Tim Trembath Chairman & Director of Residential Lettings

Joan Bull Residential Lettings Manager, Bishop’s Stortford

RICHARD MORRIS

Independent Mortgage Adviser

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

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:

Tenant demographics.

Pensioner

s

Increasin

g

16%

One person

households

24%

Age of

first time

buyer

29 (assisted)

Net

Migration up

252,000

2005-2010 2006-2016 2010 2010

Source: Communities and

Local Government

Buy to Let lending history

£44.6

billio

n £27.2

billio

n £8.5

billio

n

£10.4

billio

n

£13

billio

n 2007 2008

2009 2010 2011

Source: CML

• 1.3m BTL mortgages outstanding worth £152bn

– 12% of all mortgages

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

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

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

Cash & Geared investments Cash Key

Differences

Geared

£150,000 Investment £150,000

1 Property for

£150,000

Property 3 properties at 70% LTV

with

100% risk during void

periods

Risk Spread the risk of void

periods

Rental Income- Wholly

taxed after allowable

1 x Capital Growth

Income Potentially lower tax

liability off set against

mortgage interest.

Potentially

3 x Capital Growth

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

RICHARD MORRIS

Independent Mortgage Adviser

Lettings without the headache

Maria-Christina Peyman

Dispute Resolution Solicitor

Nockolds LLP

18 April 2012

1. Breaches of the tenancy terms

2. Landlord’s rights & obligations

3. Following service of s8 & s21 notices

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

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”

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

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

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

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

Richard Roberts Managing Director & Director of Commercial Services

What are the risks?

9 Stephenson Road, Southend On Sea, SS9 5LY

Occupier Demand • Location • Condition of Building • Planning

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

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