Thursday, 22 November 2018

The £6,218,153 Ticking Time Bomb for Warrington Landlords





I just love looking over and keeping up to date the 108 pieces of legislation that govern the rental of residential property in the UK  
...No Warrington Landlord, ever
 
If you are one of the 3,194 Warrington landlord’s that manages your own property, would it surprise you to know that there are 108 separate pieces of legislation that govern the rental of private houses to tenants. Oh, and on top of the 108 pieces of law, there are further 300+ regulations in the mix. Whilst Warrington landlords may once have preferred to manage their Warrington buy-to-let properties themselves to boost their profits, many Warrington landlords are starting to see this as a false economy.

In the last four years, an additional 1,228 landlords in Warrington have converted from self-managed to having their property managed by a letting agent in Warrington, taking the total number of properties under management in Warrington to 4,995 (out of a total of 8,189 private rental properties in Warrington).

Now, don’t get me wrong, self-managing your Warrington rental property can be a very fulfilling experience, allowing you, as a Warrington landlord, to build a deep relationship with your tenant and your emergency 24 hour plumber, builder (happy to do small jobs at a drop of a hat), decorators, first name terms with their deposit provider, lawyer and EPC provider to name but a few. (Wow!)

Also, did you know if your tenants deposit isn’t registered, or doesn’t continue to be registered after the end the periodic tenancy upon renewal ... you could be fined up to three times your deposit? With the average rental deposit in Warrington being £649, each self-managed landlord in Warrington could be fined £1,947 per tenancy if the deposit isn’t currently registered. Therefore...

...if every deposit of every Warrington self-managed landlord’s property wasn’t registered, the total fines would amount to £6,218,153

Now of course, I am not suggesting for one minute all the self-managed landlords of Warrington haven’t registered their deposits, yet almost on a daily basis, I come across horror stories to that effect. Another two (but by no means all) hot issues that the Courts are cracking down on, are doing immigration ‘Right To Rent’ checks on all tenants (yes all tenants) and confirmation proving the tenant received the ‘How to Rent’ guide. If that second issue cannot be proved (a ‘sent’ email won’t suffice), the landlord cannot serve the section 21 Notice, meaning the tenant cannot be served notice to vacate the property.

To many, it’s really a case of DIY or getting a qualified professional in … as those additional Warrington landlords mentioned above have done since 2014. You might say, “Of course you are going to say all this – you are a Letting Agent”. Well the choice really comes down to your time and your knowledge. If a Warrington landlord is not equipped, or able, to devote time keeping up-to-date of legislation and law nor doesn’t want to be bothered 24/7/365 about a blown light bulb, dripping taps, have that confrontational conversation with their tenants about missing rental payments, or arbitrate arguments and disagreements between your tenant and the neighbours, it is perhaps better to pass this accountability/responsibility onto a letting agent.

One thing I would say is all letting agents aren’t the same. Would it surprise you to know that letting agents aren’t regulated?

Warrington landlords that do use a letting agent should not forget that passing over management to a letting agent doesn’t mean they can disregard legislation and they are still responsible for deposit/rent repayment legal directives, civil fines or action if the letting agent makes a mistake. Therefore, it’s important to pick a respectable letting agent from the start.

Nevertheless, for those Warrington landlords that see their job as a professional landlord and want to be intricately involved in the day to day administration of their rental properties, it can be worthy pursuit.

If you are a self-managed landlord in Warrington, and want to know if your paperwork is in order please feel free to drop me a line and I am more than happy to do an ‘MOT’ on it to ensure you are the right side of the law.


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 G5, Warrington Business Park, Long Lane, WA2 8TX. There is plenty of free parking and the kettle is always on.

Thursday, 8 November 2018

Warrington House Prices vs Warrington Rents since 2006




The Warrington housing market is a fascinating beast and has been particularly interesting since the Credit Crunch of 2008/9 with the subsequent property market crash. There is currently some talk of a ‘property bubble’ nationally as Brexit seems to be the ‘go-to’ excuse for every issue in the Country. Upon saying that, looking at both what we do as an agent, and chatting with my fellow property professionals in Warrington, the market has certainly changed for both buyers and sellers alike (be they Warrington buy to let landlords, Warrington first time buyers or Warrington owner occupiers looking to make the move up the Warrington property ladder).

Warrington house values are 4.25% higher than a year ago, and the rents Warrington tenants have to pay are 1.1% higher than a year ago

When we compare little old Warrington to the national picture, national property values have risen by 0.4% compared to last month and risen by 3.0% compared to a year ago, and this will surprise you even more, as nationally, property values are 19.8% higher than January 2015 (compared to 11.4% higher in the EU in the same time frame).

However, if we look further back...

Since 2006, Warrington house values are 23.24% higher, yet the rents Warrington tenants have had to pay for their Warrington rental property are 14.9% higher

...which sounds a lot, yet UK inflation in those 12 years has been 42%, meaning Warrington tenants are 27.1% better off in ‘real spending power terms’.

Looking at the graph, the rental changes have been much gentler than the roller coaster ride of property values. I particularly want to bring to your attention the dip in Warrington house values (in red) in the years of 2008 and 2009 ... yet as Warrington property values started to rise after the summer of 2009, see how Warrington rents dipped 6/12 months later (the yellow bars)…. Fascinating!



So, we have a win for tenants and a win for the homeowners, as they are also happy due to the increase in the value of their Warrington property.

However, maybe an even more interesting point is for the long-term Warrington buy to let landlords. The performance of Warrington rental income vs Warrington house values has seen the resultant yields drop over time (if house prices rise quicker than rents – yields drop).

Whilst, it’s true Warrington landlords have benefited from decent capital growth over the last decade –with the new tax rules for landlords – now more than ever, it’s so important to maximise one’s yields to ensure the long term health of your Warrington buy to let portfolio. More and more I am sitting down with both Warrington landlords of mine and landlords of other agents who might not be trained in these skills - to carry out an MOT style check on their Warrington portfolio, to ensure your investment will meet your future needs of capital growth and income. If you don’t want to miss out on such a MOT check up, drop me a line – what have you got to lose? 30 minutes of time against peace of mind - the choice is yours.

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 G5, Warrington Business Park, Long Lane, WA2 8TX. There is plenty of free parking and the kettle is always on.