The start of 2017 hasn’t seen a slowdown in activity and enquiries from landlords/investors looking to expand their property portfolios and many are targeting Dunstable & Leighton Buzzard for their next purchase. As well as new landlords and existing landlords looking to buy I have been surprised to have 2 landlords I didn’t know who each had a property for sale with offers on the table decide to remove them from the sales market and ask me to find them tenants instead. Both properties were good rental properties and having contacted me and done their sums decided that the rents now achievable made it a better investment to keep them instead of selling.
I have also been assisting 3 investors in the last couple of weeks looking to purchase their first property. By asking them to email me links to the property details they are considering buying I am able to give them both a realistic impartial rental valuation and also advice on the suitability of the property. For new investors some potential issues that can be picked up from marketing photos are overlooked.
One of the properties under consideration this week was a lovely 2 bedroom house in Dunstable. 2 bedroom houses are very sought after and this one came with the added bonus of a basement that had been tanked and was a useable extra room. The property is well presented and looks to have had some work done on it by the current owners including new central heating and also a log burner in the living room. This is a nice feature for a home owner but is also extra maintenance for a landlord. Strangely what did stand out in the living room was a plug in oil radiator under the window in the living room? It would seem that when installing the new central heating the owners have decided that a log burner was sufficient for the living room and didn’t have a radiator fitted. Log burners are a great heat source but not for everyday use and therefore they have had to supplement it with a plug in radiator. This is not suitable for tenants who will want a radiator in there so a potential extra cost and work would have to be factored in for our investor.
One of our other investors has been looking in Leighton Buzzard at a number of potential apartments as a first buy. Leighton Buzzard is very popular due to the train station and there are areas not too far from the station with potential investment properties, but there are some areas where the properties are of an age when storage heaters were common. Storage heaters can be an efficient way of heating a property but have to be managed so that the heat is stored and released at the right time. Many tenants do not get this right or do not understand the process and then issues arise when the property gets cold and they have to use alternative heating. With insuffient heating there is potential for the appearance of mould in unheated or poorly heated rooms. Unless an investor is including the introduction of new heaters for the apartment in their calculations and the redecoration required after removing the storage heaters I would advise against buying such apartments.
Speaking to new investors it is also obvious that they are not yet aware of several current and incoming regulations that could affect their portfolio and surprisingly many existing landlords are also unaware.
A recent report noted that Just 52% of respondents knew it would be illegal to let properties with an EPC rating of F or G from April 2018, while 17% weren’t aware of the changes. An Energy Performance Certificate (EPC) lasts for 10 years and if your current one was carried out a number of years ago any improvements you might have made to the property such as a new boiler, double glazing or LED lighting will not be reflected in the EPC unless you have the property EPC carried out again. Tenants are increasingly taking note of a properties EPC before choosing to view and the small cost of a new EPC could increase interest in your property. Also the cost of electric heating compared to gas heating has improved in the last few years and a property with electric heating and an EPC rating of F or even G is likely to achieve a higher rating now.
From 1 February 2016, all private landlords in England have been required to check new tenants have the right to be in the UK before renting out their property. In the same report 70% of landlords couldn’t correctly identify the penalties for failing to comply with Right to Rent regulations.
Right to Rent, which also applies to people who are subletting their property or taking in lodgers, was introduced in the Immigration Act 2014. Landlords who fail to carry out checks risk a potential penalty of up to £3,000 per tenant.
The majority were aware of the mortgage interest relief changes and the need for smoke and carbon monoxide alarms although I still receive a couple of calls a month from landlords who own properties and need clarification regarding smoke alarms.
