HB only benefits rich landlords

I read with interest this rather misguided commentary on the relationship between housing benefits, landlords and rents.  It suggests that housing benefit is just forcing up rents and going straight into the pockets of rich landlords.

In my view it fails very simply to recognise the commercial realities of renting to tenants with benefits. Landlords need a premium to make it worth it.

Housing benefit is not fueling rent increases
His argument is that housing benefit increases are fueling rent rises and thereby feathering the nest of landlords.  Firstly, outside the bubble of London real rental levels aren't rising.  Payments from the public sector far from forcing up rents just allow benefit tenants to compete with private sector tenants.  Even then they often cannot afford the best properties or the higher rents for the better areas.  A landlord renting to a tenant on benefits faces exposing themselves financially to individuals with limited or no capital and by definition limited income.  The reality is that a small financial set back will often mean that a landlord will not receive their full rent and will be forced to shoulder the tenants hardship. 

Taking benefit tenants means taking on more risk
Any businessman & I include landlords as small businessman is prepared to take on additional risk if they are compensated by extra reward.  This means additional rent and or a guarantee that they will receive the entire housing benefit.  Without this the economics of renting to benefit tenants simply doesn't work.  If this becomes the case benefit tenants will be forced to live in the cheapest & the worst areas or government and us the taxpayer will be forced to pay the astronomical costs of having to provide and manage massively more public sector housing. 

If renting to tenants is so attractive why are so many landlords leaving benefit tenants alone?

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Expense editing just got easier

Expenses are one part of the PM3s system where you have to type the same thing again and again. Same expense descriptions, same providers. When three landlords in a week pointed this out we thought we should act. Now, as you type the system pops up a list of what you've entered previously.

We hope you do someting fun with the time you'll save.

6 months rent up front

I have just marketed a property to let and have just had a tenant looking to take the property on a 6 month tenancy.  The letting agent came to me all excited that they had found a tenant looking to pay for the rent 6 months up front. BRILLIANT!!!!

Up front rent - the perfect solution?
From a landlords point of view a 6 month up front rental payment seems to answer all a landlords prayers.  Guaranteed rent for the entire tenancy.  The letting agent was practicality leaping off the chair thinking that I had won the equivalent to the landlord lottery. All a landlord needs to do is to issue their section 21 notice a couple of months before the end of the tenancy and then they are guaranteed the rent for the entire duration of the fixed term tenancy.  WRONG!

'Rental red herring'
It turns out after further investigation that the tenant was unemployed and had come into a small inheritance.  They clearly could afford the rent for a short period but then what?  If their money has gone and without any other source of income than at the end of 6 months what's going to happen?  They stop paying rent.  Even having issued a section 21 notice I know from personal experience that it could be anything from 3-4 months to legally get possession of my property back.  So  I might have got 6 months rent but perhaps only got 7 months out of the 10 in rent.  On top of this there maybe all the hassle of trying to get possession of the property.  Suddenly, the whole situation seems less attractive. So my advice to landlords is don't get carried away by the prospect of all that rent in one go.  Dig deeper and think carefully about the reasons why.  It may be a great opportunity but it also could turn out to be a poisoned rental chalice!

Ignorance costs - "Letting Essentials"

BTL mortgages at lowest ever rates

The good news for landlords and prospective landlords is that the average interest rates charged for both fixed rates and variable rate deals has fallen to the lowest levels ever.

Buy-to-let products at post crash high
The number of products on the market to service the growing interest in buy-to-let mortgages has risen to highs not seen since 2008, according to data from Moneyfacts, with the number of products on offer in July was up by 43 per cent to 665 compared to July 2013.

Average interest rates at lowest ever levels
At the same time, average interest rates charged for both fixed and variable deals have fallen to the lowest levels ever, at 4.17 per cent for the average fixed rate and 4.03 per cent for the average variable rate.

Mortgage Search - all the market

American property investors get burned

It's easy to say we told you so, but reading recent stories in the Guardian of naive UK property investors buying property in the US makes difficult reading for any property investor.

There are parallels in this story which can be drawn with all types of property investment.  The essence of this tale is that surely if something is such a good thing then you would want to keep it all to yourself?  So should you trust somebody who is trying so hard to sell you it to you. 

The interesting thing that after carrying an excellent piece on the fall out from these scheme is that at the bottom of the article in the related content box was a link to another Guardian article back in 2011 which highlighted the opportunities of buying these same properties.  Responsible or just journalism?

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Why London landlords are selling up

This piece in the London Standard gives an interesting insight on why one London landlord is selling up.  Is she mad or does it make sense for London landlords to bank some of their profits?

I suspect that your view will depend on how old you are and how long you have been a landlord for.  Let's face it being a landlord is not the hardest job in the world.  Having said that there are the inevitable trials and tribulations of running a letting business.  All this is fine when you are young and enthusiastic.  Maybe when you get a little older and dare I say a little richer you don't always 'need the hassle'.  The average time a landlord holds a property for is 19.2 years according to the latest landlord survey by the Association of Residential Letting Agents (ARLA) in June 2014.

It's interesting to read that the landlord intends to use their 'cash' to set up a dog sanctuary in the country.  Do you intend to sell up and what do you intend to do with your cash, once you finally cash in your property chips?

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