Section 21 Update For Landlords And Letting Agents

Essential Section 21 update for letting agents: Important changes just weeks away

Written by: ROSALIND RENSHAW | AUGUST 26, 2015

Important changes affecting letting agents and landlords are just weeks away, courtesy of The Deregulation Act.

The main changes are to the rules on serving a notice to quit under Section 21 of the Housing Act 1988, commonly known as a Section 21 Notice.

The changes come into force on October 1 and apply to tenancies entered into on or after that date.

The following guidance has been written especially for EYE readers by Michelle Cox, a lawyer at Greenwoods Solicitors.

“The main changes to be aware of are:

• It will no longer be possible to serve a Section 21 Notice until the tenant has lived in the property for a minimum of four months. This is designed to stop landlords serving a Section 21 Notice as soon as a tenant moves in. As before, the notice can’t expire in any event before the end of any fixed term.
• A Section 21 Notice will only be valid for six months from the date it was given. This means that if the tenant doesn’t leave, possession proceedings must be commenced within six months of the service of the Section 21 Notice. Different rules apply where the notice period set out in the tenancy agreement is more than two months.
• A Section 21 Notice will no longer be invalid if the date of possession given on it is not the last day of a tenancy period. This has traditionally been one of the main reasons that a Section 21 Notice fails. As long as a full two months’ notice is given, then unless another unconnected error is made, the Section 21 Notice will be valid.
• Landlords will be unable to serve a Section 21 Notice in circumstances where it is in breach of its legal obligations to a tenant. This includes obligations as to the condition of the property, the health and safety of the occupants and failure to provide an Energy Performance Certificate or a valid gas certificate for the property.
• When a Section 21 Notice is served, all rent that has been paid for any period where the tenant ceases to lives in the property must be repaid to the tenant. This has implications where a tenant who has paid their rent decides to leave when they receive the Section 21 Notice rather than when the notice expires. Where a tenant pays a full month’s rent but then is required by the Section 21 Notice to vacate or voluntarily vacates mid-way through the month, the tenant is entitled to be reimbursed the overpayment of rent for that period.
• One change that is already in force relates to the protection of deposits. All deposits ever taken which are still being held must now be protected. Once complete the deposit protection certificate and all prescribed information must be served on the tenant. If any deposit has not been protected or returned to the tenant a Section 21 Notice cannot be served.”

www.greenwoods.co.uk/knowledge-base

The above article is taken from: http://www.propertyindustryeye.com/essential-update-for-letting-agents-important-changes-coming-up-to-section-21/

This info may not be that interesting to you if you're a landlord, but it can have massive implications costing thousands if a Section 21 notice is not handled correctly. Is your current letting agent up to speed with the regulations.....?

Call me if needed on 01525 838848 or email graham@1st-house-lettings.co.uk 

www.1st-house-lettings.co.uk

Smoke & Carbon Monoxide Information for Rental Properties

Smoke & Carbon Monoxide Alarms

From 1st October 2015 new regulations will require landlords to ensure the fire safety of their tenants as well as offer protection against carbon monoxide poisoning.

The new regulations require that from 1 October 2015, landlords will be required to install a smoke alarm on every floor of their property and a carbon monoxide alarm in rooms containing a solid fuels appliance.

Landlords will be required to check that alarms are working at the start of every new tenancy and where a tenant notifies a landlord whenever alarms are faulty, they should be replaced.

Enforcement of the Regulations is the responsibility of the local housing authority, which can require landlords to fit alarms and if the landlord fails to do so has the power to arrange for them to be fitted. There is a power to levy a penalty charge of £5000 on the landlord.

The new regulations will apply to all ‘specified tenancies’, i.e. residential premises where a person or persons have a right to occupy the premises and rent is payable.

Further guidance will be issued by the Government and will cover a range of issues, such as testing, including hard-wired systems, clarity on which tenancies are affected and issues of overlap and interaction between these new regulations and others, such as the Regulatory Reform (Fire Safety) Order.

What Are Smoke Alarms:

Smoke alarms are self-contained devices that incorporate a means of detecting a fire (smoke detector) and giving a warning (alarm). They are about the size of a hand and are normally fitted to the ceiling. Smoke alarms can be battery operated (some are long life battery maintenance free) or they can be mains powered (which usually have a battery backup), smoke alarms can detect fires in their early stages and alert you giving you those precious minutes to enable you and your family to leave your house in safety.

Types of Smoke Alarms:

There are three types of smoke alarm available – ionisation, optical and heat, you can also have a combination of the different alarm types built into one unit or smoke alarms combined with carbon monoxide alarms.

Ionisation: These are the cheapest and cost very little to purchase. They are very sensitive to small particles of smoke produced by fast flaming fires, such as paper and wood, and will detect this type of fire before the smoke gets too thick. They are marginally less sensitive to slow burning and smouldering fires which give off larger quantities of smoke before flaming occurs.

Optical: These are more expensive but more effective at detecting larger particles of smoke produced by slow-burning fires, such as smouldering foam-filled upholstery and overheated PVC wiring. They are marginally less sensitive to free burning flaming fires. Optical alarms can be installed near (not in) kitchens, as they are less likely than ionisation alarms to go off when toast is burned.

Heat Alarms: They detect the rise in temperature from a fire and are insensitive to smoke. They can therefore be installed in kitchens. They only cover a relatively small area of a room, so potentially several heat alarms need to be installed in a large kitchen.

How Many Smoke Alarms to Fit:

The number of smoke alarms to fit in your home depends on your particular circumstances. Fires can start anywhere, so the more that are fitted, the higher the level of protection. For maximum protection an alarm should be fitted in every room (except bathroom) You should choose the type most suited to the risk in each room. For minimum protection the number to be fitted will depend on the type of home you live in:

If your home is on one floor, one smoke alarm, preferably of the optical type, may be enough to provide you with early warning of a fire.

If your home has more than one floor, at least one alarm should be fitted on each level. In this case a combination of optical and ionisation alarms, preferably interconnected, will give the best protection.

Important: Do not fit an alarm in the bathroom, as steam may trigger the alarm. In kitchens and garages where steam or exhaust fumes can occur, install a heat alarm.

Where to Fit Smoke Alarms:

Smoke alarms are simply screwed into the ceilings and should be fitted as close to the centre of the room as possible, but at least 30 centimetres (12 inches) away from any wall or light fitting. You should always make sure that your alarm is fitted in a place where it can be heard throughout your home – particularly when you are asleep.

If your home is on one level, you should fit the alarm in the hallway between the living and sleeping areas. If you have only one smoke alarm and two floors, put it where you can hear it when you’re asleep – in the ceiling at the top of the stairs leading to the bedrooms. Although ionisation and optical alarms are equally effective, optical alarms may be preferred in this particular situation as they are especially good at detecting slow-burning or smouldering fires.

If you have a TV or other large electrical appliance in your bedroom, you should fit a smoke alarm there. If your home has more than one floor then at least one alarm should be fitted on each level, in this case a combination of optical and ionisation alarms, interconnected, will give the best protection.

Important: The manufacturers’ instructions should be followed at all times, particularly where mains powered alarms are to be installed.

Maintaining Smoke Alarms:

Follow the manufacturers’ instructions, smoke alarms need very little maintenance. A few minutes of your time during the year will ensure the alarm is working and could help save a life, you should:

Once a week test each alarm by pressing the test button till the alarm sounds

Once a year change the battery (unless it’s a ten-year alarm)

Twice a year vacuum the smoke alarm using the soft-brush attachment to remove dust

After 10 years it is advisable to get a whole new alarm

What Is Carbon Monoxide:

Carbon monoxide (CO) is a colourless, odourless, tasteless, poisonous gas produced by incomplete burning of carbon-based fuels, including gas, oil, wood and coal. Carbon-based fuels are safe to use, it is only when the fuel does not burn properly that excess CO is produced, which is poisonous. When CO enters the body, it prevents the blood from bringing oxygen to cells, tissues, and organs.

You can’t see it, taste it or smell it but CO can kill quickly without warning, statistics show around 12 people die every year from CO poisoning caused by gas appliances and flues that have not been properly installed, maintained or that are poorly ventilated. Levels that do not kill can cause serious harm to health if breathed in over a long period. In extreme cases paralysis and brain damage can be caused as a result of prolonged exposure to CO.

Symptoms of Carbon Monoxide Poisoning:

Early symptoms of carbon monoxide (CO) poisoning can mimic many common ailments and may easily be confused with food poisoning, viral infections, flu or simple tiredness. Symptoms to look out for include:

Headaches

Breathlessness

Nausea

Dizziness

Collapse

Loss of consciousness

Tiredness

Drowsiness

Vomiting

Pains in the chest

Stomach pains

Erratic behaviour

Visual problems

Carbon Monoxide Alarms:

Carbon Monoxide (CO) alarms protect by giving an early warning when the poisonous gas is detected in the home. Installing a CO alarm is a simple DIY task, with most detectors only requiring a couple of screws, while some are free-standing and require no installation. Ideally the alarms should be installed next to potential sources of CO in the premises and in sleeping areas. The alarms should be at a horizontal distance of between 1 to 3 metres from the potential source and at least 1.5 metres from the ceiling if fitted on a wall. Avoid putting them too close to windows or air vents.

Important: The manufacturers’ instructions should be followed at all times.

Maintenance of Carbon Monoxide Alarms:

CO alarms currently last between 5 and 7 years, with the batteries normally requiring replacement every year or so (some alarms have a battery indicator or audible beep when the battery is low) Quite a lot of CO alarms also do not warn you when they reach the end of their operational life, which means that they could be entirely useless while giving the impression of protection, it is therefore important the alarm is replaced as per the manufactures instructions.

If Carbon Monoxide Is Detected:

Switch off any appliance and do not reuse until remedial action has been taken

Open all doors and windows to ventilate the room – do not sleep in it

Call Gas Emergency Freephone Number 0800 111 999

Contact a Gas Safe Registered engineer to make repairs

Visit your GP urgently and tell him/her that you believe your symptoms may be related to carbon monoxide poisoning and request either a blood and/or breath sample

The above info was taken from https://www.oaklet.co.uk/smoke-carbon-monoxide-alarm.html

The actual government legislation can be found here: 

http://www.legislation.gov.uk/ukdsi/2015/9780111133439/regulation/4

As you can see the government (in their infinite wisdom) have stated CO Alarms are compulsory in rooms with "a solid fuel burning combustion appliance", but make no mention of gas appliances! I believe that they'll soon spot this error and change it to include all boilers or appliances. 

I'm advising all our landlords to put CO alarms in now if they haven't already done so, and at 1st House Lettings we're currently checking the alarms status on all our managed properties over the next few weeks, including my own. Date stamped photo's will be taken as evidence to ensure we're all compliant and safe for tenants.

If you're a landlord and uncertain about your responsibilities then please give me a call on 01525 838848 or email me directly graham@1st-house-lettings.co.uk 

Have a good weekend!

The ‘Liquorice Allsorts’ Flitwick Property Market

The ‘Liquorice Allsorts’ Flitwick Property market

Despite the UK economy heading in the right direction with record low mortgage rates and unemployment  figures dropping,  the rate of property prices rising in Flitwick have tempered since the start of the year. This slow but sure downward trend in the rate of growth has been in evidence since mid-2014.  Property value increases continue to outpace the growth in salaries, however the gap is closing, helped by a lift in salaries over the last 6 months.  Property values in the East region as a whole are 8.8% higher than a year ago.  Compare this to the neighbouring regions of the East Midlands at 2.9% higher and the South East at 9.1%, the majority of the country continue to see annual house price gains - the exception being Wales which recorded a slight  decline of -0.6%.

Even with the tempering in house price inflation, it does not necessarily change my outlook that property prices are likely to be firmer over the second half of 2015 amid heightening activity in the Flitwick property market.  As stated in a previous article, there is a current shortage of properties on the market, restricting supply, which in turn will provide stability and support to Flitwick property prices. Therefore, my overall opinion is that Flitwick property prices will rise by 6% over 2015 and roughly the same in 2016.

Property investment is a long term business.  Buying the right sort of property is vital. I have recently been speaking with a number of Flitwick landlords about the importance of a balanced portfolio, when buying and renting out property. The balance between buying properties that offer good monthly returns (high yields) but quite often offer poor capital growth (i.e. they don't increase in value that much over the years compared with the average) verses properties that do go up in value quicker but often offer a lower yield.  So, what type of properties have performed best over the last few years in Flitwick, especially in terms of their capital growth?

When comparing what the average price of detached, semi detached, terraced and flats were selling for back at the start of the Millennium to the present.  The results are quite remarkably different, almost like a bag of Liquorice Allsorts, as the different types of property have performed poles apart over the last 15 years: 

• Detached Houses in 2000 were selling on average for £190,963 and so far in 2015, they have been selling on average in Flitwick for £403,300 a rise of 111%
• Semi -Detached Houses in 2000 were selling on average for £83,464 and so far in 2015, they have been selling on average in Flitwick for £228,833 a rise of 174%
• Terraced Houses in 2000 were selling on average for £77,868 and so far in 2015, they have been selling on average in Flitwick for £182,100 a rise of 134%
• Flats and Apartments in 2000 were selling on average for £46,500 and so far in 2015, they have been selling on average in Flitwick for £165,250 a rise of 255%

Moving forward, what should new and existing buy to let landlords do with this information?  Well, the questions I seem to be asked on an almost daily basis by landlords are:

• “Should I sell my property in Flitwick?”
• “Is the time right to buy another buy to let property in Flitwick and if not Flitwick, where?” 
• “Are there any property bargains out there in Flitwick to be had?” 

Many other Flitwick landlords, who are with both us and other local letting agents, like to pop in for a coffee, pick up the phone or email us to discuss the local property market, how Flitwick compares with its closest rivals (Milton Keynes, Luton and Bedford), and hopefully answer the three questions above.  I don’t bite, I don’t do hard sell, I will just give you my honest and straight talking opinion. I look forward to hearing from you if i can be of help:  01525 838848 - graham@1st-house-lettings.co.uk 

 www.1st-house-lettings.co.uk 

Flitwick Property Market – Bricks and Mortar!

Flitwick Property Market – Bricks and Mortar!

The Land Registry have just released their latest set of figures for the Flitwick Property market. It makes interesting reading, as average property values in Flitwick rose by 0.2% in May. This leaves average property values 10.3% higher than 12 months ago, meaning the annual rate of growth in the town fell to its lowest level since March 2015. When we compare Flitwick against the regional picture, East of England property values rose by 1.6%, leaving them 8.8% higher than a year ago. 

Obviously this is a far cry from the price rises we were experiencing in Flitwick throughout 2014. At one point (November 2014 to be exact) property values were rising by 11.3% a year. All the same, even with the tempering of the Flitwick property values in 2015, property values are still higher. This is good news for local homeowners who had been affected by the downturn after 2007 and still find themselves in negative equity. 

However, the thing that concerns me is that the average number of properties changing hands (ie selling) has dropped substantially over the last 12 months in the town. In March 2014, 13 properties sold in Flitwick but in March 2015, that figure dropped to 10.  I have been in the Flitwick property market for quite a while now and the one thing I have noticed over the last few years has been the subtle change in the traditional seasonality of the Flitwick property market. It has been particularly noticeable this year in that the normal post Easter flood of properties coming onto the market was not seen. This has made an imbalance between supply and demand, with less houses coming onto the market there is simply not as much choice of properties to buy in Flitwick and with the population of Flitwick ever increasing, this will generally strengthen house price growth for the foreseeable future.

So what does all this mean for Flitwick landlords or those considering dipping their toe into the buy to let market for the first time? For many people, buy to let looks a good investment, providing landlords with a decent income at a time of low interest rates and stock market unpredictability. 

However, if you are thinking of investing in bricks and mortar in Flitwick, it is important to do things correctly. As an investment to provide you with income, for those with enough savings to raise a big deposit, buy to let looks particularly good, especially compared to low savings rates and stock market yo-yo’s. I must also remind readers, landlords have two opportunities to make money from property, not only is there the rent (income), but with the property market bouncing back over the last few years, property value increases has spurred on more investors to buy property in the hope of its value continuing to rise.

Savvy landlords with decent deposits can fix their mortgages at just over 3% for five years, making many deals stack up. Nevertheless, low rates cannot stay low forever, because one day they must rise and you need to know your property can stand that test. I saw some Flitwick landlords struggling in the mid noughties, when interest rates rose from 3.5% in July 2003 to 5.75% in July 2007. That might not sound a lot, but that was the difference of making a £100 a month profit in 2003 to having to make up a shortfall in the mortgage payments of £100 per month in 2007.


Its true many landlords (including me!) were thrown a life raft when the base rate dropped to 0.5% in March 2009. Whilst interest rates have remained there since, mark my words, they will rise again in the future. However, even with the potential for costs to rise, demand for decent rental properties remains high as there are ever more tenants in the market, driving up demand and thus rents. The British love of bricks and mortar plus improving mortgage deals also add up to fuel the buoyant Flitwick property market.

If you'd like a chat about anything to with investing around Flitwick and Ampthill then give me a call on 01525 838848 or email graham@1st-house-lettings.co.uk and i'll get back to you personally. Or you can arrange to drop in for a coffee at my office - 1st House Lettings, The Rufus Centre, Steppingley Road, Flitwick - next to the new Leisure Centre that's currently under construction.

www.1st-house-lettings.co.uk

6.72% Gross Yield in Kempston

http://www.rightmove.co.uk/property-for-sale/property-48577792.html?premiumA=true

Look at this for a bargain, a 3 bedroom two storey flat for £125k! Going by the photo's it looks in good order, the kitchen looks very modern, and the rooms look huge.

The bad things are it's not the most attractive place from the outside, the EPC rating is F, the heating is just electric plug in heaters, and there's no mention of ground rent or maintenance charges or the length remaining on the lease. All would need to be investigated properly.

The weird thing is there's a gas hob in the kitchen, so you can easily fit a combi boiler and bring the EPC rating straight up to a D or C, and you might even get the cavity wall insulation done for free if there's any grants going.

This must surely rent for £700pm or more, so if bought at the asking price it makes a healthy 6.72% gross yield!

2 Bed House in Barton-le-clay for £165k

Barton 2 bed house

This looks like a solid investment if the property doesn't need too much spending on it, and demand for 2 bed houses in Barton is always strong. The asking price of £165k seems good for todays market, in fact try finding a 2 bed house in the MK45 area for under £200k and you won't find anything else!

The selling agent have stated it would rent for £650pm, but i'm certain that with a complete redec it would likely achieve £700pm+. Definitely worth a look if you're looking to invest in the area right now.