Are you a landlord, or thinking of becoming one? Nockolds Solicitors and Mullucks Wells provided a free briefing on the key issues affecting the rental property market on April 18th 2012, find out more here.

1. Tim Trembath
Chairman & Director of Residential Lettings

2. Joan Bull
Residential Lettings Manager, Bishop’s Stortford

3. RICHARD MORRIS
Independent Mortgage Adviser

4. Buy to Let market Snapshot
 Still 12% of the whole market
 More tenants than properties
 Rents are rising
 Void periods decreasing
 New Lender Entrants to the market – mostly through
Intermediaries
 555 products available as at March 2012 compared to just
214 in July 2010 and a low of 145 products in 2009
Source: CML, ARLA
and Trigold

5. Drivers for increased rental demand
 Significant barriers to home ownership
 Reduced numbers of FTB’s
 Higher Student numbers
 A growing population and more households
 More pensioners and increased immigration
 Let’s look at these in more detail:

6. Tenant demographics.
Pensioner One person Age of Net
s households first time Migration up
Increasin buyer
g 24% 252,000
29
16% (assisted)
2005-2010 2006-2016 2010 2010
Source: Communities and
Local Government

7. Buy to Let lending history
£44.6
billio
n £27.2
billio
n £8.5 £10.4 £13
billio billio billio
n n n
2007 2008 2009 2010 2011
• 1.3m BTL mortgages outstanding worth £152bn
– 12% of all mortgages
Source: CML

8. Buy to Let Lending today
 The average LTV across portfolios is 46%
 Many Landlords are enjoying low SVR rates with their
current provider
 Some lenders will allow redemption without fees or
given incentives
 The benefit of low rates may be lost due to low gearing
(LTV) and higher tax takes
 Solid tax advice should be sought to maximise income/minimise tax
liability
Source: ARLA Review and
Index – Q3 2011

9. Buy to Let Lending today
 73.6% of Landlords DO NOT expect to sell their
property in the next 12 months
 8.6% of Landlords DO expect to sell their property in
the next 12 months
 The average investment period is 19 years with 35.5% of
landlords expecting to keep their property for 20+ years
 73.6% of respondents report more tenants than
properties available for rent
Source : ARLA Review & Index
2011

10. Buy to Let Lending
 26.7% of landlords DO expect to buy more property in the
next 12 months
 AVERAGE HOUSE PRICE
 Quarter 1 1985 - £33200
 Quarter 1 2005 - £152790
 Quarter 4 2010 - £163244
 March 2012 - £163327
Source: ARLA review and Index 2011
Nationwide Building Society

11. Cash & Geared investments
Cash Key Geared
Differences
£150,000 Investment £150,000
1 Property for Property 3 properties at 70% LTV
£150,000 with
100% risk during void Risk Spread the risk of void
periods periods
Rental Income- Wholly Income Potentially lower tax
taxed after allowable liability off set against
mortgage interest.
1 x Capital Growth Potentially
3 x Capital Growth

12. Buy to let lending Facts
 Minimum 20% Deposit (best rates with higher deposits)
 Minimal earned income required
 First Time landlords
 No maximum Age
 Interest only or Capital and Interest repayments available
 Rental coverage 125% of interest only payments
 HMO’s (homes of multiple occupancy) available
 Light refurbishment products available

13. RICHARD MORRIS
Independent Mortgage Adviser

14. Lettings without the headache
Maria-Christina Peyman
Dispute Resolution Solicitor
Nockolds LLP
18 April 2012

15. 1. Breaches of the tenancy terms
2. Landlord’s rights & obligations
3. Following service of s8 & s21 notices

16. 1. Breaches of the tenancy terms
Failure to pay the rent
• Do not ignore it
• Arrears of 2 months or more – “Section 8 Notice”
Bringing a pet in to the property
• What are the grounds for issuing a claim for possession
• “Ground 12” a discretionary ground
• What is the impact of a discretionary ground

17. 2. Landlord’s rights and obligations
I gave my tenant 24 hours notice, now I want to
enter the property
• S11 Landlord & Tenant Act 1985 and s16 Housing Act 1988
• Reasonable access for repairs
• Quiet and peaceful enjoyment and permission
• The tenant who persistently says “no”

18. Has the property has been deserted?
• Landlord is able to take possession – Housing Act 1988
• Illegal eviction – Protection from Eviction Act 1977
• Consequences of illegal eviction
• Steps to ascertain desertion
Is a landlord required to supply an EPC?
• Yes - The Energy Performance Regulations 2011 and 2012
Letting a property for 4 months
• Housing Act 1996

19. What notice do I have to give to get my property
back?
• S21 Housing Act 1988
Taking 6 months rent in advance
• Ensuing periodic tenancy and the rental period

20. 3. Following service of a s8 or s21 notice
• When to use which
• What are the timescales
• What happens if the tenant does not go
• Issuing the possession claim – accelerated procedure / standard
procedure
• The possession date passes but the tenant still has not gone
• Bailiff’s appointment

21. Summary
• Keep rent arrears in check
• Make sure that any notices are correct, any errors simply
lead to more time and if arrears are an issue then higher
arrears
• Consider whether you are likely to recover the arrears – if
not might a s21 notice be more time and cost effective
• Association of Residential Letting Agents
• LASTLY in your packs you will see details of the fixed fee
service we offer for s21 notices and the ensuing work

22. Richard Roberts
Managing Director & Director of Commercial Services

23. What are the risks?

25. 9 Stephenson Road, Southend On Sea, SS9 5LY

26. Occupier Demand
• Location
• Condition of Building
• Planning

27. Tenant & Lease
• Covenant
• Length of Lease
• Income Cover Ratio

28. Loan to Value
• Loan to Value
• Amortisation
• State of the Market