Warrington Property Blog: February 2017

Thursday, 23 February 2017

What risks are Warrington’s Accidental Landlords taking?

In today’s economy, there are plenty of tricks you can use to save money, but some landlords are taking that a step further. According to research from LV landlord insurance, there is a surge in ‘accidental’ landlords across Warrington as people are attempting to boost their income by letting properties privately to save on agency fees.

An Overview of Britain’s Landlords

Over 7% of adults in Britain rent out a property to help to supplement their income and receive an average of £678 per month. This equates to almost £28bn per annum across the country.

Landlords in London and the South East collect the highest (average) rents at £1,079 and £819 respectively. This is followed by the West Midlands at £678 and then East Anglia at £676.

The driving force behind this trend of 55% of accidental landlords (renting out property they never intended to) varies, from wanting a bigger property (15%), moving for work (10%) or even wanting a garden (6%)! Another 6% of landlords say they ended up renting out a property because they moved in with a partner and didn’t want to or couldn’t sell their own.

Landlord Responsibilities

Whatever the reason may be, all Warrington landlords must comply with current regulations and legislation.

All landlords must ensure that gas equipment (boilers, cookers, etc) are installed and checked annually by a registered Gas Safe engineer. All electrical installations must be safe. Tenant deposits must be held in a deposit protection scheme and some local authorities have mandatory licensing for landlords.

A managing agent will usually take responsibility to ensure that all legislation is complied with, for a fee, as well as check tenants and manage the rent collection, repairs, inspections and deal with the end of a tenancy. Almost half of today’s amateur landlords manage their rental property on their own and do not have such protection.

Of those self managing their properties, 27% have not had a gas safety check in the past twelve months and risk being prosecuted and fined up to £20,000.

Non-Compliance

As well as exposing themselves to fines from the local authority, Warrington landlords could find themselves heavily out of pocket if one of their tenants decides to make a claim against them. For example, a landlord could be sued by someone who falls and is injured because a pathway has not been maintained.

Landlords can also be liable for damage to adjacent properties, such as an overflowing gutter causing water damage to a neighbouring house. Analysis of the data shows that the number of liability claims being made against property owners has been steadily increasing in recent years.

Other Impacts

The insurance needs of a rented property are very different to those of an owner-occupied home. Standard home buildings insurance will not usually cover homes that are tenanted. Almost a third (32%) of Warrington landlords say their rental property has been damaged at some point and has had to be repaired, which has cost them £1,200 on average. Of those who have had their property damaged, the main cause has been damage by tenants (44%), followed by flooding (17%) and storm damage (8%). 19% of those who rent out houses – equivalent to over 400,000 landlords(UK) - do not have appropriate insurance in place and might not be covered should the worst happen.

Renting out a property can be a great way to cover your costs if you are unable to sell or want to hold on to a home and make some extra money from it, but it is not without risk. In order to mitigate those risks, we would always advise that you speak to a reputable agent who will help to guide you and show you how to protect yourself against many risks you may not have even considered.

If you are looking for an agent that is well established, professional and communicative, then contact us to find out how we can get the best out of your investment property.

Email me on manoj@hamletwarrington.co.uk or call on 01925 235338. If you are in the area, feel free to pop into the office – we are based on 6 Bankside, Crosfield St, WA1 1UP. There is plenty of free parking and the kettle is always on.

Don't forget to visit the links below to view back dated deals and Warrington Property News.

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Thursday, 16 February 2017

Warrington First Time Buyers Borrowed £133.8m in the Last 12 Months

It might surprise you that first time buyers in 2017 will benefit from a slight decline in Warrington buy-to-let investors.

Starting with the bigger picture, over the last 12 months in the UK, 1,061,557 properties were sold with a total value of £223.74 billion. To give that some context, ten years ago 1,581,727 properties sold with a total value of £405.56 billion, so it can be seen the number of people moving house has dropped by over a third in the last decade.

Whether you are a landlord, homeowner or tenant, it’s always important to keep an eye on the Warrington property market. Over the last 12 months, 2,784 properties have sold (and completed) in Warrington, worth £522.9 million. Interestingly, the number of properties changing hands in Warrington has also dropped when compared to a decade ago.

How will the general Property Market be different in the coming months?

Those looking to buy a home in the spring and summer of 2017 will face a far less competitive Warrington property market than the same time of year in 2016, when the urgency to beat the buy-to-let stamp duty hike was in full swing.

Many landlords brought forward their purchases to beat the tax changes. Since the change, the number of buy-to-let purchases has dropped slightly. First time buyers have taken advantage of that and have increased their buying. In fact, looking at the Bank of England figures, this is what UK lenders have lent on buy-to-let properties versus first time buyers over the last 12 months:

Q4 2015 - £1bn buy-to-let mortgages vs £1.31bn for first time buyers

Q1 2016 - £1.35bn buy-to-let mortgages vs £1.08bn for first time buyers

Q2 2016 - £760m buy-to-let mortgages vs £1.28bn for first time buyers

Q3 2016 - £827m buy-to-let mortgages vs £1.42bn for first time buyers

What about the Warrington Property Market?

When looking at the figures for Warrington itself, first time buyers have borrowed more than £133.8 million in the last 12 months to buy their first home. This is a ringing endorsement of their confidence in their jobs and the local Warrington economy. Those 20 and 30 something’s who are considering being first time buyers in 2017 will find that the number of properties on the market has never been as good as it has for quite a while, meaning you have more choice and less competition than a year ago.

Rightmove announced nationally that new seller enquiries are 26% up on the same time last year, giving an indication that we may see a slight ease in the lack of properties on the market. When I look at the Warrington market, at this moment in time there are an impressive 530 properties for sale, so plenty of choice.

All this will be welcome news amongst Warrington first-time buyers with a combination of a proportional reduction in new investors and landlords.

2017 will be an interesting year for all homeowners, be that buy-to-let landlords, existing homeowners or future homeowners. If you are looking for an agent that is well established, professional and communicative, then contact us to find out how we can get the best out of your investment property.

Don't forget to visit the links below to view back dated deals and Warrington Property News.

Thursday, 9 February 2017

Should you still be investing in Warrington Buy to Let Property?

If I were a buy to let landlord in Warrington today, I might feel a little bruised by the assault made on my wallet after the last 12 months by HM Treasury’s tax changes on buy to let. With 18,046 people in private rented properties in Warrington – is the market now saturated?

To add insult to injury, Brexit has caused a tempering of the Warrington property market with property prices not increasing by the levels we have seen in the last few years. I think we might even see a very slight drop in property prices this year. If that does happen, first time buyers could be attracted back into the Warrington property market; meaning less demand for renting and a decrease in average rents.

Yet, before we all run for the hills, all these things could be serendipitous to every Warrington landlord, almost a blessing in disguise.

Warrington has a population of 163,873, so when I looked at the number of people who lived in private rented accommodation, the numbers astounded me …

Yields will rise if Warrington property prices fall, which will also make it easier to obtain a buy to let mortgage, as the income would cover more of the interest cost. If property values level off or come down, that could help Warrington landlords add to their portfolio. Rental demand in Warrington is expected to stay solid and may even see an improvement if uncertainty is protracted.

However, there is something even more important that Warrington landlords should be aware of: the change in the anthropological nature of these 20 something potential first time buyers.

I got chatting with my wife’s nephew and his partner at a family get together. Both are in their mid/late twenties, both have decent jobs in Warrington and they rent. Yet, here was the bombshell, they were planning to rent for the foreseeable future with no plans to even save for a deposit, let alone buy a property! I enquired why they weren’t planning to buy and the answer surprised me.

They don’t want to put cash into property, as they would rather spend it on living and socialising –going on nice holidays and buying the latest tech and gadgets. They want the flexibility to live where they choose and they don’t like the idea of paying for repairs. All their friends feel the same. I was quite taken aback that buying a house is just not top of the list for these youngsters.

So, as 11.0% of Warrington people are in rented accommodation and as that figure is set to grow over the next decade, now might just be a good time to buy property in Warrington – because what else are you going to invest in? Give your money to the stock market run by sharp suited city whizz kids – because at least with property – it’s something you can touch - there is nothing like bricks and mortar!

If you are looking for an agent that is well established, professional and communicative, then contact us to find out how we can get the best out of your investment property.

Don't forget to visit the links below to view back dated deals and Warrington Property News.

Thursday, 2 February 2017

Ask Andy – “What documents do I need for my Warrington property in order to move a tenant in?”

Landlord’s Question:

‘’Dear Andy,

I have just bought my first buy-to-let property in Warrington – a three bed semi detached in Great Sankey. I’ve done my research and know what tenants I can attract and what price I can expect per month for my property, but I’m confused as to what documents I need to rent my property out.

What documents and checks do I need to do before I move a tenant in?

-Steve’’

Andy’s Answer

You’ve taken the first big leap of buying a property to let, but there are still more legal hurdles to jump when it comes to renting your house and making sure it is safe for a tenant to live in.

Some of the ones I’ve listed are legally required and help to ensure your tenant’s safety. Others are recommended as best practice.

Gas Safety Certificate

As a landlord, you have a legal responsibility to instruct a Gas Safety registered engineer to carry out the checks and produce a certificate. You need to give this certificate to the tenant when they move in. You also need to make sure that you have a gas safety check done once a year thereafter.

Legionella Risk Assessment

Landlords are responsible for keeping properties safe and free from health hazards – including legionella. Legionella is a bacterium found in water which causes Legionnaires Disease (a pneumonia type of disease).

As a landlord, your responsibility is to have a competent person carry out a risk assessment to assess the risk of exposure to Legionella to ensure the safety of your tenants. You can carry out the assessment yourself, but you must ensure you know what you are doing. It may be safest to use a contractor to carry this out if you are unsure, for the time being.

Energy Performance Certificate

This certificate is to check the energy efficiency of your property. They last for ten years and grade your property on their efficiency. You should have one from the sale of the property.

As of 1^st April 2016, tenants can request consent from their landlords to carry out energy efficiency improvements to their properties if they follow a set process. Should this happen, you can’t reasonably refuse the request; however, the request should have no cost to the landlord (unless you agreed to pay towards the works).

From April 2018, your property will need to have a minimum rating of E, which means a lot of older and poorly insulated properties may struggle.

Electrical Certificates or PAT Tests

Electrical Certificates are not currently legally required of a landlord yet, but it is legally required that your electrical installations are safe when the tenancy begins and are in proper working order throughout the tenancy. It’s recommended that you have a professional carry out the electrical certificate every five years, or upon changing of tenants.

In single let residential property, there is no legal obligation to carry out a PAT test, but it may be something you wish to do if you have provided portable appliances. If you don’t have a PAT test or an electrical cert carried out, you should check that all your electrical installations are visually adequate (no cracks to sockets or burn marks, etc.).

Smoke and Carbon Monoxide Alarms

At least one smoke alarm is required per floor of a property and you must carry out a check to ensure that the alarms installed are in proper working order on the day a new tenancy begins. Other than that, it is recommended that you follow manufacturer’s instructions when it comes to placement of the alarms.

Carbon Monoxide (CO) alarms are only legally required where there is a solid fuel burning appliance (e.g. a log burner). As gas is not a solid fuel, there is no requirement, but they are recommended in close proximity to a gas boiler as best practice.

These are the legal (or recommended) documents which are required when letting your house as a single dwelling. As you can see, there’s a lot to think about when preparing your Warrington Property!

If you are looking for an agent with experience that can help you prepare your property and find the best tenants for it, then contact us to find out how we can get the best out of your investment property.

Email me on andy@hamletwarrington.co.uk or give me a call on 01925 235 338. Pop in for a chat – we are based on 6 Bankside, Crosfield St, WA1 1UP. There is plenty of free parking and the kettle is always on.

-Andy

Don't forget to visit the links below to view back dated deals and Warrington Property News.

About Me

I have been in the Warrington property market since 2004, owning and running, the Hamlet Homes office in Warrington with my excellent team.

I have always shared my thoughts on the local property market in Warrington with my landlords, but now I want to share with everyone with an interest in property in Warrington.

In my blog, I will talk about what is happening in the Warrington property market itself, even looking at specific streets or housing estates. At other times, I will post what I consider decent buy to let deals. I like to look at the whole of market and give you, what I consider to be, the best buy opportunities.

If you see a potential deal, and want a second opinion, email the link to manoj@hamletwarrington.co.uk and I will always give you my honest opinion on the property and its investment potential – good or bad.