Find your next rental property through auctions

Building up a rental property portfolio is a time consuming and expensive endeavour, so it is worth exploring alternative avenues that could potentially save you money. After recent economic hardship the opportunity arises where landlords are able to take advantage of low house prices and find a new buy to let investment at a reduced cost. Auctions are the best way to reduce your initial investment costs, build your portfolio quickly and save thousands on a property’s market value.

There are a number of auction houses across the country, specialising in both residential and commercial properties, which hold regular auctions for thousands of properties each year, ranging from listed buildings to small urban apartments. Properties that go up for auction may be in need of renovation, or the vendor may require a quicker sale than can be offered through a regular estate agent; whatever the reason, there is always the opportunity to get a bargain investment when buying at auction. As the purchase process is shortened and you are not waiting for a chain to complete, it gives you the opportunity to turn around the property much quicker and start receiving a rental income sooner.

When attending a property auction you need to be prepared so that you can move quickly; making sure that you have your buy to let mortgage in place or ensuring that you have the cash funds available at the time of purchase is paramount to making your purchase at auction successful.
Many landlords are now turning to auctions as their next, or first, step in the world of rental property, tapping into a valuable resource that can save you both time and money. By participating in your local property auction you can watch your portfolio grow as your investment costs reduce.

Rental void figures

52 percent of landlords reported having had a rental void period in the last 12 month period. This figure is down from the 55 per cent recorded during the last three months of 2009. The data also showed that the average duration of voids dropped from 19 days to 17 days.

Read full report from the NLA

Massive increase in defaulting tenants

A report shows a massive increase in landlords having to claim on rent guarantee insurance because of defaulting tenants.

The Telegraph report a 58 percent increase in the second half of 2009.

Read full article here

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Good 2010 or bad 2010 - can anyone predict what kind of year it will be for landlords?

Confidence is apparently returning to the buy-to-let property market after a rebound in annual returns according to LSL Property Services, the UK's biggest lettings agent group.

They are predicting that landlords will see annual returns averaging £16,000 next year as the housing market continues to stabilise.

However before landlords get too excited ARLA warned yesterday the market would be tougher next year.

Whose to know?

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150,000 tenant evictions this year

Tenant eviction service Landlord Assist, predict that by the end of this year 150,000 tenant evictions will have gone before the courts.

Landlords should expect another difficult year ahead.

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A quarter of landlords are making a loss or breaking even

Even though interest rates are at a all time low a new survey reports that a quarter of all landlords either broke even or made a loss in the 3rd quarter of this year.

The online survey from market research firm BDRC surveyed more than 500 landlords in September.

Heaven help those landlords when interest rates go up.

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ARLA response to rise in rental arrears

“Latest figures from the NLA highlight that nearly three quarters of landlords have experienced rental arrears. Our research shows that 28% of landlords have seen an increase in the number of tenants struggling to meet rental payments – while this is down on the previous quarter (32%), it is still a worrying issue. “Rental arrears is more common during a recession as redundancies occur and tenants’ financial stability changes. With the private rented sector continuing to grow, it is important that those tenants struggling to meet payments are supported. “For landlords, using an ARLA or NAEA member letting agent is one way to help prevent payment problems, as an approved agent will find suitable tenants, carry out credit checks and draw up the Tenancy Agreement – ultimately protecting both the landlord and tenant. In addition rental protection insurance, of which NLA highlights the benefits, is available through an approved agent.”

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Elephant is forced to get second job as a taxi driver to supplement BTL rental losses

Elephant has taken an evening job on the taxis to supplement the rental losses on his BTL property portfolio.

According to Fergus Wilson, more and more landlords could be facing a slaughtering on their cashflow when interest rates increase from their current historic lows.

Causing more landlords to follow elephant into second jobs to supplement rental losses.

Who said an elephant 'never regrets', oh yes nobody...sorry, it's 'never forgets.', oh forget it!

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Can't get no sleep - landlords worry about cashflow and rents

Landlords are losing sleep according to research from Direct Line, a recent survey shows that landlords are very worried about the impact the recession is having on their buy to let properties.

30% of the landlords polled admitted to worrying about whether they will receive the agreed rental income from tenants and over 20% were worried about their cash flow.

Landlords need to try and sleep with lavender under their pillow.

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Paul Shamplina of Landlord Action comments on couple facing prison for conning homeowners out of thousands

In response to the recent news story about the couple who conned homeowners out of thousands by squatting in properties that they had no intention of buying, Paul Shamplina, Director of Landlord Action, comments: “we have evicted many professional bad tenants over the years who simply go from one property to another duping landlords into renting their properties whilst having no intention of paying. In my opinion this couple are most probably a worst case scenario as they knew their victims and charmed them into believing that they would purchase their properties. They coaxed their way into the property by promising to pay the rent until the purchase of the property was completed, but the couple didn’t pay and, what with the downturn in the property market, cost their victims thousands in unpaid rent, a loss of sale and left them with legal fees. It was only due to a tenacious detective, who came across the husband 30 years ago, that led to their prosecution. The worst case of a serial bad tenant that we have dealt with conned five landlords and owed a combined total of £120,000.”

Landlord Action

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Landlords face growing issue of unpaid local housing allowance from tenants

This BBC article warns landlords of the perils of the Local Housing Allowance.

Reporting on the growing number of landlords who are facing unpaid rents from tenants.

Read full BBC article

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Rental Yields in London go Below 4% - Shocker!

Yields are hitting shockingly low levels on rental property, however they still exceed the returns on offer from the majority of alternative savings options. However it is still worrying times for landlords whose business model is based on getting 'x' in to pay 'y' to create the return of 'z'.

Maybe it would be more relaxing if the money was in the bank and not bricks and mortar?

Landlords with rental properties in prime central London have seen their return slip below 4 per cent for the first time in nearly two years, according to the latest data from Knight Frank, the estate agent. - Read the full article in the FT

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Going potty

One of Property Sparrow’s tenants has run up some rent arrears. He’s about a month and a half behind. He’s a bus driver in London and it seems a steady job with a reasonable salary.

The thing is, his girlfriend has recently had a baby and the lettings agent says that he’s finding it hard to manage to pay for everything at the moment. Rent or nappies – that’s his dilemma.

He’s going to pay an extra £100 per month to clear the arrears.

Property Sparrow hopes that he's good at potty training.

Bad News Continues To Shroud Landlords and BTL

Further bad news for BTL property investors including falling rents, longer rental void periods and falling equity values.

For the full depressing picture read the article in Citywire.

Plus my cat has died, love forever to Marvin.

Yours sadly Margo.

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Landlord Action report record number of court hearings in one day

Landlord Action, a company specialising in tenant eviction, had a record number of court hearings in one day when 16 cases were heard in courts around the country on Tuesday 9th June for landlords they have acted for.

Paul Shamplina, Landlord Action director feels that this is a sign of the times, commenting, “16 cases in one day is the most we have come across since the company started in 1999 and just goes to show how many landlords are having to take their tenants to court in order to recover money owed to them. Of course, some cases are genuine hardship but there are others who have no intention of paying up. A lot of landlords nowadays are people who went into the buy to let business as a way of saving money for their retirement or owners who have had to let out their home in order to try to hold on to it during tough times and they end up actually losing money. One of the cases heard on Tuesday was for arrears amounting to £15,500”

Twelve different courts including Woolwich, Bristol, Oxford, Birmingham, Croydon and Warrington all heard cases but one court seems to have becoming increasingly busy for repossession cases as Paul explains, “Watford appears to be a particularly common area at the moment with four hearings. Possession cases are listed on the same day each week but a pattern has shown them increasing here over a period of time.”

All hearings produced a positive result for the landlords concerned with orders made for possessions and judgement for the arrears, interest on the arrears and costs against the defendant, with the exception of one that was adjourned due to a dispute in the arrears figure.

Problem tenants - Landlord Action

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Peterborough Landlords Struggles To Get Rent from LHA Tenants

A PETERBOROUGH private landlord has hit out at changes to housing benefit rules – claiming some tenants are "taking their rent money and running".
Altaf Hussain says he has been swindled out of £2,500 since the Local Housing Allowance (LHA) came in last April, which saw housing benefit paid directly to private tenants rather than landlords. - Read more in the Peterborough Telegraph

The National Landlords Association backed his claims, revealing they had been inundated with calls from landlords out of pocket since the LHA came into force.

Are you struggling to get the rent out of your LHA tenants?

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Tips for Landlords Looking to Minimise Rent Arrears from Tenants

We have just had this set of tips sent through

Top Tips for Landlords to Minimise Rent Arrears
In the current economic climate and with more ‘accidental landlords’ than ever letting property, it’s never been more important to do all you can to avoid rent arrears.

Take these straightforward steps to reduce the risk of prospective tenants slipping into rent arrears.

Bank on It
Ask potential tenants for at least three months’ worth of bank statements so you can see their salary going into their account and have evidence that they’ve been paying their rent regularly. Bank statements will also give you an idea of how affordable they will find the rent that they will be paying you.

Work it Out
Obtain an employers reference in writing and don’t take it as read that the reference is current. Google the company for the phone number (don’t rely on being given it by the tenant) and call your prospective tenant’s employer to confirm that the company exists and, equally importantly, that they are still an employee.

Get a Reputation
Speak to your prospective tenant’s previous landlord/s to establish whether they were a reliable tenant; an invaluable way of flagging issues that could be hiding around the corner.

Vote of Confidence
Check the electoral roll to confirm that the tenant has given you an accurate previous address. This can show that they’ve not been trying to avoid being liable for council tax and also helps to confirm whether a reference from a previous landlord is current and genuine (in the event that you’re unable to speak to them directly).

Passport to a Trouble-Free Tenancy
Ask the prospective tenant for a copy of their passport and visa, if required. This not only helps confirm their identity, but also whether they can legally remain in the country for the entire period of the tenancy.

Guarantee any Doubts
If you are uncertain that the tenants will be in a position to pay their rent every month for the term of the tenancy, secure a UK-based guarantor who will then be liable to pay the rent, should the tenant default.

Ask an Expert
If all this sounds like an awful lot of work, use a reputable letting agent to arrange your tenancy and ensure that they take these steps on your behalf to carry out a rigorous suitability assessment before your tenant moves in.

Insure your Peace of Mind
As a last resort, and for added peace of mind, consider taking out an insurance policy to cover the rent in the event that the tenant doesn’t pay – but bear in mind that this can be an expensive option.

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Landlord Face Repossession as Tenants Fall into Rent Arrears

The National Landlords Association reports that 37% of landlords have tenants are in arrears with their rent and in the past six months, 44% of landlords have experienced rental arrears.

Unpaid rent is forcing more and more landlords into repossession due to unpaid mortgage repayments.
These struggling landlords are often highly geared with high loan to value mortgage levels, and therefore are unable to seek out lower mortgage rates now the BTL mortgage market has implemented lower Loan to Value rates for all new BTL mortgages, with maximum LTV of 75% instead of the lofty 90% LTV of recent years.

This leaves many of these struggling landlords stranded on their existing mortgage with no options to change to better deals.

Many landlords are now literally stuck between a rock and a hard place.
Read more in Citiwire

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Rents Stabilise after Recent Falls -

Hopefully the worrying downward trend in rental values has flattened out, and landlords can start to stabilise cashflows and re-evaluate their longer term business plans. (if they had one in the first place).

This Times article reflects on the current state of the rental market, and comments that ' The lower end of the market is beginning to bottom out, estate agents say, after a sharp decline in rents over the past year. '

The new Rent Index site shows that average rents took a dip in October 2008 through to January 2009 but seem to have flattened out over February and March. The average rent of rental property in England and Wales currently stands at 581.969 according to the Rent Index.

We will monitor the fluctuations in average rents to see if they will retain levels over the coming months.

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Landlords Should Save Rental Profits Ready for Increases in Mortgage Interest Rates

I have been talking of the need for landlords to build a 'landlords war chest' whilst interest rates remain low.

We have discussed the fact that 'cashflow' is the all important factor for landlords wanting to avoid repossession over the coming years.

As interest rates hit historic lows many landlords are seeing increased positive cashflow, but this won't last, landlords need to save this added income to supplement cash flow when interest rates increase again or alternatively start paying off their BTL mortgage loans.

Nick Hopkinson, Director of Property Portfolio Rescue, comments:"Landlords are experiencing falling demand and an increase in void periods, but those on tracker and variable rate deals have been given a reprieve by falling interest rates, and are enjoying a period of strong positive cash flow. Interest rates will not stay at this level indefinitely, however, and when borrowing costs increase again, as they undoubtedly will, investors will find themselves trapped and with insufficient equity remaining to remortgage.

"This ticking time bomb could prove disastrous. Cash flow presents the biggest risk in property investment and landlords must act now rather than be lulled into a false sense of security, in the hope that the market will bounce back. Wise investors will act cautiously over the coming months while rates remain low, taking advantage of a temporary boost in income to bolster their cash reserves. Interest-only mortgage borrowers might consider making overpayments to reduce their debt, increasing equity and improving their chances of qualifying for a good fixed rate deal when interest rates start to rise."

Read more in Moneywise

Read more in Mortgage Introducer

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