Landlords - How To Avoid The Dreaded Void Periods

All landlords at some point will experience the unfortunate situation of having void periods, hopefully not for any protracted periods. Read a few our tips which could help you to avoid these situations, or at least reduce them to a minimum.

Do your research

One of the easiest ways to avoid long void periods for your property is to ensure that you have the right tenant in your property in the first place. Having a tenant in your property who is suitable and can afford the requisite rent will, of course, reduce any headaches for you later down the line. Ensure that you agent has properly referenced tenants, and if at all possible, try to meet prospective tenants to establish a good relationship from the outset.

Short term vs. long term

As well as researching your tenants, investigating the area that you are letting your property within to ensure that you are asking for a fair price will also help you to side-step any void periods. A keenly priced property will attract more applicants, giving you a greater choice of tenants. It is important to keep in mind here that offering a more competitive rental price could lead to longer tenancies, therefore finding the balance is imperative for any landlord.

Property inspections

Regularly inspecting your property can be a good way to build up further rapport with the tenant if you are managing a property yourself, and allows you to ensure that it is in a good condition. This can benefit you in multiple ways; firstly, it helps to ensure that your property is of a nice standard for the current tenant, as well as meaning you don’t have to waste any time should your tenant move out and you want to bring your property to market immediately.

Find the right agent

With the raft of new legislation which has come into place in the lettings industry, having a well-informed and proactive estate agent has never been more important. Employing an agent on a fully-managed service will take many of the responsibilities out of your hands as a landlord and with the superior marketing available, as well as pools of applicants who are tried and tested, the most straightforward way to reduce your void periods could be to choose your agent wisely.

What Does The Stamp Duty Cut Mean For Landlords?

The buy to let sector has seen a tremendous amount of change over the past few years in order to help rebalance the property market, with key pieces of legislation such as the Tenant Fees Act and the recent Electrical Safety Standards regulations. The changes to stamp duty will go some way to reigniting the buy-to-let market and offers landlords a tremendous opportunity to make the most of the tax changes.

With the temporary increase on the stamp duty threshold to £500,000 until 31st March next year, first-time buyers and existing homeowners are set to save up to £15,000. For additional and investment properties, stamp duty is also removed up to this value, however the 3% surcharge remains.

Charlotte Nixon, mortgage expert at Quilter, believes that the changes to stamp duty could have the consequence of more investors returning to the market;

"Buy-to-let investors have left the market in their droves over the last few years after tax changes have made it an untenable investment for many. The stamp duty holiday may serve to entice some of these investors back to the market.
Not only will this cut help to reignite the property market but also improve the supply of rental properties, which has been dwindling over the last 12 months."

Nixon is supported in her opinion by David Whittaker, Chief Executive of Keystone Property Finance who believes;

"The Chancellor’s decision to cut stamp duty will have positive implications for homebuyers across the country and will certainly help to stimulate the housing market. Importantly, this latest cut will also go some way towards providing a much-needed boost for the buy-to-let sector."
"As a result of this measure, many portfolio landlords across the UK will now be considering new buy-to-let purchases."

The numbers can be useful to bare out the extent of the potential savings for landlords looking to increase their portfolios – before the stamp duty holiday was introduced you would have paid £26,000 in stamp duty but now that is reduced almost by half to £13,500.

If you are thinking of investing in an additional property or looking to increase your property portfolio, then making the most of the stamp duty holiday is advised – contact us today to see how we can help you.

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Buy To Let Mortgages

Now that the property market is resuming activity we have seen property demand increase, especially in the lettings market. Research by Rightmove found that demand for rental homes rose by 33% in May 2020, which is higher than the same time last year! Mortgage lenders have also re-introduced many of their products to accommodate the increased activity.

The range of mortgages has expanded over the past few weeks with buy to let options re-entering the market. There are many lenders that are offering a range of mortgage products with excellent rates. If you are a landlord and have not needed a mortgage payment holiday, this could be your window of opportunity. Landlords may wish to use this time to consider expanding their portfolios as there are plenty of prospective tenants looking for their next home. Investing in property now could lay the foundations for long term capital gains.

How has buy to let mortgage availability changed?

The outlook for buy to let landlords has improved vastly recently. Landlords who are seeking buy to let mortgages now have more choice with Barclays, Lendinvest, and Virgin Money (to name a few) renewing their products to include increased variety. Over the past month, buy to let products have increased to levels almost the same as March 2020. If you are a landlord, now if a great time to re-assess your property portfolio and consider expanding, or recalculating your portfolio financing. There are an additional 280 further options for buy to let mortgages. This rise shows the mortgage lenders shift in focus from existing borrowers, to including new borrowers too. This means that if you have been considering renting your home the market has options available for you.

What about interest rates?

Buy to let mortgage rates are low, as with all mortgage rates currently. This is because the Bank of England’s base rate is still currently sitting at 0.1%; making rates increasingly competitive. The greatest savings have been identified with 5 year fixed rates; the greatest reductions can be found with five year fixed with 80% LTV. If you are in a position to switch your mortgage deal, or enter the buy to let market, now is the perfect time to look around.

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Update - Electrical Legislation

As a landlord, it is important to keep up with the latest legislation in order to keep your tenants and yourself secure. The latest change to keep abreast of is the government’s new electrical safety regulations – specifically for electrical installations in your properties. Fall foul of these rules, and you could be facing financial penalties of up to £30,000.

In recent years we have seen somewhat of a reform to the rental sector with seismic changes including the Tenant Fees Act, Fitness For Human Habitation Act and a potential review of Section 21 evictions. The new Electrical Safety Standards regulations will apply to all new tenancies from July 1 2020 and for existing tenancies from April 1 2021.

One of the key features of the legislation is electrical inspections, with landlords having to ensure that all electrical installations in their property are inspected and tested by an appropriately qualified electrician at least every five years. Documentation around these inspections then need to be shared with new, existing and prospective tenants as a legal requirement. Should the local authority request the paperwork, a landlord is also then required to supply this within 7 days of receiving the request.

Here is an overview of the changes;

  • A landlord is required to obtain an inspection and test report from a qualified person, supply that report to each tenant within 28 days, and to the local housing authority within seven days of a request. A copy must be retained until the next inspection is due.
  • For new tenancies, the landlord must supply a copy of the last report to any new tenant before occupation, or any prospective tenant within 28 days of a request.
  • If the report requires further investigative or remedial work, this must be carried out within 28 days or sooner if the report suggests. Written confirmation of the work being carried out by a qualified person must then be given to the tenant and the local authority.
  • If a landlord is in breach of the regulations, the local authority can serve remedial notices, if necessary, carry out the required works themselves recovering their costs from the landlord and can impose financial penalties of up to £30,000.
  • If you would like to read the full guide for landlords published by the government, you can do so here or if you would like to talk to us about your rental properties, please do not hesitate to contact us and we will be able to advise you.

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