Tim Trembath Chairman & Director of Residential Lettings
Joan Bull Residential Lettings Manager, Bishop’s Stortford
RICHARD MORRIS
Independent Mortgage Adviser
Buy to Let market Snapshot Still 12% of the whole market
More tenants than properties
Rents are rising
Void periods decreasing
New Lender Entrants to the market – mostly through
Intermediaries
555 products available as at March 2012 compared to just
214 in July 2010 and a low of 145 products in 2009
Source: CML, ARLA
and Trigold
Drivers for increased rental demand
Significant barriers to home ownership
Reduced numbers of FTB’s
Higher Student numbers
A growing population and more households
More pensioners and increased immigration
Let’s look at these in more detail:
Tenant demographics.
Pensioner
s
Increasin
g
16%
One person
households
24%
Age of
first time
buyer
29 (assisted)
Net
Migration up
252,000
2005-2010 2006-2016 2010 2010
Source: Communities and
Local Government
Buy to Let lending history
£44.6
billio
n £27.2
billio
n £8.5
billio
n
£10.4
billio
n
£13
billio
n 2007 2008
2009 2010 2011
Source: CML
• 1.3m BTL mortgages outstanding worth £152bn
– 12% of all mortgages
Buy to Let Lending today The average LTV across portfolios is 46%
Many Landlords are enjoying low SVR rates with their
current provider
Some lenders will allow redemption without fees or
given incentives
The benefit of low rates may be lost due to low gearing
(LTV) and higher tax takes Solid tax advice should be sought to maximise income/minimise tax
liability
Source: ARLA Review and
Index – Q3 2011
Buy to Let Lending today 73.6% of Landlords DO NOT expect to sell their
property in the next 12 months
8.6% of Landlords DO expect to sell their property in
the next 12 months
The average investment period is 19 years with 35.5% of
landlords expecting to keep their property for 20+ years
73.6% of respondents report more tenants than
properties available for rent
Source : ARLA Review & Index
2011
Buy to Let Lending 26.7% of landlords DO expect to buy more property in the
next 12 months
AVERAGE HOUSE PRICE
Quarter 1 1985 - £33200
Quarter 1 2005 - £152790
Quarter 4 2010 - £163244
March 2012 - £163327
Source: ARLA review and Index 2011
Nationwide Building Society
Cash & Geared investments Cash Key
Differences
Geared
£150,000 Investment £150,000
1 Property for
£150,000
Property 3 properties at 70% LTV
with
100% risk during void
periods
Risk Spread the risk of void
periods
Rental Income- Wholly
taxed after allowable
1 x Capital Growth
Income Potentially lower tax
liability off set against
mortgage interest.
Potentially
3 x Capital Growth
Buy to let lending Facts Minimum 20% Deposit (best rates with higher deposits)
Minimal earned income required
First Time landlords
No maximum Age
Interest only or Capital and Interest repayments available
Rental coverage 125% of interest only payments
HMO’s (homes of multiple occupancy) available
Light refurbishment products available
RICHARD MORRIS
Independent Mortgage Adviser
Lettings without the headache
Maria-Christina Peyman
Dispute Resolution Solicitor
Nockolds LLP
18 April 2012
1. Breaches of the tenancy terms
2. Landlord’s rights & obligations
3. Following service of s8 & s21 notices
1. Breaches of the tenancy terms
Failure to pay the rent
• Do not ignore it
• Arrears of 2 months or more – “Section 8 Notice”
Bringing a pet in to the property
• What are the grounds for issuing a claim for possession
• “Ground 12” a discretionary ground
• What is the impact of a discretionary ground
2. Landlord’s rights and obligations
I gave my tenant 24 hours notice, now I want to
enter the property
• S11 Landlord & Tenant Act 1985 and s16 Housing Act 1988
• Reasonable access for repairs
• Quiet and peaceful enjoyment and permission
• The tenant who persistently says “no”
Has the property has been deserted?
• Landlord is able to take possession – Housing Act 1988
• Illegal eviction – Protection from Eviction Act 1977
• Consequences of illegal eviction
• Steps to ascertain desertion
Is a landlord required to supply an EPC?
• Yes - The Energy Performance Regulations 2011 and 2012
Letting a property for 4 months
• Housing Act 1996
What notice do I have to give to get my property
back?
• S21 Housing Act 1988
Taking 6 months rent in advance
• Ensuing periodic tenancy and the rental period
3. Following service of a s8 or s21 notice
• When to use which
• What are the timescales
• What happens if the tenant does not go
• Issuing the possession claim – accelerated procedure / standard
procedure
• The possession date passes but the tenant still has not gone
• Bailiff’s appointment
Summary
• Keep rent arrears in check
• Make sure that any notices are correct, any errors simply
lead to more time and if arrears are an issue then higher
arrears
• Consider whether you are likely to recover the arrears – if
not might a s21 notice be more time and cost effective
• Association of Residential Letting Agents
• LASTLY in your packs you will see details of the fixed fee
service we offer for s21 notices and the ensuing work
Richard Roberts Managing Director & Director of Commercial Services
What are the risks?
9 Stephenson Road, Southend On Sea, SS9 5LY
Occupier Demand • Location • Condition of Building • Planning
Tenant & Lease • Covenant • Length of Lease • Income Cover Ratio
Loan to Value • Loan to Value • Amortisation • State of the Market