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Landlords- Rent increase? What’s right?
Posted: June 20, 2014

Landlords- Rent increase? What’s right?


With tenants residing in your property for a certain amount of time, you may be thinking about increasing their rental amount, and may be wondering what the best course of action is.


If you have a fixed term contract- and therefore it is running for a set period of time, for example 6 or 12 months, then you cannot increase the rent during the term unless the AST specifies that you can with a clear rent review clause. It is usually when the contract is 2 months from expiring that you should notify your tenants of your proposed new rental figure (in written form) and then when agreed they would sign a new lease. It is best to check online the current prices that similar properties to yours are being advertised for and also take into consideration market forces such as supply and demand in the local area. If you were searching for new tenants at the new price, do you think your property would be snapped up or would it left to become dusty on the available properties shelf?
Verifying that the market rate supports your new rental figure is usually the best way to have your tenants agree and accept that that is what they should be paying, and therefore looking around will only justify that their move in the area will be pointless and costly.


Conversely what happens if you have long-term tenants and you work out that they are paying quite considerably below the market rate? Say 15- 30% less? Some landlords do indeed worry that when they have good solid hassle-free tenants in their property that raising the rent will be like poking a bear when sleeping and incline them to kick up a fuss, relationships can deteriorate and they even vacate. Openly communicating with your tenants about the proposed rental increase and perhaps compromising that the following year they would not have their rent put up, treats them more as investors rather than people at your disposal.

Here are some factors to consider when increasing the rent-

  • The increase must be fair and realistic- consider that also a huge jump in the rental amount may be too much for people to stomach and therefore they will vacate.

  • Tenants who will leave a property due to this and feeling that the increase is unfair, may also mean a void period in between tenancies. Therefore losing say a month’s rental income may work out to be more or less the same rent over the course of the year that you were already receiving.

  • Replacing a tenant may also incur the cost of employing an estate agent who will usually charge between 5-10% of the annual rent.

  • Putting the property on the market may also mean that you will have to fork out for repairs, new units, carpets and a fresh lick of paint in order for the property to stand out against the competition in the area. Money and time will therefore need to be spared and invested.



  • If the fixed term contract with your tenant had expired and no new one had been signed but they continue to rent the property, then they are automatically on a periodic tenancy under the same terms and conditions as before (section 5 of the Housing Act 1988). It therefore rolls on a week to week or month to month basis. You would still look to only increase the rent once a year, with your tenant’s agreement and have this new rental figure agreed in writing as evidence, signed and dated (rent increase agreement). If you cannot agree then you may serve a section 13 notice as the next step, which officially provides people the notice that this is happening and they must comply. Failing that and no sign of compromise/negotiations you may be forced to serve section 21 notice of possession, which allows you to gain possession of the property after the fixed term has expired. Of course this is the most undesired outcome. Most landlords find it easier to enforce a gradual annual increase and linking it with the current rate of inflation, or Retail Price Index (RPI). This is usually the best compromise with tenants and it doesn’t rock the boat with the current set-up.


    By Natalie Elms. Senior Sales & Lettings Negotiator at Property People. Estate agents in Wimbledon Park


    Tags: letting a property, renting a property, rent increase, reasonable rent increase, landlords tips on rent increase, rent increase guide, higher rent, tenancy renewals, estate agents in south west London, Estate agents in Wimbledon Park, estate agents in southfields, lettings agent in Wimbledon, reliable letting agent, rent negotiating, contract renewals

    HMO’s- The history and present day
    Posted: June 16, 2014

    HMO’s- The history and present day

    The Regional Housing Authority in all areas is the 'Council' and it has the obligation of enforcing the terms of the Act introduced for 'Housing' in 2004 as well as the affiliated rules and regulations in order to maintain some disciplined code and principle in HMOs, which are known as Houses in Multiple Occupation. Property owners quite often question the reason why Local authorities were concerned about governing the rules and regulations in leased property . The answer is linked with the historic past of the health of the people, considering that sub standard housing became an initial catalyst for change that led to the birth of the very first regional authorities as well as the first hygiene inspectors.

    Within the last millennium HMOs offered the working classes with standard homes or property which were affordable. Usually a single family occupied a single room, kitchen and restrooms were shared with neighbouring families. The revolution in the field of technology and industries made an enormous impact on the way the employees lived, so when the revolution reached its peak, men and women from different parts of the world looked to seek out employment in the city and were usually crammed into already overloaded housing. It was usual for family and individuals to have a common restroom outside the house and a common supply of water. Poor housing was recognized as an origin of the disease and eventually national and local people in politics were looking to enact laws to make residences safer and much more healthy and balanced. An unfit workforce did not boost production levels.

    Many efforts were followed by various government authorities to enact laws and regulations for houses, making them more secure and much more healthy. At times these were unsuccessful simply because of regional political infighting. However, the major trouble seemed to be the inadequate number of houses compared to the general population and clearly the need for inexpensive rooms were high. The construction of sewers as well as offering healthy supplies of water was the initial contribution of these fresh public bodies executed.

    In the year 1919, Health Ministry released the very first guide book on Unsuitable Houses. And when WWII ended, there surfaced a new mindset about how exactly Britain should really be rebuilt, right after so much damage. Men and women wished for good houses that could take over the tenement housing which endured earlier. In 57's they introduced a fresh Housing Act, that defines a benchmark criteria or threshold of health and fitness and this defines that every non-commercial belongings (occupied by the landlord and leased property) must be evaluated whether or not it was in good shape for our habitation. This minimal threshold for general public wellness was the standard for present-day houses with appropriate water supply, drainage facility, enough daylight and airflow, appropriate amenities, smartly designed rooms as well as staircases that one could ascend without risking an accident! This benchmark supported effectively to enhance housing for almost 5 decades. Setting up rules likewise enhanced the caliber of each new home built.

    Outdated 'health criteria' has already been replaced in the year 2004 with a method of threat evaluation, which correlates the problems the tenant can face because of the defects. Relating your housing circumstances to your well-being and health has prioritized frequent issues such as poor heating as well as leakage in the walls. This procedure allows families and individuals, to live in a risk-free, healthy and balanced housing environment.

    From the first HMOs to the present day, the population are worried about the simple fundamentals - the general condition and maintenance, the amenities, commonly shared kitchens as well as restrooms, the administration of common places, fire safety, as well as how the property owner maintains the property.

    The way The Local authority or council Inspects as well as Prioritizes HMOs work:
    Council keeps a repository of houses which are used in a number of occupations. All properties are evaluated for threats based on the standard set of guidelines, listed below, that are proven to enhance the possibility that the HMO is not feasible for human habitation. Listed below are the most important protection as well as human wellness affairs within modern-day:

  • Gas safety

  • Fire safety

  • Repairs

  • Electrical safety

  • Amenity provision

  • HMO Licensing

  • Management


  • Dimensions as well as design
    - HMOs of three or higher storeys will probably have a greater fire threat than single storeys.

    Administration
    - decent management as well as standard examining and maintaining the hygiene of shared places makes certain that problems are minimized.

    No. of tenants
    - If the no. of people to occupy houses are more, then there are chances that they will have to face difficulties, for instance overcrowding as well as strain on shared amenities.

    Amenities
    - inadequate restrooms, WCs as well as kitchen areas or not repairing of amenities could cause tension and cause them to fall sick.

    Repairing
    - a property with bad maintenance will certainly degrade more quickly with the overuse of HMOs

    As soon as all these classes are evaluated on the scale of how risky it is followed by a rating, the team put together a thorough inspection process - worst first - in order to deal with HMO which are suspected or which are known in advance in bad condition.

    Following evaluation, the Local authority or council has a variety of options. The initial step, nonetheless, is to perform a housing risk evaluation named HHSRS. This informs people, whether the defects can cause harm or not. In cases where category 1 risks are found out, the Local Housing Authority has the responsibility to take some action to treat those threats, for example making use of Prohibitive Notices or Renovation Notices. The Local authority works along with property owners in order to enhance their properties in the most convenient way to ensure they're following the agreement but still support the fundamental HMOs elements. The Council does not have any intent to enforce unwanted enhancements on the housing sector or shift an urban community towards wealthier residents or to make an increase in property values.
    The Local Housing Authority Guideline provides property owners as well as renters all the details they require on the minimal threshold or the benchmark criteria for housing standards for all types of properties.

    Here at Property People we have been dealing with HMOs for many years. We have a few properties on our books which are HMOs and are based in London Boroughs of Wandsworth and Merton. This has given us first hand experience in dealing with HMOs in line with the government legislation. We will be more than happy to discuss how we can manage an HMO for you. If you are thinking of increasing or boosting your rental income by letting out your property as HMO, please get in touch by calling our office on 020 8946 7171 or emailing us on info@property-people.co.uk.

    By Natalie Elms. Senior Sales & Lettings Negotiator at Property People. Estate agents in Wimbledon Park


    Tags: HMO, house under multiple occupation, hmo legislation, hmo rules & regulations, hmo requirements, hmo safety regulations, hmo license, hmo dos and don’t’s, hmo landlord guide, hmo guide, hmo maintenance, hmo properties, letting agents that deal with hmo, hmo in wandsworth borough, hmo in merton borough, letting a property as an hmo, estate agents in south west London, Estate agents in Wimbledon Park, estate agents in southfields, lettings agent in Wimbledon, reliable letting agent, property negotiating

    Fixtures & Fittings- What are the rules?
    Posted: June 16, 2014

    Fixtures & Fittings- What are the rules?

    Having worked in lettings for a number of years, I was quite surprised by a landlord’s response after receiving an offer on his 2 bed property. The property was unfurnished, which for a rental property means that all the ‘fittings’ remain however beds, sofas, wardrobes etc would need to be provided by the tenants. Therefore his question on how much the tenants were offering for the large American style fridge, the dishwasher and the washing machine did indeed produce a wide-eyed moment from me. He did not want to be accountable for any problems that may arise with these goods, and fork out on a repair bill so was going to remove these appliances altogether and put into a paid storage unit?! Conversely, this is actually a grey area, as it is the common assumption that if these goods are provided then automatically it is the landlord’s duty to repair and maintain. However if the landlords or agents Assured Shorthold Tenancy Agreement (AST) states that they are responsible and the items are listed in the inventory then this is certainly the case. It is true that the landlord could also have removed these items from the kitchen, however our job of finding tenants in an already competitive market without these “basic amenities,” I think would have proved almost impossible.

    However within a sales transaction of a property this behaviour is of course expected. Unless the fixtures and fittings have been negotiated prior to the purchase, then buyers have indeed received the keys to their new home and found an unexpected empty shell with bare wires bristling in all rooms, carpets ripped up and even doorknobs removed. Peering into the garden may also make one recoil in shock as the lawn and shed have been removed, and even the pretty roses have been dug out and carted off out of there. Whereas this is not necessarily wrong and illegal, it can be a nasty surprise if assumptions were made that certain things would be remaining and nothing formally put down on paper. Or even when the list of included fittings and fittings is revealed quite far down the sale transaction line, then this can result in the buyer reducing their offer. It is best for the vendor to remember that when purchasing a home, people’s budgets can be squeezed to the max. Throwing up unexpected fittings that will be removed can make the buyer have a heart attack about another cost. Therefore it is wise for a vendor to present to their agents and potential interested parties an informal inventory of what is included, and also things that you will leave behind but at a cost. Fixtures are standardly defined as things that are bolted to the walls and floor, including radiators, boilers, built-in wardrobes, light fittings, kitchen units, and bathroom suites. Fittings on the other hand are free-standing units, such as fridge/freezers, furniture, TV dishes etc. If something is removed that had been agreed upon, then the vendor can face small claims proceedings on their hands.

    On the flipside of this problem is that some buyers have been left with the previous owners belongings and junk that they have had to take care of. There can also be a further cost for removing and disposing of these items. Vendors should certainly not be negligent with this either, as they will face the removal bills having broken their contract with the buyer for not providing a property vacant and ready for possession. If the vendor needs more time to remove their belongings than originally agreed they must consult their solicitor in order to negotiate this with the other party.

    By Natalie Elms. Senior Sales & Lettings Negotiator at Property People. Estate agents in Wimbledon Park


    Tags: selling a property, furnished vs unfunished, conducting viewings, furnished vs unfurnished, seller’s guide to what buyers want, buyer guide, seller guide, fixtures and fittings, estate agents in south west London, Estate agents in Wimbledon Park, estate agents in southfields, lettings agent in Wimbledon, reliable letting agent, property negotiating, should I sell my property fully furnished?

    Buyers Tastes - 10 Things a Seller Needs to Know
    Posted: June 12, 2014

    Buyers Tastes - 10 Things a Seller Needs to Know

    1. Coffee and Croissants? Yes please.


    The smell that hits you when you walk through the door of a prospective property can add to that all important first impression. An instantly inviting and comforting smell of baking bread, fresh coffee or flowers can provide people that sense of homeliness and the lifestyle they desire. However odors of wet dog, cigarettes and rubbish will certainly have them recoiling back out of the door. Self-respecting vendors should take heed that these little touches can go a long way.

    2. Shower/ Bath

    Recently a GoCompare survey recorded 61% of likely buyers choose to shower than to have a bath. Whenever you are sprucing up that bathroom of yours before a sale, consider mixer bathtaps/shower. A shower over bath is the perfect solution instead of attempting to make a four piece suite in a small space. Also it won’t rule out the all-important family buyers who would turn their noses up in a bathroom only containing a lonely shower unit.

    3. Garden or Garage, garden or garage…

    The same survey revealed that about 68% of prospective buyers confirm they will like a garden rather than a garage. Most people use their garage as storage facilities these days, or even converting them into an extra room/ extension to add value to their property. I would just propose that a garage that isn’t a junk room and a garden that doesn’t look like a jungle can certainly both be great selling points.

    4. How far is Asda?

    Being a stone’s throw to shops and local amenities is more useful than good schools as reported by the buyers surveyed by GoCompare. Many people wanted a shop located within a short walk more than a school in the vicinity. Best to seriously promote this when selling your home, or even provide a nice information pack for people to take away with them detailing this.

    5. Show Home Vs Pigsty?

    It is a good idea to strike a balance between presenting your property as a show home and one that is ‘way too lived in.’ No-body wants to walk over clothes strewn over your bedroom floor or admire your underwear hanging up to dry. However a property that is immaculately or too minimally turned out can also be off-putting as they are really searching for a home that is comfortable and shows signs of life.

    6. Energy efficiency

    The central heating system in a property is always the center of the attention of buyers these days and they also will expect you to have quite a bit of knowledge on how old the boiler is, how it operates and when it was last serviced. Be prepared to provide viewers explanations on how your home is well-insulated and the energy efficiency rating. Also having your gas and electricity bills to hand also provides people a benchmark on what they can expect to pay to run your home.

    7. Availability of internet facility

    One of the hot topics at the moment is the connection to the internet in your home, and more importantly the speed. Movies and music streaming, surfing the internet, making video calls and the ability to work at home are the expectation of the buyers nowadays .To check the speed of broadband around your location feel free to check Rightmove’s broadband tool. Furthermore people will ask you if are able to get Sky or Virgin in the area/in the property. Particularly with Sky and a property being leasehold- how would you be able to get a dish put on the roof?

    8. Have clarification on what your are selling

    Discuss with your agent as well as your solicitor prior to the house being open for viewings, what you will be including in the sale and the things that perhaps could be negotiated with the potential buyer. Buyers hate surprises, and to find quite far down the line that the turf and lovely roses in the garden are gone, carpets ripped up, light fittings removed and built in wardrobes no-where to be seen could throw a spanner in the works. People want to know what they are paying for and could suddenly propose a price decrease at near completion stage as their budgets are stretched to the maximum and they find out that they really will be buying an empty shell.

    9. Make is simple and easy

    If you desire people to buy your home, you have to make it simple for them to see it. It may sound obvious. For example, try not to limit viewings to just during the day, as you do not want to be disturbed in the evenings as that won’t work for peoples working schedules. Try to be as flexible and accommodating as possible.

    10. Rudeness and Insensitivity

    You will be amazed how honest many people will be as they take a look round a property. Don’t be annoyed by people’s plans for the house, as it is important they can openly discuss how they can turn your house into theirs. Many viewers will make unnecessary compliments/remarks and does it matter if they don’t understand why you made a feature wall in the living room or the way you arranged your furniture that way in the bedroom? Try not to take any criticisms they have to heart. House-hunters are also trying to discover any faults with your home to determine how it can work for them on a practical basis.

    By Natalie Elms. Senior Sales & Lettings Negotiator at Property People. Estate agents in Wimbledon Park


    Tags: selling a property, buyer tastes, conducting viewings, furnished vs unfurnished, seller’s guide to what buyers want, buyer guide, seller guide, top 10 seller tips, estate agents in south west London, Estate agents in Wimbledon Park, estate agents in southfields, lettings agent in Wimbledon, reliable letting agent, property negotiating







    

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