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Nov 11, 2024
Understanding and Tackling Mould in Rented Homes: A Guide for Tenants
Mould and damp issues can be frustrating for tenants, especially when they’re caused by condensation. As winter approaches and the temperature drops, condensation—and subsequently mould—becomes a common concern in many households. Understanding the causes and taking preventative measures can make a significant difference in protecting both your health and your home. In this article, we’ll explore how to identify mould caused by condensation, understand why it happens, and provide tips on how to manage it. We’ll also highlight relevant clauses in your Assured Shorthold Tenancy (AST) agreement, including those that outline your responsibilities around cleaning and ventilation. Identifying Mould Caused by Condensation Condensation is a leading cause of damp and mould in homes, especially in colder months. Unlike penetrating or rising damp, condensation-related damp is typically surface-level and can often be seen on walls, windows, and other surfaces where warm, moist air meets a cold surface. Here’s how to tell if you’re dealing with condensation-based mould: Location: Condensation damp usually appears on or near windows, external walls, and in areas with poor ventilation like bathrooms and kitchens. Appearance: Mould from condensation is often black or greenish in colour and tends to look patchy/spotty, spreading out in clusters on walls, ceilings, or around windows. Accompanying Signs: If you notice persistent fogging on your windows, damp spots on your walls, or water pooling on surfaces, it’s likely caused by condensation. Why Does Condensation Happen? Condensation forms when warm, humid air comes into contact with cooler surfaces. As the air cools down, it loses the ability to hold moisture, which then collects on these surfaces. Here are common reasons this happens in rented properties: Poor Ventilation: When there’s insufficient airflow, moisture in the air has nowhere to escape, leading to condensation. High Humidity Activities: Everyday activities like cooking, showering, and drying clothes indoors without proper ventilation can add moisture to the air. Cooler Indoor Temperatures: If a property isn’t kept warm enough, the temperature difference between warm air and cold surfaces increases, making condensation more likely. Tips for Preventing Condensation and Mould Growth Taking a proactive approach to prevent condensation can save you from dealing with mould growth down the line. Here are practical steps to help reduce moisture build-up in your home: Ventilate the Property Regularly Ensure your home is well-ventilated by opening windows (especially in the kitchen and bathroom) and using extractor fans where possible. This is particularly important after cooking, showering, or drying clothes indoors. Many AST agreements, stipulate that tenants must “take all appropriate precautions to ensure adequate ventilation.” Heat Rooms Consistently Keeping a steady, mild temperature can help reduce condensation. Try to avoid letting rooms get too cold, as this will encourage moisture to settle on cold surfaces. Even a low level of background heating can make a difference in colder months. While this can be a challenge when it comes to cost, it is an important step to present mould growth. Avoid Drying Clothes Indoors If possible, try to dry clothes outdoors or use a dryer with proper ventilation. If you need to dry clothes indoors, try placing them in a well-ventilated area and using a dehumidifier to absorb extra moisture such as a bathroom with closed door with the extractor fan on. Clean and Maintain Windows Many ASTs requires tenants to keep the windows clean. This is essential, as water droplets that are left, will make window frames wet and bread mould. Dirt and grime can trap moisture, making condensation more likely to form on windows. Regularly wiping down windows and their frames can help minimise condensation and mould. Use Dehumidifiers Dehumidifiers can help reduce the amount of moisture in the air, especially in areas that tend to stay damp. Portable, affordable dehumidifiers are widely available and can be a worthwhile investment for rooms that experience frequent condensation. Avoid the cheap disposable kinds and instead opt for an electronic appliance. Clean Mould Promptly If you notice mould beginning to develop, clean it off as soon as possible. AST agreements require tenants to clean items that have become soiled. Use an appropriate anti-mould cleaner, and wear gloves and a mask to avoid exposure. Addressing the mould early will help prevent it from spreading further. What to Do if Mould Persists If you’ve followed these preventative steps but continue to experience mould problems, it may indicate a structural issue such as poor insulation, inadequate ventilation systems, or other building-related problems. In such cases, notify your landlord or property manager in writing. They are responsible for ensuring the property is fit for habitation, including addressing significant issues that contribute to damp and mould. Your responsibility as a tenant is generally limited to maintaining reasonable ventilation and cleanliness, as stated in the AST clauses 8.2.8–8.2.10. Beyond that, it’s the landlord’s duty to tackle structural issues. Summary Checklist: Preventing Mould Caused by Condensation Ensure regular ventilation, especially in high-humidity areas. Keep a consistent mild temperature throughout the home. Avoid indoor drying of clothes or use a dehumidifier. Clean windows and frames to prevent moisture buildup. Use a dehumidifier in persistently damp rooms. Report ongoing issues to your landlord if mould persists despite following these steps. Final Thoughts Dealing with mould caused by condensation is a common challenge for tenants, but taking preventative steps can make a big difference. By understanding what causes condensation and taking proactive measures, you can help keep your living environment healthier and more comfortable. Remember, check your AST for specific clauses...
Nov 8, 2024
What Tenants Want: Insights on Periodic vs Fixed-Term Tenancies
As the UK government pushes forward with rental reforms, one of the most debated issues for both landlords and tenants is the type of tenancy agreement that works best: fixed-term or periodic. Labour’s Renters’ Rights Bill proposes to make all tenancies periodic by default, giving tenants more flexibility. While this change has been welcomed by some, others—particularly landlords—are cautious about what this will mean for their rental businesses. In the North West, where demand for rental properties is high, understanding what tenants really want from their rental agreements can help landlords make informed decisions about how to structure their lets. In this article, we explore the pros and cons of both periodic and fixed-term tenancies, and what tenants and landlords in the North West should know about the upcoming changes. Fixed-Term Tenancies: Stability and Predictability Traditionally, fixed-term tenancies—typically lasting between 6 to 12 months—have been the standard choice in the UK rental market. Under these agreements, both tenants and landlords commit to a set period, providing stability for both parties. Why Tenants Choose Fixed-Term Agreements: Many tenants, especially those with families or those living in cities like Manchester where rent is competitive, prefer the security of knowing their rent won’t increase during the term, and they won’t face the risk of needing to move unexpectedly. For tenants, a fixed-term agreement offers peace of mind, particularly when they are planning to stay in one place for longer. Benefits for Landlords: For landlords, fixed-term tenancies provide a level of predictability. You know when your property will be available again, and you can plan for any repairs, upgrades, or rent reviews well in advance. Fixed-term agreements also reduce the administrative burden of frequent tenant changes. North West Insight: According to the Goodlord State of the Lettings Industry Report, 58.5% of tenants in the North West still prefer fixed-term tenancies. Many see it as a way to lock in stability, particularly in competitive rental markets like Manchester, where properties can be difficult to secure. Periodic Tenancies: Flexibility for Tenants, Uncertainty for Landlords Under a periodic tenancy, tenants are not tied to a long-term contract and can end the agreement by giving the required notice—usually one to two months. Labour’s Renters’ Rights Bill aims to make periodic tenancies the default for all renters, offering more flexibility and control over their living arrangements. Why Tenants Want Periodic Agreements: Flexibility is the main appeal of periodic tenancies. Tenants in more transient situations—such as students or professionals on short-term work contracts—appreciate being able to move with minimal notice. This can be particularly useful for those who are unsure of their long-term plans or may need to relocate for work or personal reasons. Challenges for Landlords: While tenants may appreciate the flexibility, periodic tenancies create more uncertainty for landlords. The prospect of frequent turnover can result in more vacancy periods, increased maintenance, and the added administrative burden of finding new tenants. This is especially true in areas like Manchester, where tenant demand is high, and filling vacant properties quickly is crucial for maintaining cash flow. North West Insight: Despite the push for periodic tenancies, only 29.7% of tenants in the North West prefer them. Most tenants still value the stability and predictability that fixed-term tenancies offer, even if periodic agreements provide more flexibility. The Pros and Cons of Both Tenancy Types Fixed-Term Tenancies Pros for Tenants: Security, predictable rent, and protection from sudden eviction during the term. Pros for Landlords: Guaranteed rental income for a set period, easier property management, and fewer administrative tasks. Cons for Tenants: Less flexibility to move quickly if circumstances change. Cons for Landlords: Tenants may be less willing to renew, especially if they’re dissatisfied with the property or if rents in the area have decreased. Periodic Tenancies Pros for Tenants: Flexibility to leave with minimal notice, ideal for those with uncertain or short-term plans. Pros for Landlords: Ability to increase rent more frequently and adjust terms more easily if market conditions change. Cons for Tenants: Less security, with the potential for rent increases or the need to move at short notice. Cons for Landlords: Increased risk of vacancy periods, higher turnover, and more frequent administrative work to manage tenants. What Tenants Really Want: Striking a Balance The data shows that while Labour’s reforms favour periodic tenancies, many tenants in the North West still prefer the security of fixed-term agreements. So how can landlords balance the desire for flexibility with the need for stability? Offer Flexibility in Fixed-Term Contracts - One way to meet tenants halfway is to offer flexibility within fixed-term agreements. For example, consider allowing tenants to break the lease early under certain conditions (e.g., job relocation or personal emergencies). This can make your property more appealing without sacrificing the benefits of a fixed-term agreement. Encourage Longer Tenancies with Incentives - Offering incentives, such as rent freezes or slight discounts for tenants who sign longer contracts, can help reduce turnover. Tenants may be more willing to commit to a fixed-term agreement if they feel they are getting added value. Open Communication with Tenants - Understanding your tenants’ needs is key. Whether they prefer stability or flexibility, having clear communication from the start will help you create tenancy agreements that work for both parties. Regular check-ins can help address any concerns early, reducing the likelihood of tenants leaving prematurely. Consider Market Conditions - In competitive rental markets like Manchester, where demand is high, offering flexibility can set your property apart from others. However, if the market slows, having tenants locked into fixed-term agreements may provide more security for your rental income. The Future of Tenancy Agreements As Labour’s Renters’ Rights Bill moves forward, landlords need to be prepared for the possibility that periodic tenancies may become the norm. While this may offer more flexibility for tenants, it introduces uncertainty for landlords who rely on predictable rental income and low turnover. The key to navigating these changes is understanding what tenants in your area want and offering tenancy agreements that provide a balance of flexibility and security. By staying informed and adapting your strategy, you can ensure your properties remain attractive to tenants, regardless of how tenancy laws evolve. Conclusion: Navigating the Changing Tenancy Landscape Whether you favuor fixed-term or periodic tenancies, the most important thing is to offer agreements that meet both your needs and the needs of your tenants. In the North West, where demand remains strong, there is still a clear preference for the stability that fixed-term tenancies offer. However, as the Renters’ Rights Bill progresses, landlords will need to adapt to ensure they remain compliant while also meeting tenant expectations. If you’re unsure about how these changes will affect your rental portfolio or would like advice on structuring your tenancy agreements, get in touch with us today. We’re here to help you navigate the evolving rental landscape with confidence. 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 tenancy preferences in the North West....
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....
Nov 11, 2024
Understanding and Tackling Mould in Rented Homes: A Guide for Tenants
Mould and damp issues can be frustrating for tenants, especially when they’re caused by condensation. As winter approaches and the temperature drops, condensation—and subsequently mould—becomes a common concern in many households. Understanding the causes and taking preventative measures can make a significant difference in protecting both your health and your home. In this article, we’ll explore how to identify mould caused by condensation, understand why it happens, and provide tips on how to manage it. We’ll also highlight relevant clauses in your Assured Shorthold Tenancy (AST) agreement, including those that outline your responsibilities around cleaning and ventilation. Identifying Mould Caused by Condensation Condensation is a leading cause of damp and mould in homes, especially in colder months. Unlike penetrating or rising damp, condensation-related damp is typically surface-level and can often be seen on walls, windows, and other surfaces where warm, moist air meets a cold surface. Here’s how to tell if you’re dealing with condensation-based mould: Location: Condensation damp usually appears on or near windows, external walls, and in areas with poor ventilation like bathrooms and kitchens. Appearance: Mould from condensation is often black or greenish in colour and tends to look patchy/spotty, spreading out in clusters on walls, ceilings, or around windows. Accompanying Signs: If you notice persistent fogging on your windows, damp spots on your walls, or water pooling on surfaces, it’s likely caused by condensation. Why Does Condensation Happen? Condensation forms when warm, humid air comes into contact with cooler surfaces. As the air cools down, it loses the ability to hold moisture, which then collects on these surfaces. Here are common reasons this happens in rented properties: Poor Ventilation: When there’s insufficient airflow, moisture in the air has nowhere to escape, leading to condensation. High Humidity Activities: Everyday activities like cooking, showering, and drying clothes indoors without proper ventilation can add moisture to the air. Cooler Indoor Temperatures: If a property isn’t kept warm enough, the temperature difference between warm air and cold surfaces increases, making condensation more likely. Tips for Preventing Condensation and Mould Growth Taking a proactive approach to prevent condensation can save you from dealing with mould growth down the line. Here are practical steps to help reduce moisture build-up in your home: Ventilate the Property Regularly Ensure your home is well-ventilated by opening windows (especially in the kitchen and bathroom) and using extractor fans where possible. This is particularly important after cooking, showering, or drying clothes indoors. Many AST agreements, stipulate that tenants must “take all appropriate precautions to ensure adequate ventilation.” Heat Rooms Consistently Keeping a steady, mild temperature can help reduce condensation. Try to avoid letting rooms get too cold, as this will encourage moisture to settle on cold surfaces. Even a low level of background heating can make a difference in colder months. While this can be a challenge when it comes to cost, it is an important step to present mould growth. Avoid Drying Clothes Indoors If possible, try to dry clothes outdoors or use a dryer with proper ventilation. If you need to dry clothes indoors, try placing them in a well-ventilated area and using a dehumidifier to absorb extra moisture such as a bathroom with closed door with the extractor fan on. Clean and Maintain Windows Many ASTs requires tenants to keep the windows clean. This is essential, as water droplets that are left, will make window frames wet and bread mould. Dirt and grime can trap moisture, making condensation more likely to form on windows. Regularly wiping down windows and their frames can help minimise condensation and mould. Use Dehumidifiers Dehumidifiers can help reduce the amount of moisture in the air, especially in areas that tend to stay damp. Portable, affordable dehumidifiers are widely available and can be a worthwhile investment for rooms that experience frequent condensation. Avoid the cheap disposable kinds and instead opt for an electronic appliance. Clean Mould Promptly If you notice mould beginning to develop, clean it off as soon as possible. AST agreements require tenants to clean items that have become soiled. Use an appropriate anti-mould cleaner, and wear gloves and a mask to avoid exposure. Addressing the mould early will help prevent it from spreading further. What to Do if Mould Persists If you’ve followed these preventative steps but continue to experience mould problems, it may indicate a structural issue such as poor insulation, inadequate ventilation systems, or other building-related problems. In such cases, notify your landlord or property manager in writing. They are responsible for ensuring the property is fit for habitation, including addressing significant issues that contribute to damp and mould. Your responsibility as a tenant is generally limited to maintaining reasonable ventilation and cleanliness, as stated in the AST clauses 8.2.8–8.2.10. Beyond that, it’s the landlord’s duty to tackle structural issues. Summary Checklist: Preventing Mould Caused by Condensation Ensure regular ventilation, especially in high-humidity areas. Keep a consistent mild temperature throughout the home. Avoid indoor drying of clothes or use a dehumidifier. Clean windows and frames to prevent moisture buildup. Use a dehumidifier in persistently damp rooms. Report ongoing issues to your landlord if mould persists despite following these steps. Final Thoughts Dealing with mould caused by condensation is a common challenge for tenants, but taking preventative steps can make a big difference. By understanding what causes condensation and taking proactive measures, you can help keep your living environment healthier and more comfortable. Remember, check your AST for specific clauses...
Nov 8, 2024
What Tenants Want: Insights on Periodic vs Fixed-Term Tenancies
As the UK government pushes forward with rental reforms, one of the most debated issues for both landlords and tenants is the type of tenancy agreement that works best: fixed-term or periodic. Labour’s Renters’ Rights Bill proposes to make all tenancies periodic by default, giving tenants more flexibility. While this change has been welcomed by some, others—particularly landlords—are cautious about what this will mean for their rental businesses. In the North West, where demand for rental properties is high, understanding what tenants really want from their rental agreements can help landlords make informed decisions about how to structure their lets. In this article, we explore the pros and cons of both periodic and fixed-term tenancies, and what tenants and landlords in the North West should know about the upcoming changes. Fixed-Term Tenancies: Stability and Predictability Traditionally, fixed-term tenancies—typically lasting between 6 to 12 months—have been the standard choice in the UK rental market. Under these agreements, both tenants and landlords commit to a set period, providing stability for both parties. Why Tenants Choose Fixed-Term Agreements: Many tenants, especially those with families or those living in cities like Manchester where rent is competitive, prefer the security of knowing their rent won’t increase during the term, and they won’t face the risk of needing to move unexpectedly. For tenants, a fixed-term agreement offers peace of mind, particularly when they are planning to stay in one place for longer. Benefits for Landlords: For landlords, fixed-term tenancies provide a level of predictability. You know when your property will be available again, and you can plan for any repairs, upgrades, or rent reviews well in advance. Fixed-term agreements also reduce the administrative burden of frequent tenant changes. North West Insight: According to the Goodlord State of the Lettings Industry Report, 58.5% of tenants in the North West still prefer fixed-term tenancies. Many see it as a way to lock in stability, particularly in competitive rental markets like Manchester, where properties can be difficult to secure. Periodic Tenancies: Flexibility for Tenants, Uncertainty for Landlords Under a periodic tenancy, tenants are not tied to a long-term contract and can end the agreement by giving the required notice—usually one to two months. Labour’s Renters’ Rights Bill aims to make periodic tenancies the default for all renters, offering more flexibility and control over their living arrangements. Why Tenants Want Periodic Agreements: Flexibility is the main appeal of periodic tenancies. Tenants in more transient situations—such as students or professionals on short-term work contracts—appreciate being able to move with minimal notice. This can be particularly useful for those who are unsure of their long-term plans or may need to relocate for work or personal reasons. Challenges for Landlords: While tenants may appreciate the flexibility, periodic tenancies create more uncertainty for landlords. The prospect of frequent turnover can result in more vacancy periods, increased maintenance, and the added administrative burden of finding new tenants. This is especially true in areas like Manchester, where tenant demand is high, and filling vacant properties quickly is crucial for maintaining cash flow. North West Insight: Despite the push for periodic tenancies, only 29.7% of tenants in the North West prefer them. Most tenants still value the stability and predictability that fixed-term tenancies offer, even if periodic agreements provide more flexibility. The Pros and Cons of Both Tenancy Types Fixed-Term Tenancies Pros for Tenants: Security, predictable rent, and protection from sudden eviction during the term. Pros for Landlords: Guaranteed rental income for a set period, easier property management, and fewer administrative tasks. Cons for Tenants: Less flexibility to move quickly if circumstances change. Cons for Landlords: Tenants may be less willing to renew, especially if they’re dissatisfied with the property or if rents in the area have decreased. Periodic Tenancies Pros for Tenants: Flexibility to leave with minimal notice, ideal for those with uncertain or short-term plans. Pros for Landlords: Ability to increase rent more frequently and adjust terms more easily if market conditions change. Cons for Tenants: Less security, with the potential for rent increases or the need to move at short notice. Cons for Landlords: Increased risk of vacancy periods, higher turnover, and more frequent administrative work to manage tenants. What Tenants Really Want: Striking a Balance The data shows that while Labour’s reforms favour periodic tenancies, many tenants in the North West still prefer the security of fixed-term agreements. So how can landlords balance the desire for flexibility with the need for stability? Offer Flexibility in Fixed-Term Contracts - One way to meet tenants halfway is to offer flexibility within fixed-term agreements. For example, consider allowing tenants to break the lease early under certain conditions (e.g., job relocation or personal emergencies). This can make your property more appealing without sacrificing the benefits of a fixed-term agreement. Encourage Longer Tenancies with Incentives - Offering incentives, such as rent freezes or slight discounts for tenants who sign longer contracts, can help reduce turnover. Tenants may be more willing to commit to a fixed-term agreement if they feel they are getting added value. Open Communication with Tenants - Understanding your tenants’ needs is key. Whether they prefer stability or flexibility, having clear communication from the start will help you create tenancy agreements that work for both parties. Regular check-ins can help address any concerns early, reducing the likelihood of tenants leaving prematurely. Consider Market Conditions - In competitive rental markets like Manchester, where demand is high, offering flexibility can set your property apart from others. However, if the market slows, having tenants locked into fixed-term agreements may provide more security for your rental income. The Future of Tenancy Agreements As Labour’s Renters’ Rights Bill moves forward, landlords need to be prepared for the possibility that periodic tenancies may become the norm. While this may offer more flexibility for tenants, it introduces uncertainty for landlords who rely on predictable rental income and low turnover. The key to navigating these changes is understanding what tenants in your area want and offering tenancy agreements that provide a balance of flexibility and security. By staying informed and adapting your strategy, you can ensure your properties remain attractive to tenants, regardless of how tenancy laws evolve. Conclusion: Navigating the Changing Tenancy Landscape Whether you favuor fixed-term or periodic tenancies, the most important thing is to offer agreements that meet both your needs and the needs of your tenants. In the North West, where demand remains strong, there is still a clear preference for the stability that fixed-term tenancies offer. However, as the Renters’ Rights Bill progresses, landlords will need to adapt to ensure they remain compliant while also meeting tenant expectations. If you’re unsure about how these changes will affect your rental portfolio or would like advice on structuring your tenancy agreements, get in touch with us today. We’re here to help you navigate the evolving rental landscape with confidence. 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 tenancy preferences in the North West....
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....
