity, one Internet etc…

7. Create An Inventory List

A good landlord is likely to create one for you, but it can’t harm to have your own. It’s amazing how much you can forget in a year. “Was that sofa in the living room or dining room?” and “Is the microwave mine or Sarah’s?” “Did we buy the mop or was it already here?”

You can incur charges upon checkout if:

a) Any items are in a different room from when you moved in;
b) Any items are missing or;
c) Any items need removing once you leave

Leaving an ironing board may seem like a kind thing to do, but if it’s seen as litter then is it really worth a removal fee?

TOP TIP: Take photos. Despite having inventory, having photographic evidence of every item as it was when you moved in gives your that extra bit of protection when it comes to getting your deposit back at the end of the year.

8. Read Your Tenancy Agreement

Knowledge is power. Arm yourself with all the information you need at the beginning of the tenancy to avoid any nasty surprises at the end.

TOP TIP: Never, ever move into a property without a copy of the tenancy agreement in your pocket. This is the only way to guarantee there’ll be no surprises – and you’re within your legal rights to request one.

9. Do Not Make ANY Changes Without Consulting Your Landlord/ Property Manager

A student house may seem a far cry from your rule-ridden halls of residence, but it’s still a rental property and rules still apply. Whether you think painting an purple wall is a good choice or not, always seek your landlord’s permission first or you could be charged for it when you move out! Even things as trivial as installing a picture hook could land you in hot water.

10. Research, Research, Research!

Research your landlord, research the area and research the house’s history if you’re unsure about something. Martin & Co have a great handbook filled with helpful tips, check it out.

In the mood to look at some seriously fab student properties? Then check out The Martin & Co website, where we have a load of student rental properties available in your areas.

Alternatively, you can contact our office so we can match you with students and properties in your area. We even have a dedicated student webpage, filled with help and advice:  http://www.martinco.com/students  

Election and the Sales Market

There is reason to believe that house prices can affect a general election and this can be tracked to a local level. High values can make homeowners feel better-off, economic confidence rises, people spend more money on other goods, the economy looks brighter and the current Government could possibly achieve some more votes.

But what of the impact of the general election on house prices?

Pre-election nerves

Recent figures from Nationwide showed that annual house price growth in the last quarter of 2014 to December was its most lethargic for over a year, in the south west prices increased by around 0.83% compared with 1.97% in 2013.

It indicated a faltering market where buyers are cautious of over-inflated prices and sellers may need to reset expectations after vigorous growth a year ago.

Post-results

Jitters in the housing market, thought to be caused in part by the election, do not necessarily translate into falling house prices.

Recent studies show that generally prices surge around the time of a general election and soon afterwards as pent up activity is released.

On average nationwide, prices 12 months before are 4.9% lower than at an election, while 12 months afterwards they are 8.6% higher.  To relate this to Exeter, we are currently running a little behind the pack.  In the last year prices in Exeter have risen by 2.17% according to Zoopla, which is just under 56% lower than the national average.  If this same 56% is translated to the next 12 months, that would indicate a potential increase of 3.78% for Exeter.

So does this mean sellers should wait until the election results to market their home?

Not quite. It is reported that election week is traditionally one of the busiest times in the housing market as a glut of sellers register their homes and competition becomes fierce.

It may be worth getting in there first in by listing your property for sale now to ensure it gets the maximum exposure and best price.  Please call or email me if you would like a sale appraisal or for more details. Regards, Jon.

Deregulation Act 2015

The TDS has kindly provided a summary of the Deregulation Act 2015 to assist people in understanding the changes:

The Deregulation Act 2015 came into effect on 26 March 2015. It amends the law to clarify deposit protection requirements following two court rulings.

Superstrike v Rodrigues 2013: This case confirmed that a statutory periodic tenancy is a new tenancy. The court decided that deposits on new statutory periodic tenancies must be protected, and by implication, prescribed information must be served within 30 days of the start of that tenancy, even if requirements for deposit protection had been met at the start of the fixed term.

Charalambous v Ng 2014: The court decided a deposit taken before 6 April 2007 did not need to be protected but a landlord could not issue a valid s21 notice unless the deposit had been protected or returned to the tenant.

The Deregulation Act says:

If the deposit was received before 6 April 2007 and is held against a statutory periodic tenancy, which also began before 6 April 2007:

-          The landlord is NOT required to protect the deposit under the Housing Act 2004.

BUT

-          From 26 March 2015, if the landlord wishes to gain possession of the property under section 21 Housing Act 1988, the deposit must be protected and prescribed information must be served before a valid section 21 notice may be issued.

-          No financial penalty applies for late protection.

If the deposit was received before 6 April 2007 and is held against a statutory periodic tenancy which began after 6 April 2007:

-          Unless the landlord has already done so, the landlord must protect the deposit and serve prescribed information:

o    by 23 June 2015 or; if earlier

o    before a court decides on proceedings under s21 Housing Act 1988 (for possession) or s214 Housing Act 2004 (for failure to protect a deposit)

-          If on 26 March 2015 the tenancy no longer exists or no deposit is being held, the deposit protection requirements are deemed to have been complied with.

If the deposit was received on or after 6 April 2007 and was correctly protected at the time:

-          The deposit does not need to be re-protected nor prescribed information served again on renewal (or at the start of a statutory periodic tenancy) as long as:

o    The tenant(s), landlord(s) and the premises remain the same; and

o    The deposit is held in the same scheme

Prescribed information can include details of a person representing the landlord

The Act confirms that where an agent has protected the deposit on behalf of the landlord, the agent’s contact details may be provided in place of the landlord’s.

Who is affected by these changes?

The law is relevant to any deposit currently held on an assured shorthold tenancy.

It assists landlords who did not re-protect deposits or re-serve prescribed information when a tenancy was renewed or when a statutory periodic tenancy arose. Tenants must still be given revised prescribed information about their deposit if there is a change in tenant(s), landlord(s), premises or the deposit protection scheme.

If as a result of the Deregulation Act a tenant loses a claim relating to deposit protection or loses their challenge to a section 21 notice, the court will not order the tenant to pay the landlord’s costs - as long as the tenant started their court case before 26 March 2015.

Tenancy Deposit Scheme requirements when renewing a tenancy

You may not need to do anything extra to comply with the law. However, depending on your terms of membership, your tenancy deposit protection scheme’s rules may require you to re-protect the deposit on renewal. TDS members must re-protect a tenancy deposit on the renewal of a tenancy when:

-          Using pay as you go protection (TDS for Landlords, DepositGuard, Let Only).

AND

-          There is a new fixed term agreement OR the periodic tenancy has material changes to the original agreement, such as rent or tenant(s) named on the agreement. 

Heat network regulations may affect landlords

The Residential Landlords Association (RLA) has warned that some landlords may be required to notify the National Measurement and Regulation Office (NMRO) regarding their property heating systems by 31st December 2015.

A ‘Communal heating’ situation will typically trigger a need for landlords to provide details to the NMRO.

The RLA hoped these notification responsibilities would only impact institutional landlords, such as university halls and nursing homes. However, it appears they may affect HMO and bedsit property landlords who could be required to send notification of their ‘heating network’ to the relevant authorities.

A landlord must submit notification to the NMRO regarding details about the heating system of the property by 31 December 2015, and if required, install individual meters by 1 April 2016. There will be ongoing duties regarding maintenance and billing.

A landlord is a heat supplier if ALL of the following apply:

·         there is distribution of thermal energy in the form of steam, hot water, or chilled liquids from a central source in a building (e.g. a gas boiler)

·         the thermal energy is used to provide heating, hot water or cooling

·         the building is occupied by more than one final customer

·         the landlord bills more than one occupier for the heat or hot water that that person has used (or a proportion of).

Where the landlord is a “heat supplier” as defined above, the landlord must notify the NMRO by 31 December 2015. The notification must contain certain prescribed information. Although there is no prescribed form for this notification, the NMRO has produced a template that is suitable for this purpose.

The RLA is working with DCLG and DECC to find out just how these new regulations will impact landlords, see what can be done to limit their scope and to ensure there is clarity about what properties will be affected.

Top investment purchase

It can sometimes be hard to find a property to buy that you know will rent out well.  It is therefore advisable to buy a property which has been let previously or is in an area renown for letting well.

So on that note, I introduce this superb four double bedroom end-terrace house in Kings Heath at £250,000.

The property has previously been successfully let for a number of years and is suitable for a large family, sharers or a company let - with so many facilities near by such as excellent schools, supermarkets, retail parks, public transport and access to the M5 there is little wonder why the area is so popular.  If you would prefer to purchase a property with tenants in situ, we have a very similar property that is soon to become available in the same area with tenants in situ.

Please follow the link below for the full details.

http://www.martinco.com/property/for-sale/192826

Investing in Exeter Property

Buy-to-let in Exeter is currently very popular.  We have seen a vast increase in the number of investors contacting our office looking to purchase their first or an additional property.

With the current number of investors looking to buy-to-let and the lack of top rental property on the sales market, it is easy to see why some purchases are made without having the time taken to fully analyse the market to ensure there is longevity in the investment.  We have previously looked into the potential rental returns of property a number of times, however the renovation of property can also provide a large boost to the capital growth of an investment.

There are many stories where investors have got it exactly right, like a property in St Leonards which sold for £178,750 in December 2012 then again for £246,500 following refurbishment just over two years later, giving a gross profit of 37.9%.  Granted they have spent some considerable money on the property and it looks superb, however with an increase of £67,750 there must be a reasonable profit.

On the other hand, at that time in 2012 for around £180,000 you could have bought a 2 bedroom apartment at the Quay or near the city centre in good condition, let it for around £800pcm but still have a value of around the £180,000 mark.  A two bedroom apartment for a similar price to a decent semi, doesn't in hindsight, quite stack up. Although these stories are few and far between, I still see mistakes being made on a day by day basis in Exeter. If you make even a small mistake, it could still prove to be very costly.

So what should you buy in Exeter? One option is a House of Multiple Occupation (HMO). While they can be profitable, they can make things considerably more complex and costly, with the need for an HMO licence, higher levels of wear and tear and so on.  If you look back at some of my previous articles, you will see a lot of interesting facts on which types of properties let well and also, sell well!

Mortgage rates on buy to let are also very low at the moment and for the right property and person you can get rates below 3.9% if you put down a decent deposit of 25%, but the best rates are for deposits of 40%+. Also, the deposit will ensure you have plenty of equity in the property, if the property market stagnates in the future. The important thing to remember is the amount you can borrow is driven by the rental income, so it is vital you can identify a property with a decent yield, that lets easily.

Finally though, if are investing so much time and money in building wealth for you and your family, it is equally important for you to identify ways to protect it. Do not forget, if you spend years building a successful property empire in Exeter, when you are no longer around, your family could face an inheritance tax bill of 40 %, which they would have to pay within six months of the death. In a buoyant market, like now, selling in six months is not an issue, but what if the market was like it was in Exeter between 2008 and 2012, when things took seasons to sell, not weeks. Quite apart from losing nearly half of the assets you built for your family to the tax man, if they had to sell some of your portfolio, possibly at a discount because the taxman wanted his money quickly, it might be wise to consider some life insurance that will offer protection against inheritance tax. 

There are plenty of good advisors in Exeter who can help you with the mortgages and life insurance, we would be able to point you in the right direction for this. We can also help you choose the right Exeter property to buy and we currently have a number of superb properties for sale with tenants in situ so please call us and we can advise you on the latest best buys.