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We have been with Property Genius letting and managing our properties for the past 5 years and are delighted with the team. When the properties are available to let it’s always a quick turnaround, reasonable rates, very professional, friendly and always at hand when needed. Highly recommend!!
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Re-let in no time to a top applicant. I really find Property Genius hard to fault. And thats based on knowing them for years now, not just 5 mins. James
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Stay informed with the latest tips, market trends, and guidance from the team at Property Genius.
Nov 1, 2024
Key Takeaways from the Latest UK Budget for Landlords and Tenants
The UK’s recent Budget, unveiled by Chancellor Rachel Reeves, includes significant changes for the property market, especially for landlords and tenants. From increases in stamp duty to the introduction of the Renters’ Rights Bill, this Budget presents a mixed bag of impacts aimed at shaping the future of the rental sector. Here’s a breakdown of the key updates and how they might affect landlords and tenants alike. 1. Increase in Stamp Duty for Additional Properties The stamp duty surcharge on additional properties has increased from 3% to 5%, making property purchases more costly for landlords, especially in the £250,001–£925,000 price bracket. Now, landlords face a total stamp duty rate of 10% on properties within this range. This added cost could discourage new buy-to-let investments, potentially leading to fewer rental properties on the market and driving rents higher due to limited availability. Landlords considering portfolio expansion should account for this additional cost in their financial planning. Key Takeaway for Landlords: Be prepared for higher upfront costs when purchasing additional properties. This may be a good time to assess your long-term portfolio strategy in light of rising acquisition costs. 2. Capital Gains Tax (CGT) Rates Remain Steady Contrary to some predictions, the Budget has kept the current CGT rates for selling rental properties unchanged. This decision offers stability for landlords considering sales, as they won’t face increased CGT liabilities. Maintaining the current rates could incentivise landlords to hold onto properties or time their sales carefully, potentially slowing down market turnover. Key Takeaway for Landlords: While CGT rates haven’t changed, it’s wise to consider timing and financial planning for any potential property sales, as the market could shift with other Budget changes in play. 3. Inheritance Tax (IHT) Adjustments Impacting Estate Planning The Budget freezes the IHT nil-rate band, effectively increasing tax pressure due to inflation. Additionally, pension funds will now be subject to IHT, which could affect landlords using pension funds in estate planning. These changes might prompt some landlords to reassess how they plan to pass down property assets to heirs, considering the higher IHT burden over time. Key Takeaway for Landlords: Review your estate planning and consider consulting with a financial advisor to explore options that may mitigate increased inheritance tax liabilities. 4. Introduction of the Renters’ Rights Bill Alongside the Budget, the government presented the Renters’ Rights Bill, introducing major reforms aimed at providing tenants with more security and flexibility. Key proposals include: Abolition of Section 21 ‘No-Fault’ Evictions: Landlords will need to provide valid reasons for evicting tenants, increasing tenant security. Introduction of Periodic Tenancies: All tenancies will transition to periodic agreements, offering tenants more flexibility. Regulation of Rent Increases: Rent increases will be capped at once per year, and tenants will have the right to challenge excessive increases through a tribunal. Prohibition of Discriminatory Practices: Discrimination against tenants with children or those receiving benefits will be banned, ensuring fairer access to housing. These reforms mark a shift toward tenant-centric policies, giving tenants greater stability while imposing new compliance requirements on landlords. It's important to note however, that this was first introduced to Parliament on 11th September 2024, and is currently under legislative review. If passed, the reforms are expected to become law by summer 2025. This timeline should allow landlords and tenants to prepare for the forthcoming changes. Key Takeaway for Landlords and Tenants: Landlords should review their tenancy agreements and management practices to comply with these changes, while tenants can expect increased rights and stability in their rental arrangements. 5. Government Investment in Affordable Housing To help address the housing shortage, the government has pledged £500 million toward the construction of 5,000 new affordable and social homes. This investment aims to relieve pressure on the rental market by increasing affordable housing options, a positive step for tenants struggling with high rental costs. Key Takeaway for Tenants: Increased availability of affordable housing options could offer more choices and potentially help stabilize rental prices in the long term. Conclusion: A Mixed Landscape for Landlords and Tenants The 2024 Budget and associated legislative changes highlight a strong focus on tenant rights and housing affordability, introducing reforms that will require landlords to adapt their strategies. For tenants, the Renters’ Rights Bill promises enhanced protections, while landlords will need to navigate increased transaction costs and compliance requirements. Next Steps for Landlords and Tenants: Landlords: It’s advisable to reassess your property management practices, especially around tenancy agreements and tax planning. Consult with a property tax advisor if needed to ensure compliance with the new regulations. Tenants: Familiarise yourself with the new rights under the Renters’ Rights Bill to better understand protections regarding tenancy security and rent increase challenges. As these changes take effect, staying informed and proactive can help both landlords and tenants navigate the evolving landscape with confidence. By staying informed about these updates and adjusting your strategies, you can make the most of this period of change, whether you’re renting or investing in property. For more detailed guidance on how these changes might impact your unique circumstances, feel free to reach out or schedule a consultation!...
Oct 25, 2024
Dealing with Rising Rent Arrears: Strategies for Landlords
With the cost of living rising and rents reaching record highs, many tenants are finding it increasingly difficult to keep up with their monthly payments. For landlords, this has led to a growing concern: rent arrears. According to the Goodlord State of the Lettings Industry Report 2024, rent arrears have been on the rise across the country, with 33% of landlords in the North West reporting an increase in arrears. If you’re a landlord in Manchester or the surrounding area, understanding how to effectively manage rent arrears is essential for protecting your income and maintaining a healthy portfolio. Here are some practical strategies to help you deal with rent arrears and safeguard your rental business. Why Are Rent Arrears Rising? There are several reasons why rent arrears have become more common in recent years: Cost of living pressures: As energy prices and general living costs increase, many tenants are struggling to make ends meet. In the North West, tenants are now spending around 35% of their income on rent, making it harder to keep up with payments . Rising rents: The demand for rental properties continues to outstrip supply, leading to higher rents across the region. Although this can be beneficial for landlords in terms of increased yields, it also places more financial strain on tenants, which can result in missed payments . Job insecurity: Economic uncertainty and job instability are also contributing factors. Many tenants have faced job losses or reduced income, making it more difficult to pay rent on time. As rent arrears continue to rise, it’s important for landlords to be proactive in managing this issue and minimising its impact on their rental income. Strategies to Manage and Reduce Rent Arrears 1.Thorough Tenant Screening - One of the best ways to prevent rent arrears is to thoroughly screen tenants before signing a lease. Comprehensive tenant checks—including credit reports, references, and proof of income—can help you identify reliable tenants with a lower risk of defaulting on payments. In the North West, 63% of landlords already work with letting agents like us to help with tenant screening and compliance, ensuring they are letting to the right people. Tip: Use a trusted letting agent such as Property Genius or tenant referencing service to verify income stability and past rental behaviour. Consider asking for a guarantor, especially for tenants with borderline financial profiles. 2.Clear Communication and Payment Plans - When a tenant does fall behind on rent, open communication is crucial. Reach out to the tenant early, understand their financial situation, and try to work out a payment plan that suits both parties. Often, tenants may be facing temporary difficulties and are willing to resolve the issue if given some flexibility. Tip: If a tenant has missed one or two payments, offer to spread the outstanding rent over a few months, making it more manageable for them while ensuring you still receive the full amount owed. 3.Offer Rent Protection Insurance - Rent protection insurance is an increasingly popular way for landlords to protect themselves against rent arrears. Property Genius offer rent protection insurance to landlords, which can provide peace of mind by covering missed payments in the event of tenant default. Tip: Speak with your letting agent about rent protection insurance options and consider incorporating this into your tenancy agreements, especially if you’re renting to tenants with less secure income streams. 4. Regular Rent Reviews - Regularly reviewing your rent levels can help you strike a balance between keeping rents competitive and ensuring they remain affordable for tenants. In some cases, rent arrears occur because tenants cannot keep up with regular rent increases. Tip: If your property is located in an area like Manchester, where demand is high, consider implementing moderate rent increases to avoid pushing tenants into arrears. At the same time, ensure the rent remains aligned with local market rates. 5. Early Intervention with Legal Action - While legal action should always be a last resort, there may be cases where tenants consistently fail to pay rent, leaving you with no other option. The Renters’ Rights Bill could make the eviction process longer and more complex, so it’s important to start any legal proceedings early if necessary . Tip: Before pursuing legal action, send formal notices to the tenant and give them time to catch up on payments. If the situation does not improve, seek legal advice to ensure you follow the correct procedures, especially under new legislation that limits no-fault evictions. Long-Term Solutions for Reducing Arrears While managing current arrears is crucial, it’s also important to implement long-term strategies that can help reduce the risk of arrears in the future: Build a Strong Tenant-Landlord Relationship: Maintaining a positive relationship with your tenants can encourage them to communicate openly if they’re experiencing financial difficulties. When tenants feel supported, they’re more likely to work with you to resolve payment issues, rather than avoiding them. Consider Shorter Rental Periods: For tenants with uncertain financial situations, shorter rental periods might be more appropriate. This can give you the flexibility to reassess their payment history before renewing their contract, helping you avoid being locked into long-term agreements with tenants who struggle to pay rent. Upgrade Your Property: Tenants are more likely to prioritize rent payments if they feel they’re getting value for money. By making small improvements to your property, you can attract higher-quality tenants who are less likely to fall into arrears. The Future of Rent Arrears: What to Expect Given the current economic climate, rent arrears are likely to remain a challenge for landlords in the near future. However, by taking a proactive approach, you can mitigate the risks and protect your rental income. The combination of thorough tenant screening, flexible payment options, and rent protection insurance can go a long way in safeguarding your investment. As new legislation like the Renters’ Rights Bill comes into effect, landlords may face additional hurdles when dealing with problematic tenants, particularly when it comes to eviction. Preparing now by ensuring compliance with the latest regulations and implementing strong arrears management processes will be key to navigating these challenges. Conclusion: Take Control of Rent Arrears While rent arrears can pose a serious threat to your rental income, having a strategy in place to manage them can make all the difference. By being proactive, offering flexibility where needed, and protecting yourself with rent protection insurance, you can reduce the impact of arrears and maintain a healthy portfolio. If you’re concerned about rent arrears or want to discuss your options, get in touch with us today. We’re here to help you navigate the challenges and ensure you have the right protections in place for your rental business. Source of Data: The statistics and insights mentioned in this article are based on findings from Goodlord’s State of the Lettings Industry Report 2024, focusing on rent arrears and landlord challenges in the North West....
Oct 18, 2024
How to Meet the New Energy Efficiency Standards Without Breaking the Bank
Energy efficiency has become a top priority for landlords across the UK, with new regulations on the horizon. By 2030, all rental properties must meet a minimum Energy Performance Certificate (EPC) rating of Band C. While the goal is to create more sustainable homes, many landlords are concerned about the cost of upgrading their properties to meet these new standards. In the North West, over 60% of landlords have at least one property that does not yet meet the required standard. With rising energy costs and increased regulation, it’s understandable that landlords are cautious about how much they’ll need to invest to comply. However, with some smart strategies and government support, it’s possible to meet these standards without breaking the bank. Why Are the New EPC Standards Being Introduced? The government’s push for higher energy efficiency in the rental sector is part of its broader strategy to tackle climate change. These standards aim to: Reduce carbon emissions by making homes more energy efficient. Lower energy bills for tenants, many of whom are struggling with rising living costs. Improve the quality of housing in the private rented sector, ensuring that properties are comfortable and affordable to run. While these goals are important, the responsibility of implementing these changes falls squarely on landlords. For many, the question is: How much will this cost, and is there any way to reduce that burden? The Cost of Compliance: What to Expect According to the Goodlord State of the Lettings Industry Report, many landlords are facing significant costs to upgrade their properties. Nationally, over 52% of landlords have said that rising energy standards could even push them out of the market . However, in the North West, where house prices are generally lower than in regions like London or the South East, landlords may find that they are in a better position to invest in energy efficiency improvements. On average, the cost of bringing a property up to EPC Band C can range from £2,000 to £10,000, depending on the property’s current rating and condition. While this can be a hefty investment, there are several ways to minimize these costs and ensure long-term savings. How to Upgrade Your Property Without Overspending Here are some practical ways to meet the new EPC standards while keeping costs manageable: Start with a Professional Energy Audit - Before jumping into any upgrades, it’s important to understand where your property stands. A professional energy audit can identify the most cost-effective improvements, such as better insulation, more efficient heating systems, or energy-saving windows. This will help you prioritise where to invest, ensuring you get the most value for your money. Take Advantage of Government Grants and Loans - The UK government has introduced various schemes to help landlords meet these new energy efficiency requirements. For example, there are grants and low-interest loans available specifically for upgrading insulation, installing energy-efficient boilers, and even fitting solar panels. Check what’s available in Manchester and the broader North West region through your local council or the national ECO4 scheme. Focus on Low-Cost, High-Impact Improvements - Some of the most effective energy upgrades are also the simplest. These improvements may not get your property to Band C alone, but they can make a big difference for a modest investment. For instance: Improved insulation: Loft and cavity wall insulation can drastically improve your property’s energy efficiency for relatively low upfront costs. Energy-efficient lighting: Swapping out old bulbs for LED lights can reduce energy consumption immediately. Draught-proofing: Sealing gaps around windows, doors, and floorboards can reduce heat loss without major structural changes. Consider Solar Panels or Heat Pumps - While more expensive upfront, technologies like solar panels or heat pumps can significantly reduce long-term energy costs and improve your EPC rating. With solar panels, you could even sell surplus energy back to the grid, helping offset the initial investment. Government incentives are often available for these larger projects, making them more accessible for landlords willing to invest for the long term. Plan Gradually - If upgrading all your properties at once feels overwhelming, plan the work in stages. Focus on improving the properties that are closest to meeting the EPC Band C requirements first. Spreading the costs over time can make the financial impact more manageable while ensuring you’re working towards compliance. Long-Term Benefits of Energy Efficiency Investing in energy efficiency not only helps you comply with the regulations but can also have long-term benefits for your rental portfolio: Higher property value: Energy-efficient homes are more attractive to tenants and buyers, which can increase the value of your properties over time. Lower tenant turnover: Tenants are more likely to stay in a property with lower energy bills, which can reduce your vacancy rates. Future-proofing your investment: By making your properties more sustainable now, you’ll be prepared for future regulations, avoiding costly last-minute upgrades. What Happens If You Don’t Comply? Failing to meet the new EPC standards by 2030 could result in fines and limit your ability to rent out properties. Properties with a low EPC rating could also become less desirable to tenants, especially as awareness of energy efficiency grows. Staying ahead of the regulations now will save you from rushing to make upgrades under pressure later. Conclusion: Upgrading Your Property Without Breaking the Bank Meeting the new energy efficiency standards doesn’t have to be an overwhelming or overly expensive process. By taking advantage of grants, focusing on high-impact improvements, and planning strategically, you can bring your properties up to the required standard while maintaining your profitability. If you’d like more advice on energy-efficient upgrades or want to discuss your property portfolio, feel free to reach out. We can help you plan a cost-effective strategy to meet these new regulations and ensure your rental properties are ready for the future. Source of Data: The statistics and insights mentioned in this article are based on findings from Goodlord’s State of the Lettings Industry Report 2024, with a focus on energy efficiency standards and the challenges facing landlords in the North West....
Oct 16, 2024
Taking on a New Portfolio: How Rental Compliance Has Changed Over the Years
Recently, we’ve had the opportunity to take on several new property portfolios from clients who have decided that now is the right time to hand over the management of their rental properties. With portfolios of over 20 properties each, these landlords are looking to ensure that everything is fully compliant with today’s increasingly complex rental regulations. One of the first tasks we face when taking on a new portfolio is reviewing the existing tenancy agreements and documents. Many of these properties were rented out under agreements made in the late 1990s or early 2000s—back when the legal requirements for landlords were much simpler. These older agreements serve as a reminder of just how much the private rented sector (PRS) has changed over the years. Let’s take a closer look at what’s involved in bringing older rental agreements up to today’s standards and why ensuring compliance is more important than ever. A Look Back: Tenancy Agreements in the Late 90s and Early 2000s When reviewing older tenancy agreements, it’s clear how much the legal landscape has evolved. Tenancies created 20 or even 10 years ago often lack the detailed provisions we now take for granted, and the documentation is much lighter in terms of what was required. In the late 90s and early 2000s, landlords had fewer obligations regarding tenant safety, information, and rights. Some of the things that were often overlooked or weren’t even required at the time include: Gas Safety Certificates: Although required by law since 1998, older tenancy agreements don’t always include proof that a valid Gas Safety Certificate was issued before the start of the tenancy. Electrical Safety Checks: Regular electrical inspections only became mandatory in recent years, meaning older properties might not have undergone proper checks. Deposits and Prescribed Information: Before the introduction of deposit protection schemes in 2007, it was common for deposits to be held by landlords without any formal protections in place. Many older tenancies also lack evidence of prescribed information being given to tenants. Energy Performance Certificates (EPCs): EPCs were introduced in 2008, so older tenancy agreements often predate this requirement. While these older agreements may have been sufficient at the time, today’s rental market is far more regulated, and landlords have much more to manage in terms of compliance. Bringing Portfolios Up to Modern Standards When we take on a new portfolio, one of our first tasks is to thoroughly review every tenancy agreement, ensuring that all the necessary paperwork is in place and compliant with current regulations. This often means going through years of documentation, and in some cases, identifying where things may have slipped through the cracks. Here are a few of the key compliance checks we focus on when bringing older portfolios up to date: Gas Safety Certificates - We ensure that a valid Gas Safety Certificate is provided to tenants before the start of the tenancy and renewed annually. This is a critical piece of compliance that has become far more stringent in recent years. If a certificate wasn’t provided at the start of the tenancy, it could affect your ability to serve a valid Section 21 notice. Electrical Installation Condition Reports (EICR) - Electrical safety checks are now mandatory every five years for all rental properties. When taking over older portfolios, we review whether an EICR has been completed, and if not, we arrange for one to be done promptly. Deposit Protection - Since 2007, deposits must be protected in an approved scheme, and the prescribed information must be provided to tenants within 30 days of receipt. When dealing with older agreements, it’s essential to ensure that all deposits have been correctly protected. If the deposit wasn’t protected on time, this can expose landlords to penalties and restrict their ability to regain possession of their property. Energy Performance Certificates (EPCs) - For tenancies started after 2008, an EPC must be provided before the tenancy begins, and the property must meet a minimum EPC rating of E. When reviewing older agreements, we ensure that the correct EPC rating is in place and check for upcoming EPC Band C requirements that will apply by 2030. Providing the “How to Rent” Guide - The “How to Rent” Guide must be provided to tenants at the start of any new tenancy. This guide is regularly updated, so ensuring the latest version has been given to tenants is crucial for maintaining compliance. Why Compliance Matters More Than Ever The introduction of the Renters’ Rights Bill and other legislative changes means that rental compliance is under more scrutiny than ever before. As landlords take on new responsibilities, ensuring that all documents and procedures are in place is essential—not only to avoid penalties but also to provide a safe and secure environment for tenants. When we take on new portfolios, we often discover that while the properties themselves are well-maintained, the paperwork doesn’t always meet current standards. This is particularly common in properties that have been rented out for decades, where tenancy agreements have simply rolled over year after year. By working with a professional letting agency, landlords can rest assured that every detail of their rental business is compliant with the latest legal requirements. Our role is to go through all the files, spot any potential issues, and resolve them before they become a problem. The Future of Property Management Taking on a new portfolio always involves some detective work—especially when it comes to older agreements—but it also provides a valuable opportunity to bring properties in line with today’s regulations and avoid any future legal complications. For landlords, the rental landscape has changed dramatically since the 90s and early 2000s. What was once a straightforward process now requires careful attention to detail, particularly when it comes to compliance. That’s where a professional property management team comes in. By ensuring every certificate, inspection, and piece of documentation is in place, we help landlords stay on the right side of the law while protecting their investment. If you’ve been managing your portfolio independently and are considering handing over the reins to a professional agency, such as Property Genius, now could be the perfect time. We can help you review all your agreements, get your paperwork in order, and ensure your properties are fully compliant with today’s regulations. Conclusion: Staying Compliant in a Changing Market The rental market has come a long way since the days of simple tenancy agreements and minimal legal obligations. Today, landlords have far more responsibilities when it comes to providing safe, well-maintained, and compliant homes for their tenants. If you’re unsure whether your current portfolio meets today’s standards, or if you’ve taken on properties with older agreements, we’re here to help. Our team can review your tenancy agreements, check all compliance documents, and ensure that your properties are fully up to date....
Nov 1, 2024
Key Takeaways from the Latest UK Budget for Landlords and Tenants
The UK’s recent Budget, unveiled by Chancellor Rachel Reeves, includes significant changes for the property market, especially for landlords and tenants. From increases in stamp duty to the introduction of the Renters’ Rights Bill, this Budget presents a mixed bag of impacts aimed at shaping the future of the rental sector. Here’s a breakdown of the key updates and how they might affect landlords and tenants alike. 1. Increase in Stamp Duty for Additional Properties The stamp duty surcharge on additional properties has increased from 3% to 5%, making property purchases more costly for landlords, especially in the £250,001–£925,000 price bracket. Now, landlords face a total stamp duty rate of 10% on properties within this range. This added cost could discourage new buy-to-let investments, potentially leading to fewer rental properties on the market and driving rents higher due to limited availability. Landlords considering portfolio expansion should account for this additional cost in their financial planning. Key Takeaway for Landlords: Be prepared for higher upfront costs when purchasing additional properties. This may be a good time to assess your long-term portfolio strategy in light of rising acquisition costs. 2. Capital Gains Tax (CGT) Rates Remain Steady Contrary to some predictions, the Budget has kept the current CGT rates for selling rental properties unchanged. This decision offers stability for landlords considering sales, as they won’t face increased CGT liabilities. Maintaining the current rates could incentivise landlords to hold onto properties or time their sales carefully, potentially slowing down market turnover. Key Takeaway for Landlords: While CGT rates haven’t changed, it’s wise to consider timing and financial planning for any potential property sales, as the market could shift with other Budget changes in play. 3. Inheritance Tax (IHT) Adjustments Impacting Estate Planning The Budget freezes the IHT nil-rate band, effectively increasing tax pressure due to inflation. Additionally, pension funds will now be subject to IHT, which could affect landlords using pension funds in estate planning. These changes might prompt some landlords to reassess how they plan to pass down property assets to heirs, considering the higher IHT burden over time. Key Takeaway for Landlords: Review your estate planning and consider consulting with a financial advisor to explore options that may mitigate increased inheritance tax liabilities. 4. Introduction of the Renters’ Rights Bill Alongside the Budget, the government presented the Renters’ Rights Bill, introducing major reforms aimed at providing tenants with more security and flexibility. Key proposals include: Abolition of Section 21 ‘No-Fault’ Evictions: Landlords will need to provide valid reasons for evicting tenants, increasing tenant security. Introduction of Periodic Tenancies: All tenancies will transition to periodic agreements, offering tenants more flexibility. Regulation of Rent Increases: Rent increases will be capped at once per year, and tenants will have the right to challenge excessive increases through a tribunal. Prohibition of Discriminatory Practices: Discrimination against tenants with children or those receiving benefits will be banned, ensuring fairer access to housing. These reforms mark a shift toward tenant-centric policies, giving tenants greater stability while imposing new compliance requirements on landlords. It's important to note however, that this was first introduced to Parliament on 11th September 2024, and is currently under legislative review. If passed, the reforms are expected to become law by summer 2025. This timeline should allow landlords and tenants to prepare for the forthcoming changes. Key Takeaway for Landlords and Tenants: Landlords should review their tenancy agreements and management practices to comply with these changes, while tenants can expect increased rights and stability in their rental arrangements. 5. Government Investment in Affordable Housing To help address the housing shortage, the government has pledged £500 million toward the construction of 5,000 new affordable and social homes. This investment aims to relieve pressure on the rental market by increasing affordable housing options, a positive step for tenants struggling with high rental costs. Key Takeaway for Tenants: Increased availability of affordable housing options could offer more choices and potentially help stabilize rental prices in the long term. Conclusion: A Mixed Landscape for Landlords and Tenants The 2024 Budget and associated legislative changes highlight a strong focus on tenant rights and housing affordability, introducing reforms that will require landlords to adapt their strategies. For tenants, the Renters’ Rights Bill promises enhanced protections, while landlords will need to navigate increased transaction costs and compliance requirements. Next Steps for Landlords and Tenants: Landlords: It’s advisable to reassess your property management practices, especially around tenancy agreements and tax planning. Consult with a property tax advisor if needed to ensure compliance with the new regulations. Tenants: Familiarise yourself with the new rights under the Renters’ Rights Bill to better understand protections regarding tenancy security and rent increase challenges. As these changes take effect, staying informed and proactive can help both landlords and tenants navigate the evolving landscape with confidence. By staying informed about these updates and adjusting your strategies, you can make the most of this period of change, whether you’re renting or investing in property. For more detailed guidance on how these changes might impact your unique circumstances, feel free to reach out or schedule a consultation!...
Oct 25, 2024
Dealing with Rising Rent Arrears: Strategies for Landlords
With the cost of living rising and rents reaching record highs, many tenants are finding it increasingly difficult to keep up with their monthly payments. For landlords, this has led to a growing concern: rent arrears. According to the Goodlord State of the Lettings Industry Report 2024, rent arrears have been on the rise across the country, with 33% of landlords in the North West reporting an increase in arrears. If you’re a landlord in Manchester or the surrounding area, understanding how to effectively manage rent arrears is essential for protecting your income and maintaining a healthy portfolio. Here are some practical strategies to help you deal with rent arrears and safeguard your rental business. Why Are Rent Arrears Rising? There are several reasons why rent arrears have become more common in recent years: Cost of living pressures: As energy prices and general living costs increase, many tenants are struggling to make ends meet. In the North West, tenants are now spending around 35% of their income on rent, making it harder to keep up with payments . Rising rents: The demand for rental properties continues to outstrip supply, leading to higher rents across the region. Although this can be beneficial for landlords in terms of increased yields, it also places more financial strain on tenants, which can result in missed payments . Job insecurity: Economic uncertainty and job instability are also contributing factors. Many tenants have faced job losses or reduced income, making it more difficult to pay rent on time. As rent arrears continue to rise, it’s important for landlords to be proactive in managing this issue and minimising its impact on their rental income. Strategies to Manage and Reduce Rent Arrears 1.Thorough Tenant Screening - One of the best ways to prevent rent arrears is to thoroughly screen tenants before signing a lease. Comprehensive tenant checks—including credit reports, references, and proof of income—can help you identify reliable tenants with a lower risk of defaulting on payments. In the North West, 63% of landlords already work with letting agents like us to help with tenant screening and compliance, ensuring they are letting to the right people. Tip: Use a trusted letting agent such as Property Genius or tenant referencing service to verify income stability and past rental behaviour. Consider asking for a guarantor, especially for tenants with borderline financial profiles. 2.Clear Communication and Payment Plans - When a tenant does fall behind on rent, open communication is crucial. Reach out to the tenant early, understand their financial situation, and try to work out a payment plan that suits both parties. Often, tenants may be facing temporary difficulties and are willing to resolve the issue if given some flexibility. Tip: If a tenant has missed one or two payments, offer to spread the outstanding rent over a few months, making it more manageable for them while ensuring you still receive the full amount owed. 3.Offer Rent Protection Insurance - Rent protection insurance is an increasingly popular way for landlords to protect themselves against rent arrears. Property Genius offer rent protection insurance to landlords, which can provide peace of mind by covering missed payments in the event of tenant default. Tip: Speak with your letting agent about rent protection insurance options and consider incorporating this into your tenancy agreements, especially if you’re renting to tenants with less secure income streams. 4. Regular Rent Reviews - Regularly reviewing your rent levels can help you strike a balance between keeping rents competitive and ensuring they remain affordable for tenants. In some cases, rent arrears occur because tenants cannot keep up with regular rent increases. Tip: If your property is located in an area like Manchester, where demand is high, consider implementing moderate rent increases to avoid pushing tenants into arrears. At the same time, ensure the rent remains aligned with local market rates. 5. Early Intervention with Legal Action - While legal action should always be a last resort, there may be cases where tenants consistently fail to pay rent, leaving you with no other option. The Renters’ Rights Bill could make the eviction process longer and more complex, so it’s important to start any legal proceedings early if necessary . Tip: Before pursuing legal action, send formal notices to the tenant and give them time to catch up on payments. If the situation does not improve, seek legal advice to ensure you follow the correct procedures, especially under new legislation that limits no-fault evictions. Long-Term Solutions for Reducing Arrears While managing current arrears is crucial, it’s also important to implement long-term strategies that can help reduce the risk of arrears in the future: Build a Strong Tenant-Landlord Relationship: Maintaining a positive relationship with your tenants can encourage them to communicate openly if they’re experiencing financial difficulties. When tenants feel supported, they’re more likely to work with you to resolve payment issues, rather than avoiding them. Consider Shorter Rental Periods: For tenants with uncertain financial situations, shorter rental periods might be more appropriate. This can give you the flexibility to reassess their payment history before renewing their contract, helping you avoid being locked into long-term agreements with tenants who struggle to pay rent. Upgrade Your Property: Tenants are more likely to prioritize rent payments if they feel they’re getting value for money. By making small improvements to your property, you can attract higher-quality tenants who are less likely to fall into arrears. The Future of Rent Arrears: What to Expect Given the current economic climate, rent arrears are likely to remain a challenge for landlords in the near future. However, by taking a proactive approach, you can mitigate the risks and protect your rental income. The combination of thorough tenant screening, flexible payment options, and rent protection insurance can go a long way in safeguarding your investment. As new legislation like the Renters’ Rights Bill comes into effect, landlords may face additional hurdles when dealing with problematic tenants, particularly when it comes to eviction. Preparing now by ensuring compliance with the latest regulations and implementing strong arrears management processes will be key to navigating these challenges. Conclusion: Take Control of Rent Arrears While rent arrears can pose a serious threat to your rental income, having a strategy in place to manage them can make all the difference. By being proactive, offering flexibility where needed, and protecting yourself with rent protection insurance, you can reduce the impact of arrears and maintain a healthy portfolio. If you’re concerned about rent arrears or want to discuss your options, get in touch with us today. We’re here to help you navigate the challenges and ensure you have the right protections in place for your rental business. Source of Data: The statistics and insights mentioned in this article are based on findings from Goodlord’s State of the Lettings Industry Report 2024, focusing on rent arrears and landlord challenges in the North West....
Oct 18, 2024
How to Meet the New Energy Efficiency Standards Without Breaking the Bank
Energy efficiency has become a top priority for landlords across the UK, with new regulations on the horizon. By 2030, all rental properties must meet a minimum Energy Performance Certificate (EPC) rating of Band C. While the goal is to create more sustainable homes, many landlords are concerned about the cost of upgrading their properties to meet these new standards. In the North West, over 60% of landlords have at least one property that does not yet meet the required standard. With rising energy costs and increased regulation, it’s understandable that landlords are cautious about how much they’ll need to invest to comply. However, with some smart strategies and government support, it’s possible to meet these standards without breaking the bank. Why Are the New EPC Standards Being Introduced? The government’s push for higher energy efficiency in the rental sector is part of its broader strategy to tackle climate change. These standards aim to: Reduce carbon emissions by making homes more energy efficient. Lower energy bills for tenants, many of whom are struggling with rising living costs. Improve the quality of housing in the private rented sector, ensuring that properties are comfortable and affordable to run. While these goals are important, the responsibility of implementing these changes falls squarely on landlords. For many, the question is: How much will this cost, and is there any way to reduce that burden? The Cost of Compliance: What to Expect According to the Goodlord State of the Lettings Industry Report, many landlords are facing significant costs to upgrade their properties. Nationally, over 52% of landlords have said that rising energy standards could even push them out of the market . However, in the North West, where house prices are generally lower than in regions like London or the South East, landlords may find that they are in a better position to invest in energy efficiency improvements. On average, the cost of bringing a property up to EPC Band C can range from £2,000 to £10,000, depending on the property’s current rating and condition. While this can be a hefty investment, there are several ways to minimize these costs and ensure long-term savings. How to Upgrade Your Property Without Overspending Here are some practical ways to meet the new EPC standards while keeping costs manageable: Start with a Professional Energy Audit - Before jumping into any upgrades, it’s important to understand where your property stands. A professional energy audit can identify the most cost-effective improvements, such as better insulation, more efficient heating systems, or energy-saving windows. This will help you prioritise where to invest, ensuring you get the most value for your money. Take Advantage of Government Grants and Loans - The UK government has introduced various schemes to help landlords meet these new energy efficiency requirements. For example, there are grants and low-interest loans available specifically for upgrading insulation, installing energy-efficient boilers, and even fitting solar panels. Check what’s available in Manchester and the broader North West region through your local council or the national ECO4 scheme. Focus on Low-Cost, High-Impact Improvements - Some of the most effective energy upgrades are also the simplest. These improvements may not get your property to Band C alone, but they can make a big difference for a modest investment. For instance: Improved insulation: Loft and cavity wall insulation can drastically improve your property’s energy efficiency for relatively low upfront costs. Energy-efficient lighting: Swapping out old bulbs for LED lights can reduce energy consumption immediately. Draught-proofing: Sealing gaps around windows, doors, and floorboards can reduce heat loss without major structural changes. Consider Solar Panels or Heat Pumps - While more expensive upfront, technologies like solar panels or heat pumps can significantly reduce long-term energy costs and improve your EPC rating. With solar panels, you could even sell surplus energy back to the grid, helping offset the initial investment. Government incentives are often available for these larger projects, making them more accessible for landlords willing to invest for the long term. Plan Gradually - If upgrading all your properties at once feels overwhelming, plan the work in stages. Focus on improving the properties that are closest to meeting the EPC Band C requirements first. Spreading the costs over time can make the financial impact more manageable while ensuring you’re working towards compliance. Long-Term Benefits of Energy Efficiency Investing in energy efficiency not only helps you comply with the regulations but can also have long-term benefits for your rental portfolio: Higher property value: Energy-efficient homes are more attractive to tenants and buyers, which can increase the value of your properties over time. Lower tenant turnover: Tenants are more likely to stay in a property with lower energy bills, which can reduce your vacancy rates. Future-proofing your investment: By making your properties more sustainable now, you’ll be prepared for future regulations, avoiding costly last-minute upgrades. What Happens If You Don’t Comply? Failing to meet the new EPC standards by 2030 could result in fines and limit your ability to rent out properties. Properties with a low EPC rating could also become less desirable to tenants, especially as awareness of energy efficiency grows. Staying ahead of the regulations now will save you from rushing to make upgrades under pressure later. Conclusion: Upgrading Your Property Without Breaking the Bank Meeting the new energy efficiency standards doesn’t have to be an overwhelming or overly expensive process. By taking advantage of grants, focusing on high-impact improvements, and planning strategically, you can bring your properties up to the required standard while maintaining your profitability. If you’d like more advice on energy-efficient upgrades or want to discuss your property portfolio, feel free to reach out. We can help you plan a cost-effective strategy to meet these new regulations and ensure your rental properties are ready for the future. Source of Data: The statistics and insights mentioned in this article are based on findings from Goodlord’s State of the Lettings Industry Report 2024, with a focus on energy efficiency standards and the challenges facing landlords in the North West....
Oct 16, 2024
Taking on a New Portfolio: How Rental Compliance Has Changed Over the Years
Recently, we’ve had the opportunity to take on several new property portfolios from clients who have decided that now is the right time to hand over the management of their rental properties. With portfolios of over 20 properties each, these landlords are looking to ensure that everything is fully compliant with today’s increasingly complex rental regulations. One of the first tasks we face when taking on a new portfolio is reviewing the existing tenancy agreements and documents. Many of these properties were rented out under agreements made in the late 1990s or early 2000s—back when the legal requirements for landlords were much simpler. These older agreements serve as a reminder of just how much the private rented sector (PRS) has changed over the years. Let’s take a closer look at what’s involved in bringing older rental agreements up to today’s standards and why ensuring compliance is more important than ever. A Look Back: Tenancy Agreements in the Late 90s and Early 2000s When reviewing older tenancy agreements, it’s clear how much the legal landscape has evolved. Tenancies created 20 or even 10 years ago often lack the detailed provisions we now take for granted, and the documentation is much lighter in terms of what was required. In the late 90s and early 2000s, landlords had fewer obligations regarding tenant safety, information, and rights. Some of the things that were often overlooked or weren’t even required at the time include: Gas Safety Certificates: Although required by law since 1998, older tenancy agreements don’t always include proof that a valid Gas Safety Certificate was issued before the start of the tenancy. Electrical Safety Checks: Regular electrical inspections only became mandatory in recent years, meaning older properties might not have undergone proper checks. Deposits and Prescribed Information: Before the introduction of deposit protection schemes in 2007, it was common for deposits to be held by landlords without any formal protections in place. Many older tenancies also lack evidence of prescribed information being given to tenants. Energy Performance Certificates (EPCs): EPCs were introduced in 2008, so older tenancy agreements often predate this requirement. While these older agreements may have been sufficient at the time, today’s rental market is far more regulated, and landlords have much more to manage in terms of compliance. Bringing Portfolios Up to Modern Standards When we take on a new portfolio, one of our first tasks is to thoroughly review every tenancy agreement, ensuring that all the necessary paperwork is in place and compliant with current regulations. This often means going through years of documentation, and in some cases, identifying where things may have slipped through the cracks. Here are a few of the key compliance checks we focus on when bringing older portfolios up to date: Gas Safety Certificates - We ensure that a valid Gas Safety Certificate is provided to tenants before the start of the tenancy and renewed annually. This is a critical piece of compliance that has become far more stringent in recent years. If a certificate wasn’t provided at the start of the tenancy, it could affect your ability to serve a valid Section 21 notice. Electrical Installation Condition Reports (EICR) - Electrical safety checks are now mandatory every five years for all rental properties. When taking over older portfolios, we review whether an EICR has been completed, and if not, we arrange for one to be done promptly. Deposit Protection - Since 2007, deposits must be protected in an approved scheme, and the prescribed information must be provided to tenants within 30 days of receipt. When dealing with older agreements, it’s essential to ensure that all deposits have been correctly protected. If the deposit wasn’t protected on time, this can expose landlords to penalties and restrict their ability to regain possession of their property. Energy Performance Certificates (EPCs) - For tenancies started after 2008, an EPC must be provided before the tenancy begins, and the property must meet a minimum EPC rating of E. When reviewing older agreements, we ensure that the correct EPC rating is in place and check for upcoming EPC Band C requirements that will apply by 2030. Providing the “How to Rent” Guide - The “How to Rent” Guide must be provided to tenants at the start of any new tenancy. This guide is regularly updated, so ensuring the latest version has been given to tenants is crucial for maintaining compliance. Why Compliance Matters More Than Ever The introduction of the Renters’ Rights Bill and other legislative changes means that rental compliance is under more scrutiny than ever before. As landlords take on new responsibilities, ensuring that all documents and procedures are in place is essential—not only to avoid penalties but also to provide a safe and secure environment for tenants. When we take on new portfolios, we often discover that while the properties themselves are well-maintained, the paperwork doesn’t always meet current standards. This is particularly common in properties that have been rented out for decades, where tenancy agreements have simply rolled over year after year. By working with a professional letting agency, landlords can rest assured that every detail of their rental business is compliant with the latest legal requirements. Our role is to go through all the files, spot any potential issues, and resolve them before they become a problem. The Future of Property Management Taking on a new portfolio always involves some detective work—especially when it comes to older agreements—but it also provides a valuable opportunity to bring properties in line with today’s regulations and avoid any future legal complications. For landlords, the rental landscape has changed dramatically since the 90s and early 2000s. What was once a straightforward process now requires careful attention to detail, particularly when it comes to compliance. That’s where a professional property management team comes in. By ensuring every certificate, inspection, and piece of documentation is in place, we help landlords stay on the right side of the law while protecting their investment. If you’ve been managing your portfolio independently and are considering handing over the reins to a professional agency, such as Property Genius, now could be the perfect time. We can help you review all your agreements, get your paperwork in order, and ensure your properties are fully compliant with today’s regulations. Conclusion: Staying Compliant in a Changing Market The rental market has come a long way since the days of simple tenancy agreements and minimal legal obligations. Today, landlords have far more responsibilities when it comes to providing safe, well-maintained, and compliant homes for their tenants. If you’re unsure whether your current portfolio meets today’s standards, or if you’ve taken on properties with older agreements, we’re here to help. Our team can review your tenancy agreements, check all compliance documents, and ensure that your properties are fully up to date....