Ask the Estate Agent

Selling a property at auction could help you shift your home quickly, but that doesn’t mean it’s right for everybody.

Should you sell your property at auction, and if you do, will you make more profit than going a more traditional route?

These are key questions, but before you consider an auction as an option it’s vital to understand the consequences – once the hammer falls, you can’t change your mind, and the sale is binding.

Here’s what you need to know, and how to go about it.

An auction sale may appeal if you’ve got to make a quick move, for example, you need the cash urgently to pay off other debts.

Properties for sale at auction will be there for a number of reasons, such as bankruptcy, or repossession.

Alternatively, they may have particular issues that could prove problematic for mainstream buyers, such as a short lease.

If you have a property with such an issue that you’re finding hard to shift, selling at auction may offer a solution.

All types of property are up for sale at auction.

However, this way of selling often attracts more unusual properties. Auction houses are known for attracting buyers looking for a property project, or a property that may not typically be on the market.

You’ll pay around 2.5% of the price you finally receive for your property to the auction house, although it depends on which one you use. You may also pay for advertising costs, if required, even if the property isn’t sold.

The costs of selling at auction may be higher than using an estate agent, so do your sums before signing up your property.

Once a sale is agreed, you’ll also need to fork out for a solicitor, as you would with a standard sale.

Essential Information Group (EIG) at www.eigpropertyauctions.co.uk offers a useful database, which is a good starting point.

Contact those auction houses you may be interested in, and ask to receive details of properties for sale, to get an idea of how your property will be marketed.

Ask any questions you might have, and it’s also worth visiting some auctions, which are free to attend, to see how the sale process works.

Your property will feature a guide price and a reserve price, which are not the same.

The guide price will typically be less than the property actually sells for. It’s the price that potential buyers will see, giving an idea of what the property is worth.

The reserve price is set by the seller, and it’s the lowest price they are willing to accept. This may be kept secret, between you and the auctioneer.

The reserve is not usually set too high, but if your property is expected to appeal to bidders, it could receive a high reserve price.

If offers are lower than the reserve price the auctioneer will withdraw the property from sale.

It’s important to think carefully about the price you’re comfortable with, as once a sale is made, you cannot change your mind.

The auction house will market your property in the weeks leading up to the auction, and it’s up to you to ensure it’s looking its best to attract potential buyers.

You can choose to publicise your property yourself if you wish, perhaps through social media, and by spreading the word that it’s for sale to family and friends.

The bid with the highest offer that’s accepted is your buyer – and you are legally committed to selling the property to them.

Once the hammer falls, you will receive 10% of the cost of the property before the buyer leaves the auction, with the balance to be paid in full within 28 days. So it’s a speedy process, and you need to be prepared to move quickly.

A buyer in need of a mortgage should have this in place if they are seriously bidding on your property, with the lender able to complete their application within three weeks of the sale.

So that concludes this episode of Ask the Estate Agent Podcast. You can contact us anytime using the links below:

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Website: www.asktheestateagent.co.uk

So don’t forget to contact us with any subjects you would like us to cover or questions you would like answering in the coming episodes and until next time I would like to thank you for listening and goodbye for now.

This podcast is brought to you by www.libertygate.co.uk 

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Feeling a bit overwhelmed while trying to choose an estate agent to help sell your home? Here we list the key criteria to look out for.

When it comes to selling your home, it’s advisable to appoint an estate agent to help value it, create a marketing strategy for your property to get the results required, provide ‘for sale’ boards, conduct viewings, and generally deal with the sales process from start to finish.

There are a variety of services available depending on how much involvement and work, you would like to do, so make sure you research and decide what exactly you want from your estate agent from the outset.

Estate agents are becoming ever-more professional, helped by a raft of measures announced by the Government last April, to drive any rogue agents out of the market. These included professional qualifications, the requirement for Client Money Protection and a requirement to be transparent about fees.

The requirement for agents to have a professional qualification will put them on a similar footing to conveyancers, solicitors and surveyors.

At the same time, agents who don’t comply with the new rules will face greater penalties, including being fined or even banned.

But it is still worth checking your estate agent’s credentials before signing on the dotted line, so what exactly should you look out for?

No. Rather than an overall governing body, there is a hierarchy of legislation, mandatory redress schemes and professional trade bodies.

So how do you know where to begin?

Find out if your agent is a regulated member of a professional body. Many agents will be members of trade bodies, such as estate agency industry body, NAEA Propertymark or the Royal Institution of Chartered Surveyors (RICS).

The NAEA is the professional body for estate agents, promoting high standards within the property sector. Members are bound by strict rules and are expected to uphold high levels of professional standards. They must adhere to a strict code of conduct. NAEA can issue tough penalties if rules are breached.

Agents who belong to RICS face sanctions if they act inappropriately. In the worst cases, agents could end up losing their chartered status, meaning they can no longer carry out certain types of work. 

All estate agents need to be a member of a Government-approved independent redress scheme. This is a legal requirement. The idea behind this is that complaints can be dealt with quickly and easily.

With this in mind, make sure your agent is a member of The Property Ombudsman or Property Redress scheme.

The role of an independent redress scheme is to provide fair and reasonable resolutions to disputes with members of the public.

Note that the Ombudsman Services: Property was discontinued in August 2018. Members of this scheme have had to join an alternative scheme.

Check for membership of a Client Money Protection Scheme (CMP)

This became a legal requirement for any agency handling clients money to be a member of one of the six government schemes

It can be tempting to go for the one that gives you the highest valuation. But you need to consider other factors, such as fees, the time is takes to sell properties, the service offered and whether the agent belongs to any regulatory bodies.

This will ensure you are getting an agent working to the highest standards, offering honest advice and a top-notch service.

Other things to assist in your decision

Online Reviews

Take with a pinch of salt but look for any consistent messages or how the agent has responded to these reviews.

Personal recommendation

Ask around local friends and collegues who they have used and how they would rate them.

Use social media for local recommendations.

So that concludes this episode of Ask the Estate Agent Podcast. You can contact us anytime using the links below:

Facebook: www.facebook.com/asktheestateagent

Instagram: www.instagram.com/asktheestateagent

Twitter: www.twitter.com/asktheEA

Website: www.asktheestateagent.co.uk

So don’t forget to contact us with any subjects you would like us to cover or questions you would like answering in the coming episodes and until next time I would like to thank you for listening and goodbye for now.

This podcast is brought to you by www.libertygate.co.uk

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The new tax year has now kicked in from the 6th of April so here's how it could impact you from a property perspective.

As of today, savers have access to a fresh ISA allowance.Under the terms of the accounts, consumers can save £20,000 into the vehicles each year without having to pay tax on any interest payments, dividends or gains. The money can be split between Cash ISAs, Stocks and Shares ISAs and Innovative ISAs.

Alternatively, people aged under 40 can opt for a Lifetime ISA,into which they can save £4,000 of their annual ISA limit each year until they are 50. The Government will add a bonus of 25% or up to £1,000 a year, but the money must be used to buy your first home or to save for retirement.

First-time buyers saving for a property deposit can opt to use the Help to Buy ISA, under which they can save up to £3,400 in the first year and £2,400 in subsequent years. The Government will then top this up with a bonus of 25% up to a maximum of £3,000. But aspiring first-time buyers who want to take advantage of the scheme need to move soon, as it will not be possible to open new accounts after November 30 this year.

Savers who are interested in getting exposure to the housing market could consider taking out a property ISA, which pools investors cash into a REIT and uses the money to purchase buy-to-let homes across UK cities. Investors benefit from both the rental income and any increases in the value of the properties purchased.

The new tax year brings a further reduction in the amount of tax relief on mortgage interest that landlords can claim. Up until 2016/17, landlords could deduct all of their mortgage interest and other allowable costs from their rental income before calculating how much tax they had to pay.

But the amount they can claim has gradually been tapered down, and this year they can offset only 25% of these costs against their rental income, with 75% of the costs given as a basic rate tax reduction.

The relief will be phased out completely from April 6, 2020, when landlords will only be able to claim a basic rate tax deduction on mortgage interest, even if they are a higher rate taxpayer.

One piece of good news is that from April 6, everyone can earn more before they have to start paying tax. The personal allowance now goes up to £12,500, while people will have to earn £50,000 before the 40% higher rate of tax kicks in.

The increase is relevant for landlords, as rent from investment properties is classed as income.

It is also good news for people saving for a property deposit, as they will be £650 a year better off if they are a basic rate taxpayer and nearly £3,650 better off if they are a higher rate one.

Another allowance that has increased in the new tax year is that of capital gains tax. People will now be able to make capital gains of £12,000 a year before they become liable for the tax, a slight increase from £11,800 in the previous tax year.

This is good news for investors selling buy-to-let homes, although they will still be stung with a capital gains tax rate of 18% for basic rate taxpayers and 28% for higher rate one, rather than rates of 10% and 20% respectively charged on other assets.

For people interested in buying a council or social housing property, the maximum discount they can benefit from has increased to £82,800, rising to £110,500 in London.

Right to Buy enables eligible council and housing association tenants in England to buy their home for a discount to its market price, depending on how many years they have lived there. The maximum discount increases each year in line with inflation as measured by the Consumer Prices Index.

Unfortunately, for people hoping to inherit a property, there has been no change to the inheritance tax threshold, which remains at £325,000, with tax charged at 40% on assets above this level.

There has also been no increase to the annual Rent a Room allowance,under which homeowners can earn up to £7,500 a year tax free by renting out a room in their property.

From the start of the new tax year, however, a new condition has been added to the scheme stating that the property in which the room is let must be your main or only residence.

Stamp duty rates also remain unchanged, although the Government is currently carrying out a consultation on imposing a 1% surcharge on overseas buyers.

So that concludes this episode of Ask the Estate Agent Podcast. You can contact us anytime using the links below:

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Website: www.asktheestateagent.co.uk

So don’t forget to contact us with any subjects you would like us to cover or questions you would like answering in the coming episodes and until next time I would like to thank you for listening and goodbye for now.

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Here is the essential list of documents that you should expect as a tenant from your landlord.

1. A copy of the Government’s rental guide

This guide sets out all the information you should be given as a tenant, your legal rights and what to expect from the rental process: How to rent: The checklist for renting in England

1. A gas safety certificate

If your rental home has any gas installations (such as an oven), your landlord must arrange an initial gas safety check as conducted by a Gas Safe engineer – and provide you with a certificate. If they don't you can report them to the Health and Safety Executive (HSE).

1. The paperwork protecting your deposit

Your landlord must hold your deposit in a government-backed Tenancy Deposit Scheme, so you'll be protected if there's any disputes at the end of the tenancy. You’ll be given the paperwork for the scheme which should clearly state the sum being held.

1. An Energy Performance Certificate (EPC)

This certificate rates the energy-efficiency of your rental home, from A (most efficient) to G (least efficient).

1. Relevant contact details

Your landlord (or lettings agent acting on behalf of the landlord), should provide their full contact details including address and telephone number in case of an emergency.

A ‘nice-to-have’…

It’s not law but it's good practice for your landlord to provide you with reports of any electrical inspections.

6. If applicable – A copy of any licencing (HMO, selective) if your property is in a licensable area then a copy of the licence should given to you so you are aware of the guidelines and restrictions of the licence.

So that concludes this episode of Ask the Estate Agent Podcast. You can contact us anytime using the links below:

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Website: www.asktheestateagent.co.uk

So don’t forget to contact us with any subjects you would like us to cover or questions you would like answering in the coming episodes and until next time I would like to thank you for listening and goodbye for now.

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Investing in property has long been considered a smart move and given the demand for rental property in the UK has increased, it is easy to see why people have moved into this market.

The change in stamp duty tax, from the 1st of April 2016, has impacted on the way that some people think about the buy to let market. There are still plenty of opportunities to make money and enjoy a good return on an investment.

Here are 7 things to consider when buying an investment property.

Who will your tenants be?

This is fundamental with respect to your investment but it is something that so many people overlook. Who you will rent your property to is likely to be the biggest factor in the long-term success or failure of your investment.

You should look into the demographics of tenants and decide who you want to attract. The choice of area and type of home you buy can impact on who is likely to rent from you, and some of the common groups of tenants include:

• Families
• Students
• Young professionals
• Downsizing retirees

These different groups all have their own needs, demands and expectations of a property. They are also likely to pose different challenges and benefits to landlords, so you need to have a strong idea about who you want renting your home.

Where will you buy?

For some investors, the most important aspect of investing in property is finding property close-by. If you intend on being a hands-on landlord, it makes sense to invest in property that you can attend at short notice or with a short drive.

What can you afford?

There is no point setting your heart on buying a four bedroom property in a stylish part of town if your entire budget can only stretch to a flat in an up and coming neighbourhood.

There are property investment opportunities for all budgets but you need to make sure that you have sufficient funding first before starting to consider buying. You also need to consider any additional fees, charges and costs associated with buying a property.

The purchase price of the home is not the total amount of money that you will spend, so be sure to examine the bigger picture each time.

What will be the rental yield?

Once you are assured of how much money you can afford to spend when buying a property, you must also focus on the rental yield. The rental yield is what you forecast to receive from your investment. The bigger the yield, the more attractive your investment is likely to be so it is important to calculate the lowest and highest yields each time.

The three key aspects of determining rental yield are:

• The purchase price of the property you have chosen
• The annual expenditure in maintaining a property
• The annual rental income

Do you know what the legal responsibilities are?

If you are looking to become a landlord to obtain an additional income, you may not be fully aware of the responsibilities associated with this. You need to have a business approach in letting out your property, which means that you need to focus on the tax issues of owning and letting a property in the UK.

Some of the most important regulations landlords need to adhere to include:

• Energy performance certificates
• Gas safety certificates
• Offering compliant plugs/sockets and safe electrical appliances
• Protecting the tenant’s deposit
• Providing Fire resistant furniture
• Right to rent checks
• Serving prescribed information

Not complying with these, and other, regulations is illegal and could land you with a hefty fine (or worse). Make sure you’re prepared to invest the time, energy and money to ensure you’re legally compliant at all times.

What to do when things go wrong?

Hopefully life will be simple and straightforward for a landlord but in reality, things can and will go wrong at times. You need to know who to turn to and this is why many landlords decide to instruct a property management company. Property management or letting agencies have experience and expertise in caring for properties and no matter the situation; they will know how to respond or what professionals to call on.

What type of landlord do you want to be?

This is a question that all landlords need to ask themselves, and it is one that they need to ask well before they move forward with their buy to let investment. Do you want to be a hands-on style of landlord or do you just want to bring in regular income with very little involvement? There is nothing wrong with either option but they create very different scenarios for landlords, and you need to be aware that being a hands-on landlord can be very time consuming and challenging.

So that concludes this episode of Ask the Estate Agent Podcast. You can contact us anytime using the links below:

Facebook: www.facebook.com/asktheestateagent

Instagram: www.instagram.com/asktheestateagent

Twitter: www.twitter.com/asktheEA

Website: www.asktheestateagent.co.uk

So don’t forget to contact us with any subjects you would like us to cover or questions you would like answering in the coming episodes and until next time I would like to thank you for listening and goodbye for now.

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If you are renting a home for the first time, lettings agency fees can come as a nasty surprise. Get prepped on what to expect with this short guide

In 2016 Autumn Statement, the Chancellor, Philip Hammond announced he would place an outright ban on lettings agent fees charged to tenants.

The Government has now confirmed plans to implement the ban on all new tenancies signed after June 1, 2019.

One of the Government’s main concerns with letting agent fees is that, while they must be clearly advertised, they’re not regulated or even uniform. That means upfront costs to rent a home can differ according to location and agent.

But that's not to say you can't get a benchmark. Here's a round-up of the kind of fees you could encounter before the ban takes effect:

Before you move in…

Holding deposit
Potential cost: £200-£500

This is a sum charged by the lettings agent to ‘reserve’ the property and take it off the market. The amount varies but one week's rent is a good benchmark.

However, as the amount is subtracted from your main deposit which is returnable at the end of your tenancy, a holding deposit is not really a fee. You'll only lose the money if you don't proceed to signing the agreement after the property has been taken off the market.

Contract/ administration fee
Potential cost: £350

This fee covers drawing up the contract (usually an Assured Shorthold Tenancy agreement) as well as any other administrative tasks such as the inbound inventory, phone calls and photocopying.

Reference checks
Potential cost: £75-£100 per person

This pays for the agent to run references on you and anyone else named in the contract. They’ll usually contact your current employer and/or previous landlord. If you are using a guarantor, they’ll be referenced too.

Credit checks
Potential cost: £50-£100 per person

This pays for the lettings agent to conduct a credit check on you using a credit reference agency such as Experian or Equifax. Even if just one of you is responsible for paying the rent, the agency may still credit check both of you.

Once you're in the property…

Tenancy renewal
Potential cost: £150-£180

This pays to renew your contract at the end of the tenancy agreement should you choose to stay on at the property. This is also the time at which the landlord is at liberty to put the rent up.

Amendment to contract
Potential cost: £100-£120

This could be payable if you require the existing contract to be amended. For example, you want to change the term or swap a housemate.

Unpaid rent
Potential cost: Around £30 per payment

You will need to set up a standing order so your rent comes out of your bank account directly. However, if there’s not adequate funds and the payment bounces, your lettings agent or landlord may charge you (your bank might too).

Early termination
Potential cost: Up to £300 per person

If you want to leave before the tenancy agreement ends and your landlord doesn’t agree it, not only will you be liable for the outstanding rent, you could be hit with early termination fees too.

When you're checking out…

Checkout fee
Potential cost: £100-£300

This will pay for the outbound inventory, where the agent will check everything is in order with the property when you leave and that it’s been cleaned to the appropriate standard.

Deposit deductions
Potential cost: Up to the cost of your initial deposit

If the lettings agent finds any damage to the property or any items missing from the inventory, they could deduct the cost from your deposit.

So that concludes this episode of Ask the Estate Agent Podcast. You can contact us anytime using the links below:

Facebook: www.facebook.com/asktheestateagent

Instagram: www.instagram.com/asktheestateagent

Twitter: www.twitter.com/asktheEA

Website: www.asktheestateagent.co.uk

So don’t forget to contact us with any subjects you would like us to cover or questions you would like answering in the coming episodes and until next time I would like to thank you for listening and goodbye for now.

Source: Zoopla

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So here we have compiled some top tips aimed at novice landlords that some experienced buy-to-let landlords may also find useful.

Letting your property is a big decision, both for you and the tenants that will be living there, so it’s important you understand what being a landlord means.

So here are some top tips to ensure you understand your responsibilities as a landlord, know how to protect your property, and keep your tenants happy.

1. Do your research

First thing’s first, get to know your market. Research similar properties in the local area and find out how much they are being let for per month. If your rent is set too high, prospective tenants will steer clear. A local, experienced agent will be able to advise on this and also give you essential advice on the local market conditions. Once you’ve done your homework, set a competitive price and aim to keep it filled at all times to minimise rental voids.

2. Check in with your mortgage provider

By renting out your home, you go from being a home-owner and occupier to a landlord, and with your new status, comes great responsibility. In the first instance, you need to check if your mortgage allows you to let out your property as some agreements include caveats to prevent homes from being rented. If you are unsure, speak to your mortgage lender and they will be able to advise you accordingly.

3. Know your responsibilities

Being a landlord is a 24/7 job, so you should be prepared to receive calls from your tenant at any time during the day or night. Some issues will need immediate attention and unless you have a managing agent, you are entirely responsible for acting on repairs and maintenance quickly.

4. Get the property rental ready

Make sure your property is clean and any modernisation or DIY projects are finished. It will be more attractive to prospective tenants if it’s had a fresh lick of paint, all repairs are done and if necessary, new flooring has been installed. You should also think about the type of tenants your property will be best suited to; for example, young families, students or single professionals. This will determine whether you should let it furnished or unfurnished. If possible, offer both options, so the agent can market your property to a wider audience.

5. Sort out the insurance

Your existing buildings and contents insurer must be made aware of your intention to let your property, as your policy will probably need to be amended. While specific landlord insurance isn’t a legal requirement, it’s advisable as the policy will protect the building, your tenants and your investment as a whole – some policies will also pay out if your tenant misses their rent payments.

6. Legal requirements

When it comes to being a landlord, there are more regulations to comply with than you can shake a stick at. To put it into perspective, there are currently around 150 laws that landlords need to adhere to while letting a property. At the start of a tenancy agreement, you must carry out Right-to-Rent checks in line with immigration laws, protect deposits and have all the essential paperwork in place.

While it isn’t a legal requirement, it’s a very good idea to have a written tenancy agreement so both you and your tenant understand your rights and responsibilities.

The safety of your tenants is number one in my opinion as very tenant deserves as safe and secure home, so you must also arrange a Gas Safety check every year. It’s also a good idea to make sure all electrical appliances and wiring are tested regularly too. Finally, it goes without saying that your rental property should be fitted with smoke alarms on every floor and carbon monoxide detectors where necessary.

By law, your property needs to have an EPC (energy performance certificate), and it currently needs to be Band E or above. You won't be able to market the property unless you reach this standard and have a certificate to prove it, so get it sorted as soon as possible – they're valid for 10 years.

7. Regular inspections

It’s important to undertake regular inspections of the property, although remember you can’t enter the property without your tenants’ permission. This is classed as trespassing and is illegal. Give them at least 24 hours’ written notice, and this should be stipulated in your tenancy agreement.

8. Choosing the right agent

If you want to make the process pain-free, use an agent to manage your property and guide you on everything you need to know. A good agent will take away the stress of finding suitable tenants and will ensure your property complies with any regulatory changes. Propertymark Protected agents are experienced and trained professionals who work to a code of practice in order to help landlords manage their homes.

If you are using a letting agent, make sure they are a member of ARLA Propertymark as they have Client Money Protection (CMP). This ensures that if the agent goes bust or runs off with your money, Propertymark will reimburse you and make sure you’re not left out of pocket.

So that concludes this episode of Ask the Estate Agent Podcast. You can contact us anytime using the links below:

Facebook: www.facebook.com/asktheestateagent

Instagram: www.instagram.com/asktheestateagent

Twitter: www.twitter.com/asktheEA

Website: www.asktheestateagent.co.uk

So don’t forget to contact us with any subjects you would like us to cover or questions you would like answering in the coming episodes and until next time I would like to thank you for listening and goodbye for now.

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A new Housing Complaints Resolution Service has been announced in January for the entire housing market and for the first time ever, private landlords will be legally required to join a housing redress scheme. Click here to view the MHCLG release:

Private landlords including providers of purpose-built student housing and park home sites will be legally required to become members of a redress scheme – with a fine of up to £5,000 if they fail to do so.

James Brokenshire, Communities Secretary, has announced an overhaul of the ‘broken housing complaints system’ as they put it with plans for a new housing complaints service for the entire housing market ensuring both homeowners and tenants know where to go when things go wrong.

Dissatisfied homeowners and tenants will have simple and quick access to help when things go wrong, thanks to new plans announced today (24 January 2019) by Communities Secretary Rt Hon James Brokenshire MP.

From broken boilers to cracks in the wall, the new Housing Complaints Resolution Service will potentially help millions by providing a straight-forward way of getting help when faced with unresolved disputes about problems with their home – such as repairs and maintenance.

Unlike other sectors, such as financial services, the housing market has several different complaints bodies, with homeowners and tenants having to navigate their way through a complicated and bureaucratic system just to work out where to register a grievance.

Establishing a single housing complaints service for all residents – no matter whether they rent or own their home – will prevent people from battling with their landlord or builder to resolve issues on their own and make it easier to claim compensation where it’s owed.

Communities Secretary Rt Hon James Brokenshire MP, said:

“Creating a housing market that works for everyone isn’t just about building homes – it’s about ensuring people can get the help they need when something goes wrong.

“But all too often the process can be confusing and overly bureaucratic, leaving many homeowners and tenants feeling like there is nowhere to go in the event of problems with their home.

“The proposals I have announced will help ensure all residents are able to access help when they need it, so disputes can be resolved faster, and people can get compensation where it’s owed.”

Currently, the housing complaints system is confusing – there are multiple complaint bodies covering the housing market, and membership of redress schemes is compulsory for some tenures but not others.

For example, in the private rented sector, there is currently no obligation for landlords to register with a complaints system – leaving thousands of renters without any course for redress.

To combat this, the Communities Secretary has announced that private landlords will be legally required to become members of a redress scheme – with a fine of up to £5,000 if they fail to do so.

And to protect the interests of home-owners who buy new build homes, government has also reiterated its commitment to establishing a New Homes Ombudsman which will champion home buyers, protect their interests and hold developers to account.

Legislation will be brought forward at the earliest possible opportunity to require all new developers to belong to the Ombudsman – giving homebuyers the confidence that when they get the keys to a new home they are getting the quality of build they expect.

Developers will also have to belong to the new body by 2021 if they wish to participate in the government’s landmark Help to Buy scheme.

FREEHOLDERS TOO

Other measures alongside this include requiring all freeholders to join a redress scheme regardless of whether they use a managing agent or not.

The Housing Complaints Resolution Service will be developed with a new Redress Reform Working Group made up of representatives from across the sector, working with industry and consumers.

This is part of on-going work by the government to make the property market fairer and more transparent for everyone.

So what are your thoughts on this announcement. My opinion is that this is long overdue and will help make the whole property market more transparent, accountable and therefore safer for people to navigate so I welcome this announcement but I would love to hear your thoughts on this. Please get in touch on our website or perhaps join in the conversation with us on Social Media.

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Website: www.asktheestateagent.co.uk

So don’t forget to contact us with any subjects you would like us to cover or questions you would like answering in the coming episodes and until next time I would like to thank you for listening and goodbye for now.

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From reduced tax breaks to tougher regulations, in this episode we take a look at the changes that will impact landlords in the year ahead.

Landlords have endured a difficult time in recent years with a raft of tax changes and new regulations coming into force.

Unfortunately, this trend looks set to continue in 2019, although there are some positive developments.

We take a look at the changes that landlords need to be aware of.

1. Client money protection

In a development that is seen as being good news for landlords, all property agents in England will have to belong to an approved Client Money Protection Scheme from April 1 this year.

The schemes aim to protect both landlords’ and tenants’ money, such as rent or deposits, if a letting agent goes into administration.

They should also help to prevent money from being stolen or misused. Letting agents face stiff fines of up to £30,000 if they fail to sign up to one of the schemes.

1. Mortgage interest tax relief cuts

The level of mortgage interest tax relief that landlords can claim will be reduced further from April 6, with the amount investors can deduct from their rental income falling from 50% of their buy-to-let financing costs to just 25%.

The relief will end completely in April next year, when it will be replaced by a 20% tax credit for mortgage interest. The move will not only leave landlords facing high tax bills, but could also push some basic rate taxpayers into the higher rate band.

1. Ban on tenant fees

The Tenant Fees Bill is currently making its way through the House of Lords and is expected to become law in England this spring, depending on Parliamentary time.

The bill means letting agents will not only no longer be able to charge tenants fees to cover the cost of doing credit checks or preparing rental agreements, but the amount tenants can be charged to repair minor damage to properties will also be limited, while security deposits will be capped at five weeks’ rent.

The move is expected to save tenants between £200 and £300, but there are concerns letting agents will simply pass on the costs to landlords.

1. Homes fit for habitation

The Homes (Fitness for Human Habitation) Bill is now law, meaning all landlords in England have to make sure their properties are fit for human habitation throughout the course of a tenancy.

If landlords fail to comply with standards set out under the Housing Health and Safety Rating System, their tenants can take legal action against them.

While the bill means higher costs for landlords who need to get their properties up to scratch, it has been widely welcomed by trade bodies in the sector for giving renters greater protection against rogue operators.

1. Energy efficiency upgrades

Around 200,000 landlords will have to upgrade the energy efficiency of their property this year. Landlords were previously exempt from meeting the minimum energy efficiency requirements if measures to improve a property would cost more than £2,500.

But the threshold has now been increased to £3,500, meaning fewer landlords will be exempt. The upgrades are expected to cost landlords an average of £3,500 each.

1. Longer tenancies

The Government has gone quiet on its proposal for longer tenancies, but rules allowing people to opt for a three-year minimum agreement could still be brought in this year.

The Government wants to see minimum three-year terms to give people who rent their homes more stability, although both landlords and tenants would have a six-month break clause.

More than three-quarters of tenancy agreements are currently for periods of six or 12 months. While the move could be seen as good news, as it gives landlords more certainty, there are fears that it will drive small-scale buy-to-let investors out of the market.

1. New housing court

The Government is expected to unveil more details about its new Housing Court during the year. Under proposals previously announced, it would be a specialist court that provided a single route for dispute resolution and redress between landlords and tenants.

The move should make it simpler for landlords to navigate the legal system relating to tenancy disputes, while it could also make it easier for them to evict problem tenants. The Government is currently undertaking a call for evidence on the issue.

1. Land and Building Transaction Tax hike

People buying a second property in Scotland face a tax hike after the Scottish Government announced plans to increase the surcharge they pay on Land and Buildings Transaction Tax from 3% to 4%. The rate rise came into force on the 25th of January.

1. Rogue landlord database

Although launched in 2018, it is only from the start of this year that the Government’s Rogue Landlord Database is expected to start receiving entries.

The database will include the details of landlords who are convicted of letting substandard properties or flouting their legal obligations.

After previously saying the information would only be available to local authorities, the Government has since decided the public will also be able to access it.

1. Competitive mortgage rates

While landlords have been subjected to tougher affordability checks in recent years, there is some good news on the mortgage front, with the cost of buy-to-let deals coming down.

The average cost of a five-year fixed rate mortgage for landlords fell to a record low in the final quarter of last year, according to financial information group Moneyfacts.

The group attributed the fall, which came despite a hike to the Bank of England base rate in August, to the high levels of competition in this sector of the mortgage market.

So that concludes this episode of Ask the Estate Agent Podcast. You can contact us anytime using the links below:

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So don’t forget to contact us with any subjects you would like us to cover or questions you would like answering in the coming episodes and until next time I would like to thank you for listening and goodbye for now.

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Having the rug pulled when you have agreed a property purchase is a gut-wrenching and expensive experience, so take the right steps to minimise the risk.

Gazumping may be less prevalent right now – with the latest figures showing a fall in this happening but you still need to be prepared.

While this is good news for those looking to purchase a property, gazumping – where a seller accepts an offer, only to reject it later in favour of a last-minute offer from someone else – has not gone away. 

Where is it happening?

London retains the crown as the gazumping capital, with 66% of buyers having been gazumped in 2018. This figure is up from 35% in 2017.

As anyone who has been gazumped will testify, it’s a horrible thing to have happen when you are trying to buy your dream home.

In many cases, unless you can somehow find the cash to make a higher counter offer, it means that a lot of time and money has been wasted – and that there’s no choice but to go back to square one and start the property search all over again.

You might expect this controversial and unpopular practice to be illegal – but it isn’t. Under English law, the agreement between you and the seller does not become legally binding until contracts have been exchanged.

Plans to reduce gazumping

The good news is that the Government is looking to help reduce the number of buyers who fall victim to gazumping by introducing what are known as ‘voluntary reservation agreements.’

If introduced, these measures could make the buying process a lot less stressful. In the meantime, there are steps you can take to reduce the risk of falling victim.

1. Get organised

One of the simplest ways to reduce the risk of getting gazumped is by being organised and getting all your ducks in a row.

Make sure your finances are in place and that you’ve got a mortgage ‘agreement in principle.’ This is essentially a letter from a lender setting out how much they would be willing to lend, based on an initial assessment of your circumstances.

You also need to have a solicitor appointed – one who is available and proactive – and all the necessary documentation to hand, including the required ID.

If you are selling at the same time as buying, get your property on the market. Better still, get an offer on your current home before making an offer on the one you want to buy to ensure timing won’t be an issue.

The shorter the time between agreeing a sale and exchanging contracts, the less likely it is the deal will fall through.

1. Get the property taken off the market

Once your offer is accepted, you should ask the seller to take the property off the market.

Make sure this is done in writing or it will not be legally binding, meaning the seller can change their mind at any time.

You should also ask the estate agent to remove signs from outside the property and remove its online listing.

While the seller and agent aren’t legally obliged to do this, you should question their reasons if they say no.

1. Keep things moving quickly

Do all you can to keep the process moving along as quickly as possible. This means being in regular contact with your mortgage broker and conveyancing solicitor to ensure they respond quickly to requests for information.

Also make sure you read, sign and return forms as promptly as possible. You don’t want your case to fall by the wayside, or things could drag very slowly.

1. Get friendly with the sellers

There are no guarantees this will work, but if you take the time to get to know the sellers – and show them you’re a serious buyer with your heart set on the property they’re selling – there’s less chance of them dropping you at the last minute for a better offer.

1. Consider a lock-out agreement

You might want to think about a ‘lock-out agreement’ or ‘exclusivity agreement.'

This is where the vendor agrees not to seek, or accept, other offers from other buyers for a certain short period.

While this can help demonstrate how serious you are, the issue you may have is getting the seller to sign it.

Talk to your solicitor to find out what’s involved – and the potential cost of drawing up one of these agreements. But be warned that it can get fairly complex.

1. Take out specialist insurance

In addition, you might want to look into taking out Home Buyers Protection Insurance.

A policy covers you for the loss of upfront expenses you’ve made in good faith to purchase a property (such as legal, survey and mortgage lending costs), in the event of the purchase falling through.

1. Considering buying at auction

Buying at auction means there is no risk of gazumping – but it does come with a lot of different risks – so don’t make any hasty decisions, as you need to go in with your eyes firmly open.

So that concludes this episode of Ask the Estate Agent Podcast. You can contact us anytime using the links below:

Facebook: www.facebook.com/asktheestateagent

Instagram: www.instagram.com/asktheestateagent

Twitter: www.twitter.com/asktheEA

Website: www.asktheestateagent.co.uk

Please don’t forget to contact us with any subjects you would like us to cover or questions you would like answering in the coming episodes and until next time I would like to thank you for listening and goodbye for now.

Source: Zoopla

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