Month: May 2022

The Renters’ Reform Bill was first proposed in April 2019 by Theresa May’s government in a bid to remove some of the insecurities tenants experience while renting in England. The main premise of the bill is the abolishment of section 21 evictions, also known as “no fault” evictions.

 

Under the 1988 Housing Act, section 21 allows landlords to evict tenants without having to demonstrate any fault, providing they give two months’ notice. Theresa May criticised section 21 evictions, stating that millions of “responsible tenants” could wrongfully be uprooted with little notice, and announced The Renters’ Reform Bill to give more security and power to tenants. The bill would also help to improve the standards of rented accommodation through a Decent Homes standard and the introduction of a national landlord register. However, it’s been almost three years since the announcement, and the bill still hasn’t come into effect leaving many tenants in the same unstable situation.

 

Nevertheless, ministers did recently confirm that a whitepaper surrounding the bill is to be released later this year around May. Eddie Hughes, the housing minister supported the news, telling the House of Commons that the “reforms will deliver a fairer, more effective rental market”.

 

Before the Covid-19 pandemic, the leading drive for homelessness in the UK was due to the loss of a tenancy. During the pandemic, the government stepped in, banning evictions to prevent more people from losing their homes.

Earlier in January this year, the UK Government announced tough new restrictions against second homeowners to combat a tax loophole. These new restrictions follow increasing reports of second homeowners pretending to let out their properties to holidaymakers to deduce the amount of tax they must pay, in spite of their properties actually being empty.

At present, owners of second homes in England can avoid paying council tax and access small business rates relief by simply stating an intention to let the property out to holidaymakers and were not permitted to provide any evidence. However, The Department for Levelling Up, Housing and Communities (DLUHC) is moving to close this loophole in the system.

From April 2023, owners will have to prove their homes were being rented out for a minimum of 70 days the previous year to access small business rates relief, where they meet the criteria. Owners will also have to have evidence of their property being available for rent for 140 days that year, and in the following year to come. Evidence such as websites, brochures and advertorial content used to promote the rental property, as well as letting details and receipts will need to be provided to qualify for the relief.

You can find out more about how these changes will impact second homeowners on the GOV website.

If you’ve had success in renting out a buy-to-let property you may be considering growing your property portfolio. If you are thinking about expanding your business, we’ve put together a few things you’ll want to consider before buying your next property.

Have you done enough research?

The first thing you’ll need to successfully grow your property empire is an understanding of the market and a way to assess how the market is going. There are numerous factors that can affect the state of the property market, which is why laws, taxes, inflations rates, mortgages and interest rates constantly change. Before making the jump into buying your next property you’ll want to calculate whether it’s financially worth it, and whether the property you have chosen has the potential to make a high ROI. An accountant will be able to assist you, but you’ll also want to liaise with a company which specialises in property and asset management, as they’ll have the expertise and resources to maximise your investment.

 

Are you going to diversify or monopolise?

When thinking about the next property to add to your buy-to-let portfolio you’re going want to ask yourself whether you want to specialise in one specific market or location, or if you want to completely diversify your portfolio and go for something different. There are benefits in both diversifying and monopolising. For example, diversifying your portfolio can enable you to reach untapped markets, and can be seen as attractive by investors. However, you may want to stick at what you know, and are comfortable with, specialising in a specific property type or region.

 

Would it make sense to partner with someone else?

Getting a business partner may help to speed up the growth of your property portfolio. You may want a business partner who acts as investment partner to help you raise the capital you need. Alternatively, you may want to go into business with someone who can help you maintain and manage the property, such as a tradesman or property management company.

 

Do you need a lettings agent?

Lettings agents will specialise in getting buy-to-let properties tenants. You may want to consider having specialists handle your property portfolio in order save you time and maximise your return on investment.

If you’re looking for a lettings agent or a reputable company to help you manage and grow your property portfolio, then get in touch. We have a highly skilled lettings department who have brought in millions of pounds of rental income for landlords across prime London for over seven years.

Over the last year, online searches for properties in London have soared, while the search for properties in the country have fallen. This was recently documented in a report by City Hall, who suggest there’s been a “boomerang” return to the capital. This change comes after returns to the city had continued to drop for over 30 years.

City Hall’s report suggests that the “boomerang” effect has partially been a result of young adults who had left the capital during the 2020 lockdown having lost their jobs, returning to the city following looser/no restrictions on hospitality and leisure sectors.

This influx of young adults in London has sparked an increase in the volume of searches for terms “rooms to rent in London” – up by 98% on 2021, and “shared ownership London”, which also up by 48%.

According to insights by MediaVision, this trend in the capital is not mirrored in the countryside, with searches for “houses for sale in Cornwall” being down 46 per cent and “houses for sale in Devon” down by 37 per cent.

During the beginning of the pandemic, London’s rent and property prices fell as residents moved out. The “race for space” and the implementation of remote working meant people began to flock elsewhere seeking a different environment during lockdown restrictions. However, this began to change once the government relaxed COVID-19 restrictions, while offices began to re-open. This naturally resulted in people began returning to the country.

However, with inflation and rising living costs, it would be difficult to predict how long this trend will remain the same.

To discover property and housing related news, check out our other blogs and articles: phillipsharrod.com/news-and-views

A rental property is an ideal investment to help you supplement your income or create a full-time living. However, property managers and landlords may struggle to find how to increase their revenue. Luckily, there are many ways to improve your return on investment. We’ve summarised five ways below.

 

 

1. Don’t skimp on renovations

 

 

The way in which you furnish and decorate a property can have a huge impact on its rental value. Ensuring that paint is refreshed, floors are updated, and the space is modern may be all you need to maximise profits.

 

2. Offer additional services

 

You can maximise your profits by creating additional revenue streams through offering extra services to tenants. This could include a cleaning services or item replenishment. This will provide you with new revenue opportunities, whilst also servicing the needs of your tenants.

 

3. Implement a green strategy

 

An effective and environmentally friendly way to increase the ROI of your rental property is to implement a strategy that will reduce electricity and water bills. Switching to an eco-friendly strategy may include switching to LED light bulbs or installing energy efficient appliances. Not only are you helping to save money, but you are also showing that you are an eco-conscious business.

 

4. Advertise a home office

 

The pandemic has changed the way in which many people work, with more companies offering remote, or hybrid modes of working. This means more people are seeking home offices or rooms that can be used as office space. If you have a spare room that could also function as a home office make sure to include this in your listing.

 

5. Hire a property management firm

 

Hiring a property management firm/property manager can be one of the best decisions you make to maximise your returns on your property. A property manager’s job is to increase your rental property ROI, and will handle operational tasks, repairs, landscaping, perform tenants’ screenings and more. This allows you to reap the benefits of your investment without the stress of managing and maintaining everything yourself.

 

At Phillips Harrod, we are one of prime London’s leading residential experts who offer property management services. We appreciate that as an investor you want to maximise the profits of your investment, and we work hard to nurture high returns using a team of highly qualified experts.

A new set of rules governing property sales listing and advertisements in the UK will be rolled out from the end of May this year. Brought about by the National Trading Standards Estate and Letting Agency Team, the changes will make it compulsory for all property sales listings to include a set of details to increase transparency amongst buyers.

 

The council tax band/rate for a property, as well as the house price and tenure information are a few examples of the material information property listings will have to include. Portals such as Zoopla and Rightmove will be adding these fields to comply with the new rules, over the next few weeks.

 

This is only part one of three phases of information disclosure, which will eventually include additional material information, such as restrictive covenants and flood risk information – which usually isn’t made available to buyers until further down the line.

 

Part a includes in “information that, regardless of outcome, is always considered material for all properties regardless of location. This information generally involves unavoidable costs that will be incurred by the occupier regardless of the use of the property,” such as leasehold and freehold status.

 

The second phase, part b will apply to all properties, including things like utilities, as well as non-standard features. The last phase, part c will include information that may or may not need to be established. Clearer guidelines are set to be released, as the rollout is implemented.

 

It is thought that these measures ccan help to improve property sales, by providing useful information that could better inform a prospective buyer’s decision when they embark on their property search. This could save time for both buyers and agents in the long run, leading to fewer complaints and faster transactions.

Buying an investment property comes with an added responsibility to the Landlord to maintain, manage and monetise. This requires a lot of effort, time and expertise which is why many Landlords engage a third party to help manage the investment. When seeking help with their property portfolio there are two types of services which a landlord may require – asset management and/or property management. If you’re a new Landlord or have a growing portfolio, you’ll need to know the difference between the two services.

Asset management refers to the process of maximising the value and return on investment of a property. This includes sourcing the highest and most consistent sources of revenue, minimising expenditure, and risk management. Asset managers are responsible for the general strategy of the asset and can also advise investors/Landlords on ways to grow their portfolio and suggest alternative profitable ventures.

On the other hand, property management refers to the overseeing of daily operations of the property on behalf of the owner. Alongside working closely with the property owner, a property management firm will also need to work closely with the tenants, acting as a representative of the Landlord. They will be the tenant’s first port of call, dealing with any noise complaints, maintenance and repairs, and any legal issues.

Landlords may seek to hire property management firms for various reasons, including if they don’t have the expertise or time to maintain rental properties, or deal with tenants directly. This is especially true for landlords who have multiple rental properties in their portfolio.

Although asset management and property management are two different services, it’s not uncommon for Landlords to seek both. Phillips Harrod are residential experts in London’s prime real estate who offer a multitude of services, including both asset and property management. To find out more about how Phillips Harrod can help you manage your portfolio, get in touch.