Category: Landlord Link Blog

Landlords have been heard saying that yield and capital gains are less important than remaining cash-flow neutral – that is, where a tenant pays the mortgage and, at the end of the mortgage period, the investor owns the property for what is essentially the cost of the deposit.

One place, however, where rental income still remains an attractive proposition in its own right is Glasgow, where properties are much more affordable than elsewhere and rental ratios are keeping their heads up.

This is in marked contrast to other UK areas – particularly already overheated markets such as London and the South East – where rental income on low-yielding properties is likely to be lower relative to investors’ mortgage costs.

The recent quarterly rental report by Citylets found that rents in Scotland as a whole had increased 2.1% in the first quarter of 2016 compared to the previous 12 months. In the Glasgow metropolitan area, the increase was higher at 4.6% in the year, with one-bedroom properties rising even faster at 8.8%.

Read our guide to the best areas for buy-to-let in Glasgow >

In real money, that makes the average monthly rent for a one-bedroom property now £546, with a two-bedroom property on average renting out for £721 and three-bedroom going on average for £991 a month.

There is evidence that almost every flat which becomes available for rent in Glasgow is attracting between eight to ten individual applicants, and agents are having to turn away potential quality tenants.

Some agents are even reporting that landlords in Edinburgh – itself a hotspot – are being attracted to Glasgow because it offers better value. Yes, rents are lower, but so are prices, so returns remain beguiling.

Our view at Douglas Dickson is that there continues to be a real shortage of supply of good quality, well managed rental properties in the Glasgow area and a high tenant demand.

Douglas Dickson is achieving rent increases for its landlords and renting most properties back-to-back without any void periods. This is good news for landlords and for those who are considering becoming landlords in Glasgow.

Neil Livingstone is a director of Douglas Dickson Property Management Limited.

Scotland is an increasingly popular place for university students to study, leading to more demand for student housing in Scotland. So how can landlords take advantage of the trend and profit from Scottish student housing?

Scottish universities present a number of attractions to prospective students, perhaps more so than ever before. There is – of course – the unavoidable draw of free education for non-UK EU residents, although there is much more to it than that.

With a number of vibrant and evolving cities, a blossoming music scene and a wealth of history and culture, increasing numbers of young people are being switched on to the benefits of studying in Scotland. Recent figures suggest that overall enrolment is up by around 3%. Scottish universities like Glasgow are planning huge expansion and all those students will need somewhere to live – and that’s where student house landlords come in. Will you be among them?

It is a relatively common trend that new university applicants will spend their first year of study in halls of residence or privately owned student building. However, just a couple of months into that first year, they are already being urged by tutors, parents and peers to begin the hunt for their second year accommodation.

This is one area in which Scottish university cities have failed to keep up with the ever-growing influx of students. The numbers of suitable rental accommodation properties for these young people looking to share with friends and fellow students isn’t coping with the high levels of demand.

So what are students looking for in their rental accommodation? Firstly and most importantly, you will need to be flexible with your lease agreements; most students attend lectures from late September until late in May or early June. This means that a large majority spend at least two months of the year working on placements, going travelling or returning home to their parents’ house.

Students today are more discerning than they might have been in the past. To ensure your property is desirable and rents out quickly, make sure you’re providing all the amenities that they need. Top of the list is fast, reliable wifi, but private bathrooms, double beds and good quality furniture are also hugely important.

Allowing them to sign a nine or ten month contract saves them money (a big factor for students) but also gives you time to recruit new tenants for the following academic year. It means a loss of income over summer, of course, but the yield on student properties is such that you will still be doing well in the long-run.

If your student house is particularly well located and well cared-for then you may even be able to rent it out for summer school accommodation or for short term holiday rentals.

Students also care about the layout of the property more than you would think. Students require their own private, lockable rooms but being the social creatures that they are, they will want suitable and sizeable communal areas to live the active lifestyle that they are well known for.

In recent years, acquiring property and converting into student-friendly accommodation has been a lucrative market: this is still the case. There are many student property specialists who can help you with this if you so require.

They way in which rent payments generally work for student housing is that each tenant will be charged individually. This can result in an amount of extra administration work for yourself or for your property management company but pricing on these properties usually brings in a much more appealing gross income for yourself as the landlord.

The Landlord Link currently has a number of properties available in Scotland. If you wish to get involved in this growing market, have a look here: Rental properties in Scotland.

With the Winter weather closing in, there are certain precautions that all landlords should take in order to make their property resistant to potential seasonal issues. You may already have taken many of these measures but we have pulled together the latest advice to ensure that you are best placed to avoid any long-term problems.

1. Service your boiler

If you don’t have an annual service planned already, paying to have one carried out now will drastically reduce the chance of a costly breakdown caused by the surge in usage during the colder months.

2. Check the pipes

External pipes are particularly exposed and prone to problems caused by freezing conditions. Repair any breaks, leaks or cracks before they lead to bigger water problems.

3. Insulate

It isn’t always cheap but insulating your property efficiently will save you a fortune in the long run.  Focus on water pipes, drafts around doors and windows and also attic areas. This will pay off as the property stays far warmer, particularly if you’re the one picking up the heating bill.

4. Bleed the radiators

Releasing the trapped air from all radiators will make them far more effective. In truth, this should be done regularly throughout the year anyway.

5. Clear gutters

In the lead up to Winter, leaves and debris will almost certainly collect in your gutters. This is bound to cause overflows and water damage – not something you want to be dealing with. Also consider trimming any overhanging branches to avoid ongoing clogging of the gutter pipes.

6. Inform your tenants

Some tenants will know exactly how to look after their rented home during the cold season – others won’t. Provide them with information on boiler operation and point them in the direction of the property’s stopcocks; that way, they should be able to mitigate any potential disasters.

7. Visit!

There are a couple of parts to this one. Firstly, pay a visit to the property to give it a once-over. This gives you a chance to check all of the measures above have been carried out but also to pick up on any other minor issues which could be repaired and prevented before they lead to bigger problems during the harshest period of the year.
Secondly, if your tenants are going to leave the property vacant for any period of time (going home for Christmas, for example), then the property is going to be more vulnerable to weather-induced damage. Arrange for a regular visit to check everything is in order; have a look at the heating, open the windows for a while, check for condensation or leaks – it pays to catch these things early.

Hopefully these tips will help you to protect your property against the challenges of the Winter months. For any further queries, feel free to contact us at: enquiries@thelandlordlink.co.uk

Here at The Landlord Link, we’re always on the lookout for products and organisations which may help to make your life as a landlord just that little bit easier. It’s for this reason that Welsh Landlords caught our attention. Offering a range of convenient services, they aim to provide a platform for information sharing which can be utilised by any property owners in Wales.

The owners of Welsh Landlords come from a background in property ownership and having received poor advice from agencies in the past, made the decision that a transparent and unbiased site for this information to be shared was a service that landlords would truly appreciate.

They pride themselves on being run with no vested interest and with no subscription fees, so that details and services can be shared honestly, with no hidden surprises.

The main attraction of Welsh Landlords’ website is their directory, which allows landlords to browse a range of recommended services including property management organisations, cleaning companies and removals, amongst many others.

The website and associated social media platforms are useful for landlords who reside in Wales but perhaps especially so for those who simply own property there and lack some of the local knowledge required when it comes to services in the area. This is where Welsh Landlords aims to provide factual and helpful information.

If Welsh property is of interest to you, or you already own property over the border, visit www.welsh-landlords.com or www.welshlandlordsdirectory.com for more information.

Late last month, the primary rail station in England’s second biggest city unveiled the results of a £750m investment to redesign, revive and relaunch the city centre hub. Birmingham New Street Station services 170,000 commuters, tourists and visitors every single day but the out-dated design and state of disrepair has led to the receipt of unwelcome accolades such as ‘UK’s Ugliest Single Building 2003’ and the lowest score of all UK stations in a survey of overall satisfaction just last year.

Read The Landlord Link guide to buy-to-let in Birmingham >

Following five years of behind-the-scenes work and huge financial input, New Street now has plenty more to offer. Developers promise that rather than merely bringing it up to standard, the improvements will propel New Street towards being the busiest and most welcoming transport facility outside of London.

Whilst the previous look of Birmingham New Street Station was centred very much around concrete and steel, the new design includes a football pitch-sized atrium which allows for ample natural light. The entire passenger concourse is now five times the size of that at London Euston and a vast number of escalators and lifts have been installed to allow for easier access between platforms. These additions are aimed at improving the experience of all passengers utilising the station.

Rental properties for sale in Birmingham on The Landlord Link >

With a view to creating the ultimate in retail convenience, the project has also included the opening of Grand Central – nearly 500,000sq ft. of shopping and dining space – directly above the refurbished train station.

One of the largest John Lewis stores outside of the capital will act as the ‘anchor’ store in the development, alongside other leading names such as Foyles, The White Company, Hobbs, Kiehls and Paperchase. Eateries and refreshment stops include Fuel Juice Café, Caffé Concerto, Tapas Revolution, Pho, Giraffe and Yaki Nori.

Whilst Birmingham has always been a city with plenty going on, the culmination of years of regeneration work is an end product which will undoubtedly attract more commuters, visitors and students than ever before. The new ease of transport, coupled with the range of retail options now on offer has generated a real vibrancy in a city which has sometimes struggled to shift its reputation as being “grey” or “industrial”.

With all of this, plus Birmingham’s existing attractions such as the NEC Exhibition Centres, Cadbury World, Science Museum and one of the best sets of Christmas markets in the UK, there is a genuine buzz around the area. It seems that this Midlands city will be a real hotspot for residents, professionals and investors over the coming years.

Voted ‘Most Liveable City in the UK’ in 2013, Manchester’s growing popularity shows no signs of slowing down. So why is it that demand for property in Manchester is so high? And more to the point, should you be getting involved with buy-to-let property in Manchester? The Landlord Link takes a look to help make up your mind.

One major draw for investors is the rise in average house prices in the area. Greater Manchester and Salford saw an increase of 12% in average house prices last year, almost double that of the 6.5% national average. In parts of the region, housing prices are still 40% below the housing peak of 2008 whilst those in London are up to 40% above; this gap can only be expected to shorten in the coming years.

The economy in Manchester is also expanding at an immeasurable rate. The creation of Media City at Salford Quays has not only generated a blossoming entertainment sector but brought with it an influx in bars, restaurants, cafes and a range of other industries.

Manchester has the largest travel-to-work area of any region in the UK, outside of London – seven million people live within one hour’s drive of the city centre. With HS2 developments linking the North & South further still, and the infrastructure in Manchester being grown from within, Manchester continues to establish itself as one of the UK’s major economic powerhouses.

For buy-to-let landlords, possibly the most crucial factor of all is the average rental yield of around 8%. Occupancy in the city currently stands at 96% and agencies across Manchester are reporting that the rental market is operating at a maximal level. The population of the Greater Manchester region is rising year-on-year at a rate not matched by property development.

There are other factors which ensure that demand for rental property will always be high; three large universities and one of the biggest international student populations in the UK, two of the country’s most successful football teams and a far-reaching airport are just a few of the attractions that will keep tenants flocking back to Manchester.

With everything very much on the up and no indications that this is likely to change in the immediate future, it is certainly an exciting time for those investing in buy-to-let property in Manchester.

Read our guide to the best areas for buy-to-let in Manchester

View properties listed for sale in Manchester here.

New legal requirements with regards to smoke alarms and carbon monoxide alarms come into effect from October 1^st 2015 but what exactly does this mean for landlords? The Landlord Link has taken a look at this new legislation to help you ensure that you are complying.

The measures were announced by Housing Minister, Brandon Lewis, back in March 2015. To summarise, landlords are expected to install smoke alarms and carbon monoxide alarms throughout their properties, bringing the law for rented properties in line with that already in place for new builds.

Predicted government figures state that they hope to prevent 26 deaths per year – as well as 670 injuries – through the new legislation.

What is Required of Landlords?

Landlords will need to install a smoke alarm on every floor of a rented property. They will also be required to install carbon monoxide alarms in any high-risk areas; any room in which there is a wood or fuel burning appliance falls into this category.

The landlord is responsible for checking that all alarms are in working order before the commencement of every tenancy and it is then the tenant’s responsibility to check these on a weekly basis for the duration of their contract.

Landlords who fail to comply with the new legislation face a civil penalty of up to £5000.

Where Should I Install the Smoke Alarms?

If you are installing one smoke alarm on each floor, this should be positioned in an area of circulation, where it can be heard from anywhere in the home. The fitting should be secured to the ceiling, no closer than 300mm to any walls or light fittings.

Whilst this is the minimum requirement, maximum safety is achieved by fitting a smoke alarm in every room of the house, barring the kitchen and bathrooms; these areas are prone to false alarms and a heat alarm is a much more reliable alternative.

Carbon monoxide alarms should be fitted at head or ‘breathing’ height, whether this is a wall-mounted alarm or a portable device.

What Type of Alarm Should I Get?

Mains powered smoke alarms are your safest option. With battery powered fittings, there is the very real possibility that your tenant will choose to remove the batteries either to prevent false alarms or simply because they need batteries elsewhere in the house, and don’t fancy a walk down to the petrol station. If you do opt for batteries, select a sealed-in battery set up to eliminate this temptation.

Another benefit of battery powered systems is that you can have all of the alarms in your property interconnected, to maximise the efficiency of the system.

Carbon monoxide alarms should create an alert both visually and audibly when the carbon monoxide levels in the air tip the scales into being at a dangerous level. These can also be linked into your mains powered smoke alarm set up.

Where Do I Get Smoke and Carbon Monoxide Alarms From?

Following the announcement of the new legislation, the Government supplied local fire and rescue services with 500,000 smoke alarms and 52,000 carbon monoxide detectors to be distributed to landlords free of charge. Get in touch with your local station – if you’re lucky, they may still have alarms left to send your way.

Failing that, The Landlord Link recommends that you invest in high quality detectors for all of your properties – the last thing you need is to be replacing them every couple of years to stay in line with your legal obligations.

Check out more advice for landlords on The Landlord Link blog.

Remember, if you’re selling a rental property or buying a new buy-to-let property, you can buy and sell for free, landlord to landlord, on The Landlord Link. Get in touch to find out more.

In the rental market first impressions really do count when it comes to letting your property. Use our pre-letting checklist for landlords to make sure your property is ready to rent – and ready to achieve the best yields possible for the property.

Many landlords plough all of their resources into their property’s interior and completely ignore the importance of the exterior. While it’s true that the bulk of your time should be spent on the inside, you should always consider the importance of the outside too!

Approach

People usually form their first impression within 20 seconds of arriving at a property. If the outside is a little shabby and untidy then in some cases, this could be a reflection of the inside. The front of a property is a good place to spend a little extra time and money. If the property has a front garden, make sure it is free of litter, neat and presentable.

Exterior

The front elevation is important as people often drive past the property first before deciding to view. Peeling paint on your property’s exterior isn’t very appealing, so a fresh coat of paint will do wonders. In some cases it may be difficult to work on the exterior of your property, if it’s in a block for example. Even so, first impressions still count, so the front door and hallway should be the main focus for these types of property.

Interior

Tenants are looking for somewhere that they can imagine just moving into and setting up home, so any hint of extra work on their part will put them off straight away. There is no doubt that an immaculately decorated and fitted property will let faster and for more money than one that isn’t. If only one room is redecorated and not the rest of the house this can look odd. That said, some rooms, like kitchens and bathrooms are more important to tenants than others.

Equally if there are obvious faults that can be readily put right it is worth making sure these are attended to. You want all prospective Tenants to see a neat, clean, well-lit interior.

Get clutter out of sight, ensure the carpets are clean and floors are scrubbed. Make sure all your lights work and replace light bulbs if need be.

Tidiness/Cleanliness

You want the property to look spacious, bright and fresh to entice tenants. Make sure that your property is professionally cleaned or cleaned to a professional standard prior to the start of the tenancy. If you are residing at the property prior to letting or if tenants are still in situ for viewings, ensure that the property is as tidy as possible to get give the best impression.

Tenant Information Pack

Put together a folder – including operating manuals, service records and guarantees for the central heating and appliances you are leaving, together with other information you feel will be useful for your tenant e.g. refuse collection days, details of a local window cleaner, etc.

Keep on top of it

Once you have upgraded or improved your property, keeping costs down is a long-term job. The more regularly you are able to address small issues, the less you will need to spend on an overhaul after each tenancy. A little can go a long way to help ensure you achieve and maintain the best possible rental price for your property.

Property investment and buy-to-let is an attractive idea for lots of us, but it’s important to know exactly what you’re getting into.

At The Landlord Link we’re experts on buy-to-let and everything that goes with being a landlord. Here are our top tips for your first buy-to-let.

Advice for new buy-to-let landlords

If you’re a new buy-to-let landlord, or thinking of taking the first steps into property invesment, these are the things you must consider.

1. Understand your finances

Keep in mind whether you are in the market for capital gain when you sell or simply monthly rental income. This will help you decide what to buy, where to buy and what kind of mortgage you need.

2. Buy carefully

Make sure you buy a property which allows for sufficient profit margin. Do not go for a ‘bargain’ property which may turn into a money pit very quickly. Major repairs require much time and effort, so paying more for a property which is in better condition can be a wise move.

3. Do the maths

You will need to budget carefully, check the cost of the property and the rent you are likely to receive by speaking to local agents. Most Buy-to-Let lenders will want rent to cover 125% of the monthly mortgage repayment. You will need a deposit of at least 25% to secure a reasonable deal. Don’t forget to factor in any future rate rises and an emergency fund that will cover you for void periods (when tenants are not living in the property). Try to be realistic, what would happen if the property is empty for a couple of months or interest rates rise?

4. Location

This is still one of the most important factors when deciding where to buy property. Do some research, check the neighbourhood and make sure that you find a property that will appeal to tenants. Good transport links are useful, as are the availability of good schools and local shops.

Towns that have major companies, hospitals and universities will always be popular with investors as there will be plentiful demand for rental property from office workers, nurses and students. A good location will increase your chances of getting a tenant sooner.

5. Step out of your comfort zone

It may be tempting to choose a location you know well but is it the ideal neighbourhood to invest in?  Cast your net further, there may be up and coming areas showing greater promise, such as a university town or suburb with an excellent school catchment that would appeal to families. Take a look at our article on the best areas for buy-to-let in 2020 for some ideas.

A great place to look for buy-to-let properties for sale is on The Landlord Link’s own rental property listings. In many cases these properties are already tenanted, sometimes with extremely reliable tenants that have lived in the property for several years.

If you’re looking for the easiest-possible way to get into buy-to-let then buying an already-tenanted property is a great way to start.

6. Consider your ideal tenant

Establish the type of tenant you want to attract and then furnish it to appeal to them. For example, students are likely to want an unpretentious, clean and comfortable property while a young professional may prefer a stylish, blank canvas they can make their own mark on.

7. Negotiate on price

As a Buy-to-Let investor you are in a strong position to negotiate a discount on the selling price, as you are not part of a chain and there is less risk of a sale falling through which means a great deal to a person selling their property.

8. Prepare for voids

Your property may be empty and not generate any income for periods of time, so you need to be ready for this.  Advertising for new tenants, painting walls and replacing carpets can take months off your lettings calendar and you should have a plan in place for when this happens.

9. Check for safety

By law you must make sure that the property you are letting complies with various safety regulations, like furniture and furnishings fire safety, gas safety, electrical equipment safety and that it contains a smoke detector. You’ll also need certificates to prove these regulations have been met. Be aware of new and updated regulations as and when they arise. Failure to comply with the law can result in serious consequences.

10. Know your responsibilities

As a landlord you will be expected to pay buildings insurance, ground rent, service charges and insure any items you leave in the property.

11. Refurbishment

Don’t make the mistake of decorating and furnishing the property to your own tastes – keep it simple and neutral with clean lines. Magnolia for walls and white for kitchens and bathrooms. You are there to make money out of the property, so keep your market firmly in mind.

12. Produce a detailed inventory

This is especially important should you decide to furnish your property. The inventory is your only proof of how the property was provided for at the outset and should accurately describe in fine detail everything in it.

13. Recruit a managing or letting agent

Choosing between a DIY approach to property management and a management company is an important decision. ou will need to consider how involved you want to be.  Being a landlord is like running a small business, you may want to be 100% hands-on or if time is precious, you may decide to employ the services of an agent.

A good agent will source tenants, draw up leases, collect rent, inspect the property and undertake credit checks to ensure there is less chance anyone will default on their rental payments.

Agents will charge a management fee, usually between 10-15% of the gross rental income, however this might be money well spent for the peace of mind of knowing that someone is taking care of your property 24/7.

14. Landlord’s insurance

As a landlord you are responsible for ensuring you have building and contents insurance. Leaseholders letting out their flats will need to inform their management company that the property is let. They will then ensure the buildings insurer is also advised.

15. Taxes

Be aware that your rental income will be subject to income tax and any profit you make when you sell your Buy-to-Let property will be liable to Capital Gains Tax that HMRC will charge.