Musings of a Brighton Property Finder

The Times carried an article today about an accountant with 3 buy-to-let properties in Shoreham which he rented out through Scarlet Property Services.  Sadly for Scarlet and the accountant, the letting Agency ceased trading, taking deposits and rent with it.  Scarlet Property Services wasn’t registered with Arla, so the landlord has no claim against the agent, apart from a contractual claim under contract law, which would presumably leave him little in the way of change after he had paid a lawyer to represent him for the £3,000 owed.

The accountant also feels he has to repay the deposit to the tenants, as although the tenancy was registered under the Tenancy Deposit Scheme, the contract was between the tenants and the landlord, so the tenants have a claim against the Landlord.  Although the deposit is protected by the TDS, it is the landlord who has to pay if the Letting Agent can’t which seems a bit unfair, since due to government regulation, Landlords are now prevented from holding deposits!

As a company, most of our rental Clients are in London and at weekly rents which render the terms of the Housing Act 1988, obsolete.  Deposits we deal with in London typically start at £20,000 and the London office always insist that the tenancy is registered with the TDS and is subject to the terms of the Housing Act anyway and alert the tenant to the risks if the agent is not ARLA registered.  We also do a great deal of owner direct deals in London, in which case the deposit is either held in our Client account or in the Client Account of a reputable lawyer.

In Brighton however, few rentals are of values which render the Housing Act redundant, and although the market is still buoyant the example of Scarlet Property Services exemplifies the intensification of competition in the rental sector since rental income has become the main revenue stream for estate agents nationwide.  And as for the know-it-alls proclaiming that landlords shouldn’t use non-ARLA registered agents - it wasn’t long ago that one of the biggest London Agents, Foxtons, wasn’t registered and their future has looked increasingly precarious until very recently.

Ability to find a good tenant used to be the key criteria for finding a Letting Agency.  Buy-to-letters buying through this Brighton Property Finders Agency, will be strongly advised to check the ARLA thing too!

www.landlordzone.co.uk

Technorati Tags: ARLA, Brighton Property Finder, Buy-to-let, Tenant's deposits, the TDS, What happens when letting agents go bust

Tags: ARLA, Brighton Property Finder, Buy-to-let, Tenant's deposits, the TDS, What happens when letting agents go bust

Musings of a London Home Search Agent

The Times led this morning with the story that the government is considering introducing a £50 licencing fee for all buy-to-let landlords.  The proposal follows and independent review last year for the government, in which leader Julie Rudd, a research fellow into Housing Policy recommended a ‘light touch licencing system’.

Searching, as we are, for fabulous homes available for short lets in W11, W8 and W1 at present, this seems like yet another piece of red tape which will dissuade people from letting to us.  Since we work predominantly in the £3,000 a week plus bracket, we have top-notch Clients who expect breath-taking homes.  Frequently we are finding that the homes which really suit them are just developed properties which the developers had intended to sell but who let to our lovely tenants for a short time, to take a breather from the market.

We’ve also been known to approach Clients or contacts we know with suitable second homes in the capital, on the off-chance that they will be happy to let to named Clients.  So for us personally, this is just one more piece of red tape which will make our job on the lettings search side, more difficult.

The licence was conceived to protect tenants from unscrupulous landlords, given problems in some areas in the private sector such as over-crowding.  However well-intentioned I can’t imagine this is going to make much difference.  I’m sure I’m not the only impoverished graduate who signed up for a 3 bedroom flat with 2 mates and immediately sublet our lounge and TV room to other friends.  The kitchen was large enough to hold a ceilidh, so would have definitely made up for the lack of living space as from memory I think we would have all ended up paying about £60 a week in Pimlico, when all of us were paying £100 - £150 separately.

Unfortunately, the whole thing fell apart because the landlord suddenly realised what a goldmine he had, so renegued on the deal to refurbish and develop.

Anyway, I digress.  People with little disposable income will frequently put up with sharing with many people rather than pay more for personal space.  A friend’s Polish ex-lover springs instantly to mind.  When she met him, he shared his bedroom in a 3 bedroom house with 3 other people.  Presumably there could have been 12 housemates altogether, but he was happy as the rent split a dozen ways doesn’t add up to much.

However well-intentioned the planned licence is, it will hinder more than help.  And with the dearth of short-let supply in Holland Park, Notting Hill and St John’s Wood at the moment, it’s another thing this Home Search Agent could really do without.

Technorati Tags: Buy-to-let, buy-to-let licence, Home Search Agent, top end buy-to-let

Tags: Buy-to-let, buy-to-let licence, Home Search Agent, top end buy-to-let

Musings of a London Property Finder

A glut of property offered for rental has pushed rents down according to the Royal Institute of Chartered Surveyors, the RICS.  This rather unsurprising news is as a result of numerous frustrated vendors opting to rent instead.  Our clients have benefitted from professional developers need to retain cash-flow this year particularly in Q3 and Q4, renting some fabulous homes intended purely for the sales market. 

In the RICS Lettings Survey published today, London and the South East have been the hardest hit: not a shock since a significant part of corporate relocations were down in Q4 and after 9 months on the market in some cases, vendors opted to become reluctant landlords to help with mortgage repayments.  We have seen an upswing in these properties, particularly since the middle to end of October, as hopes for a sale started to fade for many vendors.  We will therefore expect the situation to worsen in Q4 which is great news for tenants.

It should be said that sometimes rents are frankly ridiculous.  We are frequently offered property with a rent 2 or 3 times the real market value, but as with sales it is usually possible to get the landlord to see sense eventually and also to throw in lots of extras to clinch the deal. 

It is also true to say that fortune favours the brave and it is still possible to pick up buy-to-lets with a yield of over 10% if you buy the right property in the right location at the right price, even with pessimistic rental expectations.   If you don’t know how to do that, call this London property Finder on 020 7923 7564.

Technorati Tags: Buy-to-let, Lettings, London Lettings, London Property Finder, Rentals, RICS

Tags: Buy-to-let, Lettings, London Lettings, London Property Finder, Rentals, RICS