| Hello and a warm welcome to our November newsletter.
At this time of year Halloween and Guy Fawkes Night come in quick succession and already the shops would have us believe it is Christmas!
However, the reality is that there are still over seven weeks until Christmas and in the fast moving lettings market, that is a long time. Certainly plenty of time to put a property on the market, find a tenant and get everything signed, sealed and delivered!
In this issue, we look at the new initiative at Lenwell Northampton with their innovative use of video marketing. We also flag the tax benefits to landlords of “going green”, the Government’s scheme to help tenants in situations where a landlord is under treat of repossession and the launch of The Property Ombudsman’s new essential guides to renting and letting.
Also in this issue Lucinda Newell reflects on the Government’s spending review announcement.
Northampton – Up Close and Personal
Landlord clients at Lenwell’s Northampton office are now benefiting from video presentation of their properties on the internet. Lenwell have been using video as part of their stringent inventory process for some time and are now utilising this important medium in helping secure quality tenants for landlord clients.
Property videos appear on You Tube which is now the second largest search engine in the world with a total of 2 billion views a day and over 24 hours of new video uploaded every minute.
Videos enable prospective tenants to make a more informed viewing choice and consequently we are seeing much less time wasted on abortive viewings and a quicker decision making process which benefits all parties through faster transactions.
Northampton is a large market town and local government district located approximately 67 miles from London and with a rapidly growing population of circa 200,000. With a documented history going back to Norman times the town benefits from excellent transport links and has a thriving university.
Northampton Saints are a top premiership rugby union club whilst Northampton Town football club currently play in League Two of the Football League. The football club whose nickname is The Cobblers, a reference to the town’s history of shoe manufacture, did however beat mighty Liverpool in September this year in the Carling Cup.
The Lenwell office in Northampton is located at 168 Wellingborough Road, Northampton and is managed by Alison Browne who says that landlords have been impressed with the new video service which she cites as further evidence of Lenwell living up to their recent Gold Award win in the Technology & Online category of The Times and Sunday Times Letting Agent of the Year Awards 2010.
Lenwell also won awards in the best customer service (Gold) and best small lettings agency (Silver) categories and the following testimonial received in September highlights why.
“From a base of managing my own portfolio, we considered using an agent to manage our properties. We embarked on a quick telephone snapshot of various agents to ascertain the right approach, professionalism and commercials.
Lenwells in Northampton have excelled in all areas of finding the right type of tenants, communications throughout the process with marketing updates, interested party numbers and ongoing tenant updates and queries managed quickly, effectively and with minimum time and effort on my part.
I have already recommended Lenwells to friends with properties and will continue to do so.”
Landlords missing out on the tax benefits of going green
Landlords are often missing out on tax allowance to make their properties more energy efficient.
The Landlords Energy Saving Allowance (LESA) can significantly reduce the amount of income tax a landlord pays, but not all landlords are aware it is available.
£1500 can be claimed every financial year by those who buy and install certain energy saving products to the properties they rent out.
Claiming LESA is relatively straightforward and is carried out when a landlord fills in their tax return. Individual landlords that pay income tax on profits from letting and corporate rental businesses paying corporation tax on profits from lettings can both apply.
Costs are claimed against taxable profits from renting out the property. When a landlord fills in their tax return they deduct the amount claimed for this allowance from their income, meaning they pay less tax.
Landlords can claim for expenditure on draught proofing, hot water insulation, loft insulation, cavity wall insulation and sold wall insulation.
Insulation is often something that landlords ignore but with greater awareness about this tax allowance, more are likely to take advantage. Tenants are also becoming more aware of the benefits of energy efficiency and asking questions when choosing a property to rent.
Insulating a property helps increase its long term value as well as making it more attractive to potential tenants. It can help make a property a more comfortable place to live in, which results in happier tenants and it can also reduce ongoing maintenance costs. Of course it will also improve the Energy Performance Certificate (EPC) rating of the property.
By making these improvements and becoming “greener”, a landlord will lower the property’s overall energy use, help the tenant save money and benefit the environment.
All energy efficiency installation work will need to be carried out by the end of March in order to claim it against LESA in the next tax year.
Protection for tenants if landlords default on mortgage loan
Tenants will no longer be kicked out of their home with no warning if their landlord defaults on their mortgage.
New rules have come into force giving judges the power to delay repossessions in order to give tenants time to find a new place to live.
People could previously be evicted from rental properties with little or no warning if their landlord had defaulted on their mortgage and had failed to inform their lender that they were renting out the property.
In some cases, tenants were not even aware of the situation until a court summons was received or bailiffs arrived, despite the fact that they had kept up with their rent.
But under the new rules, they will be able to attend court repossession hearings for the first time, while judges will also be able to take their situation into account and delay repossession by up to two months.
Lenders must also ensure tenants know that their home is going to be repossessed by sending a letter to the property giving them notice of a court hearing date.
Once a repossession order has been granted, the lender must send a second letter to the property telling tenants they have a warrant for its possession.
The tenant can then request a delay of up to two months if they have not previously had the opportunity to do so.
Housing minister Grant Shapps said: “Of course all landlords should get permission from their lender before renting out their home. But when landlords don’t, and they face the real prospect of repossession, their tenants should not be left worse off than any other tenant as a result.”
The changes have been introduced under a Private Members Bill brought by Dr Brian Iddon, Labour MP for Bolton South.
The Lucinda Newell Column
To be seen pottering along the highways and byways of Luton in her Mini Clubman, her trusted Scottie Malcolm at her side, our super sleuthing property rental expert Ms Lucinda Newell is on the case on your behalf!
October 20th 2010 will go down in history as the day on which the Coalition Government announced one of the toughest series of cost reduction measures designed to reduce the UK’s enormous deficit which is costing the tax payer £43 billion a year in interest payments alone!
Chancellor “Boy” George announced some £83bn of cuts over the next four years and left no-one untouched from a share of the remedial pain that we will have to endure.
Property fared rather poorly with the capital budget of the Communities and Local Government Department being cut by some 74% and overall spending in the department to be cut by 33%. Mr Osborne did announce that they planned to support the building of around 150,000 affordable homes over the next four years with an allocation of £4.6bn but having already introduced their “localism” view on planning, it is difficult to get too excited about whether this will actually be achieved. Of course the Government believes that its £900m New Homes Bonus will mean local authorities are encouraged to grant consents but this does seem like the left hand trying to balance what the right hand is doing to me!
Certain support measures were announced (such as £200m to keep the mortgage rescue scheme in place and reduce the risk of people being repossessed) but there was no encouragement towards a loosening up of lending and therefore one is left concluding that the Government is quite happy for the property market to see a period of stagnation or negative growth (that’s price falls to you and me) to slowly balance out supply and demand. In the short term this is likely to increase pressure on the private rental sector with demand far outstripping supply and rents rising.
As a landlord myself, one’s first reaction to the prospect of rising rents and improving yields is “good” but with some 490,000 public sector workers predicted to lose their livelihoods over the next four years, I think I shall actually be thinking long and hard about balancing short term rental gain with longer term stability and continuity of tenancy. Small gains in rental value can easily be lost when faced with tenants with rental payment difficulties or void periods.
There is no doubt that here is little good news to come out of the Spending Review except that the Government has taken some tough decisions to try and rectify the situation. Of course, their plans also depend on the economy growing and this means all of us having to “tighten our belts” and showing a little “Dunkirk and collective spirit”. I only hope that the more extreme leaders of some of our Unions don’t try and disrupt matters and knock us off the challenging path upon which we have embarked.
Come on Malcolm - Walkies!
I love to hear from my readers so let me know your thoughts - email me at firstname.lastname@example.org
The Property Ombudsman has recently launched two new guides for consumers on renting and letting. One aimed at landlords and one at tenants.
The two 'Essential Guides' are not intended to be definitive explanations of every aspect of the process as there are already publications to fulfill that role but rather they have been put together on the basis of issues that have given rise to complaints (whether supported or not) about estate and letting agents.
'I see what causes the most complaints when people fall out with sales and letting agents and quite often it can be over simple misunderstandings,' explains Christopher Hamer, The Property Ombudsman.
'Through these Guides I am trying to help consumers be better equipped for dealing with agents and to be aware of the specific things that they should look out for and where they should perhaps ask more questions of the agent so that they fully understand the service being offered.'
At Lenwell, we pride ourselves on our jargon free approach and our staff will always be only too happy to take the time to explain any aspect of letting and renting.
The series of Essential Guides are available free to download from The Property Ombudsman website at www.tpos.co.uk