Property Alert

UK Market Overview

Hometrack’s latest market survey suggests the UK property market is showing one or two shoots of recovery. Property prices are up by 0.3 per cent in March, the highest since March 2010. London saw 0.7 per cent growth whilst other ‘winners’ include the South East (0.2 per cent) and East Anglia (0.2 per cent). Even so, in a further reminder that the average can mask a range of performances, we should note that prices rose across (only) 23.9 per cent of the UK. As ever, dig deep!   

London continues to drive the average upwards but, even there, there are signs of a slightly shifting market. As Hometrack states, ‘Compared to a year ago, market conditions have changed. Lower mortgage rates as a result of the government’s Funding for Lending Scheme (FLS) have supported increased activity and demand. The weakening pound and concerns over Cyprus and the Eurozone will only serve to further boost the flow of international funds into the capital.’

‘High stamp duty costs are likely to result in would-be buyers looking to more affordable outer areas of London where properties represent better value for money. This is already being seen in the capital where price growth was strongest in North London compared to central areas where prices posted a below average gain of 0.5 per cent.’

Tenancy Agreement Advice

The Association of Residential Letting Agents (ARLA) has been offering advice on tenancy agreements. ‘Tenancy agreements are a fact of life for tenants and landlords, but all too often they are not fully understood, if properly read at all. Before signing anything both tenant and landlord should always ensure they understand the agreement and negotiate any changes with the landlord or agent before finalising the document. Before you take on a tenancy…

Always negotiate on paper. A tenancy agreement can be altered before it is signed, if both the tenant and landlord agree to the proposed changes. Make sure any agreement to carry out specific repairs or provide additional furniture is put into writing to ensure no disputes arise. A final copy of the signed tenancy agreement should be held by both parties, and this is particularly important if any changes have been made to the original, which may be a template document.

If in doubt, seek professional help. It is worth remembering that, in England and Wales, it isn’t a legal requirement for tenants to have a written tenancy agreement. Despite this, you should always ask for one to be provided by the letting agent or landlord. If there are any terms in the agreement you aren’t familiar with, seek legal advice to clarify any concerns you might have. Any agreement is required by law to be written in plain English, but it always pays to be completely sure you fully understand what you are signing.

Protect your cash. It is a legal requirement for tenancy deposits to be protected by an approved deposit scheme, and this should be explicitly referenced in the tenancy agreement. For further protection, you should also agree on who has responsibility for conducting an inventory of the property with your landlord or agent. This should then be written into the final countersigned agreement. For peace of mind when using an agent always check that they are affiliated to a professional organisation like ARLA. All ARLA agents must adhere to a strict code of conduct, as well as offering client money protection and redress schemes, which protect you if things go wrong.

The Tenant’s Viewpoint! When you rent from a private landlord, or through their agent, you have a legal right to use the property in a reasonable fashion without being disturbed by either party. If the landlord or letting agent would like to access the property, they should give at least 24 hours notice to comply with this requirement. It should be noted, however, that a tenant has a legal obligation to provide access for repairs, assuming sufficient notice is given by the landlord.

Until strife do us part! If you are sharing a rental property with others you may see a clause in the tenancy agreement referring to joint and several liability. In effect this means that if one or more tenants stop paying rent for any reason or cause any damage, for example, the remaining sharers will be liable for the associated costs. If this clause is present in a contract, always be sure to assess how well you know your prospective housemates. In some cases a guarantor form will have to be signed by a parent or guardian, which gives the landlord additional protection if a tenant should fail to pay the rent. If this is the case, the joint and several liability will be passed on to them.

Who pays the bills?  The tenancy agreement should clearly outline what utility and household bills you will be responsible for, and if there is any uncertainty, be sure to clarify this with the landlord. To get an idea of how much energy bills will cost, always ask to see a property’s Energy Performance Certificate (EPC) before you sign up. The closer to ‘A’, the more likely it is to hold in heat and register lower utility bills. The tenancy agreement should outline which party is responsible for maintaining the property. This could be the landlord themselves, or a managing agent. In either case, make sure you have contact details before the keys are handed over.

ARLA concludes, Ignorance of the terms outlined in a tenancy agreement is no defence against losing a deposit or being saddled with an unexpected bill. You can save a good deal of time and money by familiarising yourself with the terms. Renting should ultimately be a positive experience and a basic level of understanding, combined with good communication with landlords and letting agents should ensure this is the case.’

Property Selling Tips – a good place to compare products – offers some property selling tips.

Identify your target market. The type of property you want to sell will determine the type of people likely to be interested in buying it. If you are selling a city centre studio, for example, your target market will probably be young professionals, either living alone or as a couple. But if you have a four-bedroom, detached house in a suburban area, families looking for a larger living space are much more likely to come knocking at your door. It is therefore important to prepare yourself and your property for the sort of buyers it will attract. This could include finding out information about local transport links or replacing a patio with grass suitable for playing on.

Pick the right price. Nobody wants to sell a property for less than it is worth. However, even with confidence in the housing market picking up, it is vital to be realistic. Otherwise, you may find yourself still waiting for an offer six months or a year down the line. The best way to avoid over or under-pricing your home is to do your own research into the asking prices – and sale prices – of similar properties in the local area before asking at least three estate agents for valuations.

Remember that first impressions count. Most buyers will decide whether they are interested in your property within seconds of first seeing it from the outside. And some will cross your home off their list after just driving past it if the impression they get is not good. Painting a scruffy front door, mending a broken fence or tidying up your driveway could therefore make all the difference. After all, you don’t want potential buyers losing interest before they have even stepped inside.

Spruce up your décor. There is usually little point spending a lot of money doing your property up to sell. In fact, most property experts advise spending no more than 2 per cent of your asking price on improvements designed to attract buyers. That said, there is no doubt that painting stained walls, mending dripping taps and giving the whole place a deep clean can make a big difference. If you have a garden or balcony, a few new plants and some smart-looking garden furniture could also prove a wise investment.

De-clutter your home. As much as you might love your collection of teddy bears or china dogs, the people coming to look at your house may not feel the same way. What’s more, while filling up your property with your little treasures makes it feel homely to you, it will make it harder for potential buyers to see themselves living there. Less clutter will also make any home seem bigger, making a clear-out before viewings a no-brainer.

Letting Agent Lowdown

According to The Property Ombudsman, 15,782 complaint enquiries were made to him in 2012; up 12 per cent on 2011. News from The Property Ombudsman suggests that, if you use an unregulated letting agent and something goes wrong it’s your tough luck (so far as the Ombudsman is concerned anyway).

The largest payout of £13,335 to a complaining buy-to-let landlord was because their agent placed an illegal tenant in their property and then did little or nothing for months whilst the rent went unpaid. The agent was said to have been reckless. If this had been an unregulated agent, no compensation would have been paid.

It’s important to note that letting agents do not have to be licensed or have to belong to a regulatory body. Even when your agent is regulated, there can still be issues – as the £13,335 case suggests! Time for an update to our ‘How To Pick A Letting Agent’? I’d say so – we’ll include it in the April issue out later next week.

BTL Mortgage News

TBMC, the buy-to-let and commercial mortgage specialist, has a new exclusive buy-to-let mortgage from Mortgage Trust. The initial rate is 4.75 per cent fixed to 30 June 2015. It comes with a free valuation and no completion fee. The early repayment charge is 5 per cent until – note – 30 June 2016. There is a £150 booking fee.

Andy Young at TBMC says, ‘We are delighted to launch this new buy-to-let exclusive from Mortgage Trust with no completion fee, because even though the buy-to-let mortgage market is becoming more competitive, many of the products on offer carry high percentage fees.’ As ever, talk to a broker and crunch the numbers to see whether a low rate-high fee deal is better or worse than a high rate- low or no fee deal is for you.

Smoke Alarm Reminder

It’s sunny (but cold) and spring is in sight – and it’s time to forget about smoke alarms until the winter? No, definitely not, says Wiltshire Fire & Rescue Service. ‘We know that working smoke alarms save lives yet too many people don’t take the time to test them regularly. The move to summer time always feels like a fresh start and so it’s an ideal opportunity to make sure your home is safer by installing new smoke alarms or cleaning and checking any you already have.’

‘Smoke alarms are inexpensive and can be bought in DIY stores and at many supermarkets. They should be fitted on every level of your home in accordance with the manufacturer’s instructions provided. Ten-year alarms are recommended for longer term protection.’ Time to check?

Leave a Reply

Your email address will not be published. Required fields are marked *