http://mediazone.brighttalk.com/comm/landg/4f3a617317-27298-3496-29937

A positive outlook for rental income and yields has also been reported in the latest Private Rented Sector Trends report from Paragon.

The report, which covers the second quarter of 2011, showed almost a quarter (23%) of landlords feel more optimistic about the prospects for their portfolios.

For the first time in two years, landlords have predicted that they will increase their portfolios in the next year.

On average, landlords expect to have 13.1 residential properties in their portfolios in a year’s time, compared to 12.6 properties currently.

Elsewhere within the report, rental income appears to be in rude health, with three out of ten landlords (29%) having increased their income during the second quarter, with the majority enjoying a rise of between 2% and 4%.

Landlords are also more optimistic about the net value of their portfolios, with a growing proportion expecting an increase in value, and fewer forecasting declining values.

Yields were found to remain unchanged at an average of 6.2%, while an improvement in the perception of the availability of buy-to-let mortgage finance was also reported.

According to the latest Moneyfacts.co.uk research, 502 buy-to-let mortgages are currently available on the market, significantly higher than the 272 that were available in August last year.

“Our report emphasises the fact that there is significantly more optimism amongst landlords in the private rented sector and the buy-to-let market, and that looks likely to increase during the coming quarters,” said Nigel Terrington, Paragon Group chief executive.

“Landlords are still experiencing high levels of tenant demand which is set to rise further in the coming quarters.

“It is encouraging to see yields remaining at a healthy level, low void periods and general confidence across the sector.”

Important advice for consumers who have flues which run in ceiling spaces

Some properties, mainly flats and apartments, have been built with boiler flues which cannot be inspected because they are hidden behind walls or ceilings. The boiler flues that this information relates to are connected to room-sealed fan assisted boilers.  If you live in one of these homes then please read on for more information so you know what to do.

Gas Safe registered engineers need to be able to see the flue − which take fumes away from the boiler − as part of essential safety checks whenever the boiler is worked on. A flue in poor condition, combined with a boiler that is not working properly, could put you and your family in danger from carbon monoxide poisoning, which can cause death or serious injury.

If your boiler is situated on an outside wall, it is unlikely you have this type of flue. Alternatively, if your engineer can see all of the flue, you will not need to take any further action in relation to this matter.

If you do have a boiler where all, or part of, the flue cannot be seen, you, or your landlord, will need to arrange for inspection hatches to be fitted. This does not mean that your flue system is suddenly unsafe. As long as the boiler passes a series of safety checks − including having audible carbon monoxide alarms fitted − it can be used normally for the time being.

Carbon monoxide alarms are not an alternative to being able to see the flue and you will still need to have inspection hatches fitted. You have until 31 December 2012 for this work to be completed. It is recommended that inspection hatches are fitted as soon as you are able to do so. From 1 January 2013, any Gas Safe registered  engineer will turn the boiler off and formally advise you not to use it  until inspection hatches have been fitted in appropriate places

Although most of the affected boiler and flue systems are relatively new (installed since 2000), the risk of faults leading to the release of carbon monoxide increases as the system gets older, especially if it is not serviced regularly. It is important that you have your gas appliances serviced annually.

You need to take action now

If your property is less than two years old then contact your builder. If your property is between two and ten years old contact your home warranty provider, as you may be covered by them if there are defects in the flue. A list of the main home warranty providers is shown below. If your property is 10 years or older you should contact a Gas Safe registered engineer.

If you are a tenant, it is the responsibility of your landlord to ensure that inspection hatches are installed and that the boiler and flue are checked every year.

If you have any questions please see the list of Frequently Asked Questions. If you have a specific enquiry e.g. around building warranties please direct it one of the groups listed below.

For any additional enquiries not answered through these routes please send questions to: fluesinvoids@gassaferegister.co.uk  and it will be dealt with by a member of the group
To find a Gas Safe registered engineer in your area:

• Call: 0800 408 5500
• Visit: Find a registered business

List of main home warranty providers

• NHBC (National House Building Council)  
  0844 633 1000
  www.nhbc.co.uk
• Premier Guarantee  
  08444 120 888
  www.premierguarantee.co.uk
• Zurich Building Guarantee  
  01252 387 535
  www.zurich.co.uk

This advice has been developed by the Flues in Voids cross-industry team. It is made up of representatives of Gas Safe Register, house builders, home warranty providers, registered gas engineers, appliance manufacturers (including HHIC) and others and assisted by HSE, to provide clear communication to industry and consumers around the issue of flues being located in voids which do not allow inspection.

Momentum for further rises continues as demand for high quality rental accommodation continues to grow. Would be first time buyers are beginning to accept the realisation that under the current lending criteria, laid down by the banks, it may take many years of saving before they are able to raise a deposit sufficient for the needs of a prospective mortgagee.

A move to a more continental approach to property seems increasingly likely with the average age of a first time buyer now in their late 30’s. Young people are choosing to rent homes as this gives them the flexibility they need in a tough employment market where mobility may be key to advancing a career.

The primary reason we’re destined to stay a nation of renters is that promises to unlock the mortgage market and build more homes have been broken. The sales market is being choked off at both ends and a combination of throttled lending and fractured supply means prices are kept high and people can’t borrow enough.

Rents have been creeping upwards, month in, month out for the last year, with the average rent now standing at £700 per month. Restricted mortgage finance is choking off the number of first-timers able to get on the ladder. Landlords’ ability to buy investment properties is further hampered by the unrealistic lending terms offered by the banks. With rising demand outpacing the increase in supply, rents can only go one way.

This is great news if you have already established a portfolio, but for those Landlords looking to build on an existing portfolio or maybe looking to become a Landlord for the first time, securing appropriate finance will seemingly remain the biggest hoop for them to leap through.

Glenn Wright

MRL Ashford

With many potential first-time ­buyers unable to get on the housing ladder, demand for rented properties is high.

So would-be landlords with plenty of capital have the chance to snap up a bargain.

Potential landlords need to understand the risks.

The last ­housing boom saw more than a million ­people become landlords as they sought to cash in on rising prices. Many lost substantial sums when house prices slumped. However we have seen prices stabilise over the past 6 months and demand for well presented and well located property is currently high.

Landlords today focus on the ­regular income they receive from their property rather than the gains of house price rises.

Glenn Wright, of Kent based Martins Residential Lettings (MRL), says: ‘This will be a good year to become a ­landlord. However, with local ­variations on house prices you must choose property carefully.

‘It’s important to talk to ­letting agents about the area and what types of property ­tenants want.’

Rental income ­averaged about 4 or 5% of the property’s value last year, according to the National Landlords Association.

On a £125,000 property the landlord could expect to get about £6,000 to £7,200 a year in rent. Profits, after expenses, are taxable.

If you want to become a buy-to-let landlord, you will need a good deposit. However, competition in the buy-to-let mortgage market has improved recently, with several banks reducing rates and fees and the Kensington recently announcing an 85% LTV.

Gus De Rosa, of broker Independent Mortgage Centre, says: ‘Lenders want to ensure your rental income covers 125% of the mortgage interest payments. There are many other costs to factor in aside from the mortgage such as maintenance, letting agent fees, safety tests and energy performance ­certificates.

Renting property is increasingly becoming a lifestyle option for many young people unable to get on the property ladder and as we move increasingly to a more European approach to housing the opportunities for landlords will seemingly only improve.

According to the Council of Mortgage Lenders (CML), at the end of June, there were 1.26 million buy-to-let mortgages outstanding which are worth £149 billion and now account for 12% of all mortgages.

The figures show that both buy-to-let loan numbers and values reached their highest level since the fourth quarter of 2008.

Commenting on the news MRL’s Glenn Wright said:

“The  demand for high quality rented accommodation continues to rise with a ratio of tenants to property currently running at 4-1. The private rented sector is an integral part of the housing supply chain and with the slow down in the number of new homes coming to the market place this situation will continue to grow.

“It’s important that more landlords invest in the sector to help sustain the balance between the supply and demand of lettings stock. Rents continue to rise and letting a home is increasingly becoming a lifestyle choice as would be first time buyers struggle to raise the significant deposits required by lenders in order to secure an offer of  a mortgage”.

If we are to keep pace with the current demand for rented accommodation finance for private landlords, whether institutional or individual, is crucial and although funding conditions for lenders remain tight we have recently seen new lenders moving into this sector of the market.

The news looks good for would be landlords with higher rents, lots of demand and more favourable lending terms. Good news seems to be scarce these days so we should make the most of it when it comes!

Momentum for further rises continues as demand for high quality rental accommodation continues to grow. Would be first time buyers are beginning to accept the realisation that under the current lending criteria, laid down by the banks, it may take many years of saving before they are able to raise a deposit sufficient for the needs of a prospective mortgagee.

A move to a more continental approach to property seems increasingly likely with the average age of a first time buyer now in their late 30’s. Young people are choosing to rent homes as this gives them the flexibility they need in a tough employment market where mobility may be key to advancing a career.

The primary reason we’re destined to stay a nation of renters is that promises to unlock the mortgage market and build more homes have been broken. The sales market is being choked off at both ends and a combination of throttled lending and fractured supply means prices are kept high and people can’t borrow enough.

Rents have been creeping upwards, month in, month out for the last year, with the average rent now standing at £700 per month. Restricted mortgage finance is choking off the number of first-timers able to get on the ladder. Landlords’ ability to buy investment properties is further hampered by the unrealistic lending terms offered by the banks. With rising demand outpacing the increase in supply, rents can only go one way.

This is great news if you have already established a portfolio, but for those Landlords looking to build on an existing portfolio or maybe looking to become a Landlord for the first time, securing appropriate finance will seemingly remain the biggest hoop for them to leap through.

Glenn Wright

MRL Ashford

Hunt v Hussain

Mr and Mrs Hussain were husband and wife.  Mr Hussain was a freehold owner of premises and in May 2003, Mrs Hussain granted an assured shorthold tenancy to Mr Hunt a weekly rent of £90.  Shortly after the tenancy commenced, Mr Hunt lost his job and applied for housing benefit.  Mrs Hussain told Mr Hunt he had to leave.

Epsom and Ewell’s Environmental Health Department wrote in response to Mrs Hussain’s comments, warning her that she required a Court Order to evict Mr Hunt.  Despite this, Mr and Mrs Hussain proceeded to change the locks and refused to re-admit the tenant.

Mr Hunt suffered street homelessness for three months before securing alternative accommodation.  He stayed with friends on occasions but for most of the time he slept in a broken-down car or slept where he could in his sleeping bag. 

Aged 45, Mr Hunt suffered from bronchial asthma which worsened by living rough.  He developed depression and feelings of self-harm.  Some four years after the eviction, a psychiatrist determined that he was suffering from severe depression, agoraphobia and paranoid ideation.  In addition, it was difficult to predict whether he would become fit to work in the future. 

Experts concluded that the trauma of the eviction on someone with Mr Hunt’s background and personality had generated this radical deterioration in his mental health. 

The local authority prosecuted Mrs Hussain under Protection from Eviction Act 1977, Section 1.  She was fined £300 and ordered to pay costs of £250.  In civil proceedings in the County court, Judgment in default was entered against Mr and Mrs Hussain.

His Honour Judge Reid QC awarded damages totalling £56,678 as follows:

• The eviction – damages assessed at £120 per day over a period of 65 days.  The Judge was not willing to assess damages over the full period of 76 days that Mr Hunt was homeless on the ground that Mr and Mrs Hussain could had lawfully determined the tenancy by serving a Housing Act 1988 Section 21 Notice.
• Damages for personal injury assessed at £45,000.  The Judge was satisfied that Mr Hunt’s suffering fell into the most severe category of psychiatric damage, for which the guideline was between £35,000 and £74,000.  It was considered apparent that Mr Hunt was particularly vulnerable as a result of his unsettled background and the Judge was satisfied that he had a predisposition to mental health problems. .  Therefore, damages were therefore not assessed at the top end of the scale.
• Special damages were awarded in the sum of £100. 
• Interest of £3,453.
• The Judge granted a freezing injunction restraining Mr Hussain from dealing with the two properties in which he still retained a beneficial interest.

Ian Larkins
Solicitor Property Litigation team
Weightmans LLP
ian.larkins@weightmans.com

The key findings are:
· Investor confidence will be bolstered by the stabilisation of house prices
· Demand for rental property amongst tenants is rising faster than supply
· Rents are starting to stabilise
· Since the start of 2009, a greater proportion of landlords have bought rather than sold property
· Just two lenders currently account for 80 per cent of buy-to-let lending
· Arrears and possessions have been no higher in the buy-to-let sector than in the market as a whole
· Supply of mortgage finance will be unable to satisfy investor demand

The report forecasts that gross advances will remain flat this year, rising to £15.8 billion in 2012, £20.2 billion in 2013 and £25.6 billion in 2014. Council of Mortgage Lenders figures show that buy-to-let gross advances totalled £8.5 billion in 2009.

Nigel Terrington, (pictured) chief executive of The Paragon Group, comments on the report, “Buy-to-let lending hit its lowest level since 2001 last year and the market is dominated by just two lenders. Investor demand has never been the issue, it has always been mortgage finance supply, which has been severely restricted since the closure of the wholesale funding markets.

“There are a number of socio-economic and demographic factors that will drive demand for rented property in the future, such as inward migration, the rate of new household formation and the composition of those households, growing student numbers and a greater propensity to rent amongst young people. The private rented sector needs to expand to cater for these growing markets, yet it is being inhibited by the lack of available finance.”