Section 21 consultation still open!

Section 21 consultation still open!

Our survey collecting landlords’ views in response to recent government announcements on Section 21 reforms is still live.  Almost 5,000 landlords have given their views so why not join them?  

To those who have already completed our Section 21 consultation survey, “Thank you”.

If you haven’t, there’s still time – this consultation may well be the largest landlord consultation exercise in our history, so please don’t miss out.  

A quick reminder – on 15 April the Government announced its intention to scrap the Section 21 possession process – so-called “no-fault” evictions.

It outlined plans to consult on:  

  • Putting an end to what the Government call ‘no-fault’ evictions by repealing Section 21 of the Housing Act 1988.
  • Strengthening the Section 8 possession process, so property owners are able to regain their home should they wish to sell it or move into it.
  • Building a consensus on a package of reforms to improve security for tenants while providing landlords with the confidence that they have the tools they need.

We have put together a short survey – which we urge you to complete

This will be one of the biggest changes in private renting for a generation – it is vital your experience and opinions help shape these reforms.

Thank you for your continued support and valued input.

source: https://rla.onlinesurveys.ac.uk

Royal Leamington Spa Buy To Let Annual  Returns Hit 13.02% in Last 10 Years

Royal Leamington Spa Buy To Let Annual Returns Hit 13.02% in Last 10 Years

Many Royal Leamington Spa people ponder the best places to invest their hard-earned savings and the best piece of advice I can give you is to do your homework and speak to lots of people. It depends on your attitude to risk versus reward. Normally, the lower the risk, the lower the reward whilst a higher risk is normally associated with the possibility of higher returns, yet nothing is guaranteed. At the same time, higher risk also means higher possible losses on your investment – yet if one looks at the bigger picture, the biggest threat to investing, predominantly when the investment is made in the short term, isn’t risk but actually volatility.

So where should you invest? The building society, the stock market, gold or property are options. This article isn’t designed to give you advice – just show you how different investments have performed over the last decade.

Let me start with the humble semi-detached house in Royal Leamington Spa … which in 2009 was worth £208,300 … so assuming I bought that property for that figure, then I looked at what if I had invested the same amount of money in a building society, into gold and finally the stock market…

Putting your money into the stock market (FTSE100) would have brought a return of 30.2% on your capital over those 10 years and an average of 3.79% a year in dividends (making an overall increase of 74%).

Gold doesn’t earn interest – yet it has increased in value by 26.9% over the same 10 years whilst putting your money in the building society, the money hasn’t increased in value, but would have earned you interest of 24.46% or the equivalent of 2.21% per year.

Investing in an average semi-detached house in Royal Leamington Spa over the last 10 years has seen the capital increase by 56% (an equivalent of 4.55% per annum) and the income (i.e. the rent) has provided a return, based on the original purchase price, of 125.49% or the annual equivalent of 8.47% … meaning the overall return, based on the original purchase price of an average semi-detached property in Royal Leamington Spa, is 13.02% per annum.

Notwithstanding No.11 Downing Street’s grab at the profits of buy to let landlords by hitting the buy to let sector with several fiscal punishments with a 3% stamp duty level, a decrease in high rate tax relief for landlords and an increase in rate of CGT on residential property profits, the facts remain that ‘bricks and mortar’ is still one of the preeminent and most constant investments available.

The bottom line is, the buy to let investment remains the mainstay of the British property market, serving to support aspiring homeowners as they work to conquer the, sometimes difficult, financial obstacles of home ownership. With Central Government over the last 30 years only paying lip service to address the lack of new homes being built or tackling the affordability on a consequential scale, it is highly probable this will continue for the next 5/10/15 years as there will always be a call for a respectable, and above all, honest buy to let landlords delivering decent housing to those that need it.

Royal Leamington Spa House Prices Up 3.3% in a Year

Royal Leamington Spa House Prices Up 3.3% in a Year

What does that mean for local Landlords and Homeowners?

The balancing act of being a Royal Leamington Spa Buy To Let landlord is something many do well at. Talking to numerous Royal Leamington Spa landlords, they are very aware of their tenants’ capability to pay the rent and their own need to raise rents on their rental properties.  Despite the ‘perceived ‘dark clouds of Brexit, evidence suggests many landlords feel more confident than they were in the Summer and Autumn of 2018 about aiming to push rents higher on their Royal Leamington Spa Buy To Let properties.

Looking at the data for the last 7 years, this shows that throughout the Summer months, the rents new tenants have had to pay on move in have increased at a higher rate than during the colder months of Winter.  This is because the Summer months are normally a time when renters like to move, meaning demand increases for rental properties yet supply remains pretty ridged.

Yet the Winter stats buck that trend and this is great news.

Rents in Royal Leamington Spa on average for new tenants moving in have risen 0.6% for the month, taking overall annual Royal Leamington Spa rents 2.8% higher for the year

However, several Royal Leamington Spa landlords have expressed their apprehension about a slowing of the housing market in Royal Leamington Spa and I believe, based on this new evidence, they may be overstated.  Before we get the bubbly out though, the other part of investing in property is what is happening to capital values (which will also be of interest to all the homeowners in Royal Leamington Spa as well as the Royal Leamington Spa Buy To let landlords).   I believe the Royal Leamington Spa property market has been trying to find some form of balance since the New Year.   According to the Land Registry….

Property Values in Royal Leamington Spa are 3.3% higher than they were 12 months ago

Yet, these figures reflect the sales of Royal Leamington Spa properties that took place in the late Autumn of 2018 and now are only exchanging and completing during the Winter / early Spring months of this year.

The reality is the number of properties that are on the market in Royal Leamington Spa today has risen by 8% since the Autumn

and that will have a dampening effect on the property market.  As tenants have had less choice, buyers now have more choice .. and that will temper Royal Leamington Spa property prices as we head into the middle of 2019.

Be you a Royal Leamington Spa landlord or Royal Leamington Spa homeowner, if you are preparing to sell your Royal Leamington Spa property in 2019, it’s important, especially with the rise in the number of properties on the market, that you are pricing your property realistically when you bring it to the market.  With the likes of Rightmove, Zoopla and OnTheMarket on everybody’s mobile phones and laptops, buyers have access to every property on the market and they will compare and contrast your home with other properties like yours – and will more than likely dismiss your property rather than view it.

To all the Royal Leamington Spa homeowners that aren’t planning to sell though – this talk of price changes is only on paper profit or loss.  To those that are moving .. most people that sell, are buyers as well, so as you might not get as much for yours, the one you will want to buy won’t be as much.  Look at the deal as a whole, the difference between what you sell yours for and what you buy at.  Finally, all the Royal Leamington Spa landlords – keep your eye’s peeled – I have a feeling there may be some decent Royal Leamington Spa buy to let deals to be had in the coming months.

Royal Assent: Tenant Fees Bill passes into law

Royal Assent: Tenant Fees Bill passes into law

The Tenant Fees Bill, banning landlord and agents from charging fees to tenants has now been given Royal Assent and will apply to all tenancies signed after June 1.

The bill – which has now officially become an Act of Parliament – prevent landlords and agents from charging: ‘Anything not exempted, that the tenant is required to pay as a condition of the ‘of the grant, renewal, continuance, variation, assignment, novation or termination of’ an assured shorthold tenancy, or licenceagreement.

This includes payments to third parties, either for services throughout the tenancy or for specific performance of a job and loans from third parties.

Once the ban comes into force landlords will mostly be limited to taking payments for rent and deposits from tenants – with rules around the size of the deposits and how they are dealt with significantly tightened.

Deposits will be limited to five weeks, where annual rent is below £50,000 with new, stricter rules on holding deposits.

Damages caused by the tenant’s breach of tenancy, such as the costs of cleaning the property after the tenancy ends, will still be deductible from the deposit. In addition there are two other ‘default fees’ you will be able to charge, if either:

  • the tenant loses their keys or 
  • is late paying the rent. 

These fees will also be limited. 

Landlords can still charge for a change to the tenancy requested by the tenant, or if a tenant wants to leave early. A full guide to the Tenant Fees Bill is available on the RLA website.

Timeline

Plans to ban tenants’ fees were first mooted in the Autumn statement in 2016, despite the, then housing minister, Gavin Barwell tweeting just a week earlier that such a plan was a ‘bad idea’.

RLA chairman Alan Ward said at the time: “Agent fees have to be paid by somebody. If any additional fees are passed on to landlords, tenants will end up paying them forever as market rents will increase.”

The government began its consultation into the plans in April 2017, despite the previous four housing ministers saying such a move would raise rents. It included plans to cap deposits – that had not previously been mentioned.

In June the RLA submitted a consultation response saying landlords should not be expected to shoulder the full cost of agents’ services that benefit tenants and should still be expected to pay for the check in inventory and checks and referencing.

It also objected to the introduction of a deposit cap and the extra financial burden the changes would put on landlords – already shouldering the burden of a number of recent tax changes.

Later that month, The Queen’s Speech revealed the plans would be published as a Draft Bill for further scrutiny.

The RLA asked the government to look at better enforcing existing rules over letting agent fees before looking to ban them outright.

In December research from the RLA found one in five landlords were considering ditching their agent as a result of the ban – with 57% planning to increase rents to cover increased agent charges.

In January last year RLA policy director David Smith told the Communities and Local Government Select Committee that landlords would be left counting the cost of the Bill, and in March the association warned plans to cap deposits would be a charter for rent cheats.

David Smith’s evidence to the Select Committee was backed up in May when the government’s official response to the HCLG Select Committee’s report on the draft Tenant Fees’ Bill estimated the ban would cost landlords £82.9million in the first year with letting agents paying £157.1m.

The bill also had its second reading in May – where it received all party support.

RLA policy director David Smith gave evidence to the Tenant Fees Bill Select Committee in June warning , once again, about the impact on landlords and tenants alike.

The RLA had major concerns about amendments to the bill, announced in December last year– including the reduction of the deposit cap from six to five weeks and changes to Client Money Protection arrangements, that could leave landlords vulnerable.

These issues were subsequently raised by Peers in the Lords.

However, the amendments were accepted, and this week the Bill went back to the Commons where Lords’ amendments – with the exception of a Labour amendment to reduce the deposit cap to three weeks – were approved.

The Act will now be implemented on June 1 this year.

The Act applies in England, with plans for a similar ban on tenants’ fees in Wales still being debated.

source: https://news.rla.org.uk