Tenants make for poor Gardeners!

 

Mary Mary quite contrary how does your garden grow?

 

Well in the land of the tenant often not with silver bells, cockle shells and pretty maids all in a row! More like rampant weeds, misshapen bushes and pathways overgrown. It is a fact that rarely does the average tenant look after gardens and outside space as well as the average homeowner.

 

At the end of a tenancy a house can be cleaned, a carpet can be changed and paintwork and walls can be spruced up fairly easily. However it may take many months to bring a garden back to its former glory. A garden is the face of a property the first thing that you see; a poorly maintained garden can lose you a tenant, reduce the rental value and can lead to an uncomfortable dispute with the on going tenant. Alan Titchmarsh, Monty Don and God bless him local favourite Percy Thrower would be less than impressed with the efforts of many.

 

Landlords and garden lovers, the way to avoid a problem (particularly for the larger garden) is to simply provide a gardener in the first place. You choose the gardener and you decide on the frequency of the visits; in doing so you then ensure the quality is maintained. Given that houses with gardens are like 'gold dust' at the moment, you incorporate the cost of this into any rental negotiation. The alternative is that you split the obligation and give the tenant a very clear remit for maintenance. For example to cut the grass, weed the borders and clear the pathways. Write into the tenancy that if this is not adhered to, you reserve the right to employ a gardener and specify the additional cost.

 

To limit a dispute take plenty of photographs of the garden before the tenancy starts and ensure that you frequently inspect. Document and communicate any dissatisfaction and agree a way forward before it is beyond a resolution. Avoid pets particularly dogs, be wary of trampolines and be cynical about any tenant who claims to be a gardening God (or Goddess). Divine intervention, a lot of time and money is the only thing that can help your garden then.

 

If you want help drafting a tenancy agreement that tightens up the garden obligations then please call by and have a chat.

What makes a Good Landlord?

Our last article looked at the reasons why ordinary people become landlords. It concentrated on the opportunity for individuals to take control over their investment future by buying a property of their choosing. It reflected on the solidity of buying ‘bricks and mortar’, set against a backdrop of increasing property prices and a trend towards renting locally.

 

 

Many potential landlords are put off becoming one, because they perceive they are either not made of the ‘right stuff’ or that being a landlord is fraught with problems. The misconception is you have to be ‘hard-nosed’, ‘rhino-skinned’ and capable of bulldozing your way through potential problems without a care. This is not true. They also perceive that there is a problem waiting for them around every corner, and that any income benefit will be offset by the hassle of managing a property. This is also not true. Certainly if you are a good landlord or you employ a good agent then with a little luck you should most of the time be able to sit back and enjoy the income and other comforts of being one.

 

There isn’t a one fits all description of what constitutes a good landlord since one person’s ‘good’ is another person’s ‘average’. However there are some positive traits which most of would recognise. Indeed the question of what qualities you need to be a good landlord, could easily be substituted for what makes a good boss, teacher or parent. Take it as a given that good landlords are those that abide by their legal and contractual obligations. A really good landlord is one whose ‘mettle’ is tested by facing a problem and in dealing with it are tolerant, understanding, even-handed and decent with it. Further they tend to act swiftly, by resolving a problem where a reasoned cost-effective solution is obvious and readily available.

Good landlords like good teachers, bosses and parents are respected by those around them. In this instance they are respected and trusted by their tenants, their neighbours and those contractors that work with them.

 

The best landlords balance and weigh to a nicety the interests of themselves with those of their tenants. This is not easy since your own standards are not necessarily those of your tenants.  Likewise you may have to act contrary to your own natural instincts; sometimes you will have to show caution where you are carefree by nature or vice versa.  Like all good parents/teachers and managers the ability to use common sense, not to get too emotional and to judge the situation on its merits will usually serve you well.

 

Being a landlord is not for everyone. However if you are decent and reasonable and you offer a good quality property, more often than not you will be rewarded with a good tenant who reciprocates your own qualities. After all ‘if you throw a pebble in the water’ don’t you see your own reflection?

 

Investment Spot of the Day

Packsaddle Penryn

For Sale through Laskowski & Co Estate Agents at £179,950

Click the link below for full agents details.

http://www.rightmove.co.uk/property-for-sale/property-50953973.html

From the photos this 3 bedroom end terrace is clearly beautifully presented throughout and benefits from modern kitchen and bathroom suite and very good general decoration.

Situated in a quiet location with open outlook to the rear and two car parking spaces to the front it will appeal equally to a family or professional couple.

Although the Tremough Campus side of Penryn it is a quiet area traditionally favoured by non-students.

The rental on this property would be £750 PCM. The return on investment based on an asking price purchase should be 5%. 

The Zoopla House Price God suggests that prices have risen by just over 4% in the last year.

As a tidy, modern three bedroom house it is worth at least a look. In the current rental market you should have decent family tenants queuing up for this all day long!

Why Become a Landlord?

Most of us aspire to better ourselves in one way or another. It is a human trait that has existed since man took his first breath. For our caveman ancestors it might have meant a bigger cave, a safer spot, a more elevated position, or perhaps even a sea view! Fundamentally it was about well-being and survival. Today home ownership is not a survival issue; it is however about financial security as we endeavour to put a ‘roof over our families head.'

 

 

 

It is one thing being a home owner, but what about a multiple home owner and investment landlord?

 

There are currently more than 2 million private sector landlords owning approximately one in five UK homes! Government statistics indicate that this will increase to one in three homes in some parts of the country. The trend towards renting locally is slightly higher than the national average. It is inevitably skewed by 'poor' wages leading to lack of affordability. Supply is also constricted by second home ownership and limited new house builds. This hints at the entrenchment of the trend towards renting.

If its financial security that you are looking for then history would teach us that there is no better investment than property. After all an investment in bricks and mortar should be, ‘safe as houses’?

 

In 1966 my parents bought their house in Redannick in Truro for the princely sum of £3000. In 1990 it sold for £88,000.  Checking the 'Zoopla House Price God', that same semi would conservatively be worth more than £250,000 now. Even allowing for inflation this represents a significant net gain.

 

Few  of us will  take any joy in the fact that a great number of hard working people cannot afford to buy their own home, let alone invest in a second or third. As individuals there is little we can do to influence this. Inheritance, luck, choice and the lottery of life determines these things.

 

The opportunity of being a landlord does not make for bad people or money grabbing capitalists. It gives ordinary people a calculated chance for financial stability and to control their own investment destiny. Further, by buying property locally, and becoming a landlord you have a chance to ensure its quality and fair rent for the current generation of tenants - your children, grandchildren, friends, neighbours and acquaintances; you also enable them to put a roof over their heads. What is more, your investment down the track, may even enable your children to raise a down payment on a mortgage and continue the cycle of home ownership that is currently beyond the reach of many.

 

The choices to make and the rewards to gain are significant ones.  Do I downsize and release equity to purchase? What do I do with the pension money I have earned from a lifetime of working? What do I do with inheritance money? Do I forgo the foreign family holiday for the next 5 or 10 years? Do I put the kids through private school? OR - Do I buy a rental property?

 

 

These decisions are ‘tug of war decisions’. There are upsides and downsides to each. There is no right or wrong answer; what is important, is what is right for the individual. History is never a certain indication of a trend continuing. However house prices in the region are reckoned to go up at least 20% in the next three years (Savills Quarterly Report). The rental sector is growing too.

 

The difficult choice may be made easier if you consider one certainty. No one is going to look after your interests, your health, and your wealth in old age better than you.

 

Take the plunge and become a landlord.  The water is lovely and warm.


Next Time we look at what makes a good landlord

Investment Spot of the Day

New Windsor Terrace, Falmouth

For Sale through Kimberley's at £185,000

Click the link: http://www.rightmove.co.uk/property-for-sale/property-32801022.html#


This three bedroom end of terrace is situated just off Killigrew Street and a few hundred metres from The Moor side of town.

It is an area popular for student letting but is equally appealing for families that want to be close to town, King Charles and Marlborough Rd Primary Schools.

As a 3 bed student let you are likely to get a return of at least £11,000 PA. This equates to a gross return of close to 6% on investment assuming you pay the full asking price.

A conventional family let should secure £775PCM/£9300 PA. This equates to a gross return of just over 5% on investment.

In the last year the Zoopla House Price god suggests that prices in the immediate postcode have risen by 4.5% (in the region of £7700). The property has a registered EPC rating of
E 41.

Is your Tenant Mad, Sad or Bad?

This is Part Two of a series of three Blogs where we look at dealing with Tenants and Tenancies that have perhaps turned sour. In Part 1 we looked at avoiding problems. In this Blog we look at practical solutions when problems present themselves.

You have picked a lovely tenant and all is going well, then suddenly there is a problem. What then? In these circumstances tenants usually fall into three categories. They are either mad, sad or bad. How they are depends on the solution.

 

The Mad Tenant

 

 

This is the tenant that is unhappy or even angry. They see a fault, and they perceive the problem lays either in the property and critically a failure by you Mr/Mrs Landlord to address it.

 

You can stand on your high horse, huff and puff and do nothing or you can be pro-active. Sort the problem out! Spell out what you are going to do and when you are going to do it. Most people (tenants included) are reasonable decent people. Don't let a small thing fester for a few quid. It will always develop. A small gesture – bottle of wine, pizza vouchers can go a long way to getting things back on an even keel.

 

We all have our own moral codes that determine whether we believe we being reasonable or not. You might think that you are being reasonable but you may not be. Share your dilemma with the most reasonable person you know. Talk to an agent about your issues, try and be objective with the facts. Most good agents will give some time up to talk you through how they might resolve something.

The Sad Tenant

 

 

Tenants and tenancies do not usually start off with things going wrong. The most common trigger for this is some sort of personal or family trauma. Losing a job, a failed marriage, an illness or bereavement are all part of life. Your tenant will be affected by it and either the care of a property or failure to pay the rent maybe symptom of the trauma.

Get to know your tenant. Check on them with a quick phone call once a month. Formally inspect the property within the first six weeks and every three to four months after this. I'm not suggesting be best buddies but be communicative, show them a human side, show them that you care and you may find that this is reciprocated in a time of stress and trauma. If they can’t pay and you value the tenant, then agree a payment plan. If the tenant is not looking after the property because they are spending hours at the hospital? Knock £50 off a month and use this for the occasional cleaner or gardener. I'm not suggesting for one minute you lose all senses and forget you are in it to make money.  Make a benevolent gesture sure, but make a decision because it is prudent to do so. Don't lose sight that your tenant is part of your investment because he/ she is in your property.

Bad tenant: Is your Tenant one of these? …….

A tenant that is a ‘rotten apple’ is the most difficult kind. You have tried to resolve a problem. You have worked with the tenant, perhaps shown empathy in the face of their personal adversity and they throw it back in your face. What do you do then?

 Don't lose your head but prepare for the worst as soon as possible. Even the most experienced landlord or agent will have experienced a bad tenant. You need to be on the front foot rather than let the problem take control.

 This approach depends on circumstance. There isn't a one size fits all solution. There is the practical and there is the legal. Be honest with yourself. If you don't feel confident here call in the professionals. A day or a week spent without direction is a day or week where you are no further to ‘lancing the boil’.

 

The PRACTICAL solution

1. If the tenants are in financial difficulty offer to release them from the contract early. Negotiate with them regarding their deposit and cut your losses. What's the point of trying to pursue people with no assets anyway?

2. You won't see this in the books and it can backfire but you could pay them off to leave your property. You could verbally offer them something and see their reaction. You could make them a without prejudice offer.  Make sure that you get them to put it in writing that they intend to give up the tenancy.

3. Offer to go to a mediator. Shelter or Citizens Advice may help here.

 

Alternatively  please contact us at  Rainbow Property

 

Next Week: Paul Beevers Director of Rainbow Property and Landlord and Tenant Solicitor will go through some legal options if your tenancy has gone badly wrong.



Investment Spot of the Day

Conway Road, Falmouth


For Sale through Miller Countrywide at £175,000

Click here to go direct to the agent:

http://www.rightmove.co.uk/property-for-sale/property-34070829.html

 

What could be a more straightforward investment than a 2 bedroom modern mid-terrace property?

It appears to be in good order with modern bathroom and kitchen, double glazing, gas fired central heating, bedrooms with built-in wardrobes and enclosed garden.

It is close to Falmouth Secondary School and St Francis and St Mary’s Primary Schools.

This should be a ‘bread and butter’ investment that is ready to go.

It should return £725 PCM giving a gross return of just shy of 5%.

 

The Zoopla House Price God indicates prices have risen 4.52% in the last 12 months.

You will have tenants queuing up for this one all day long……..

 

 

 

Landlords how to avoid problem tenants and save yourself time, money and grief.....

A Landlords biggest challenge comes when something goes badly wrong in a tenancy. The twin fears of a tenant not paying or not looking after a property can lead to a nightmare scenario of lost income, damage and stress. What does a landlord do then?

 

This blog is split into three parts because there is quite a bit to it. A damn fine read it won't be. It might just save you time, money and grief though!

 

Part One will look at how to avoid problem tenants in the first place.

 

Part Two will look at practical solutions to tenancy problems by asking "Is your tenant Mad, Bad or Sad?"

 

Part Three will look at legal solutions to tenancy problems

 

PART 1: Prevention of Problems is better than a cure. After all….

 

 

 

Talk about the blinking obvious, but the best way to deal with a problem is not to let them happen in the first place! This can be easier to achieve than it sounds, but only if you look out for the warning signs. This begins before the prospective tenant views the property the very first time you speak with the tenant. It continues right up to the point when they sign the contract.

 

As a landlord particularly those without the support of an agent, you have to a certain type of person. You have to be fair, open minded and compassionate. But you also need to have it within you to be objective, firm and sometimes selfish – yes selfish!

 

As long as you act within the law you decide the sort of person or family you are looking for, don’t be bullied or cajoled into doing something that makes you feel uncomfortable. The point at which you do this you are on a slippery path. Always remain in control.

 

How to remain in control

 

1.      Ask searching questions of your prospective tenant even before you allow them to view the property. A topic in itself for another day but think of it like going on a date. Be cautious from the outset. Who are they? What do they do for a living? Where are they renting currently? How long have they been in their current property? Why are they moving? What are their gardening skills like? What would their current landlord say about them? Are the kids under control? How tidy is their car? How well do they present?

 

If they are scruffy buggers or their car is like a tip, it might just be a warning sign!

 

2.      Vet your tenant thoroughly using an independent referencing agent. The cost of this is no more than £20 per tenant. It could be the best £20 you spend. After all you spent thousands on buying the property in the first place.

3.      Be wary of taking on tenants with bad debt and credit history. Tenants with a poor credit rating are not necessarily bad people. However play the percentage game and avoid unnecessary risk. If you do take them. Ask for a bigger deposit, 3 months rent up front or a Guarantor.

 

 

4.      Don't promise to do something straight away. Impulse decisions often lead to poor decision making. Give yourself some breathing space to decide whether you want to accept that dog, provide a washing machine, take a person on DSS and so on.

5.      Take personal references too. In small towns like Falmouth, Truro, Helston, Redruth and surrounds you may know friends of friends. Who your tenant chooses as their referee may tell you a lot.

6.      Use the power of social media as a tool to find out a little about your prospective tenant. Anyone can tell you what you want to hear – Facebook, Twitter and LinkedIn are incredibly useful resources. Often problems come from the tenants friends and hangers on rather than the tenant themselves. Does your tenant get ‘trollied’ three times a week? Have they just come out of a violent relationship? Are they happy in their current job? Answers to these are often obvious in the murky folds of a Facebook account or hidden behind a Twitter rant.

7.      Get a tenant to write and tell you why they want the property. Get them to send you pictures of how they live. The good ones that want your property will do this.

8.      If you are not sure about a prospective tenant then don't give them a contract. If you do give them a contract because you are ‘up against it’ make it 6 months.

 

 From a landlord’s perspective, if the letting process becomes unnecessarily complicated then don't be frightened to pull out. If your prospective tenants fail to pay you a deposit on time, are less than forthcoming with references, change the goalposts on the starting date, announce that granny is moving or they have a pet etc. these are warning signs of a tenancy that is unlikely to be plain sailing! My advice is to withdraw your offer and go back to the drawing board by looking for a new tenant. It is far better to do this now, rather than have the nagging doubt once they are in.

 

There are lots of decent, fantastic,lovely, caring respectful tenants out there. It's the charlatans the ‘wrong-uns’ you have to look out for. They don't go around with labels attached – it is your job (and my job) to scratch below the surface.  What do you feel intuitively about them? Is that little voice telling you to beware? Take a friend along when you meet the prospective tenant. If there is a couple split them up and ask the same questions – they won't expect it but establish whether they are being consistent. Beware of fairy tales and sob stories. Think Little Red  Riding Hood, The Boy who Cried Wolf and Hansel & Grettle. They are Grimm Fairy tales in more ways than one...

 

 

Above all else Remember Prevention is better than Cure.

 

As one wise doctor once said….

 

“What fits your busy schedule better? Exercising one hour a day or being dead

24 hours a day?’

 

Exercise your right to be in Control!

 

 

Next Week: Is your Tenant Mad, Sad or Bad?

 

 

Investment Spot of the Day

 

Grove Place (Picture of Front block - apartment to the rear)

For Sale through Lewis Haughton and Wills at £125,000

Click Link: http://www.rightmove.co.uk/property-for-sale/property-48991160.html

Dip your toe into the world of the investor landlord with a starter investment

Back in 2005 I was involved in selling these apartments and they sold like the proverbial hot cake.

Indeed a few years later I bid and bought one of the water-fronted ones on behalf of my father-in-law at auction. He made a tidy profit selling it on and at the same time enjoying the same very good tenant for 3 years!

The apartment in question is actually situated to the rear of a wonderful Georgian House opposite Events Square. Although it doesn’t have water views itself, you are so close you can smell the sea! The property comprises a lounge/dining area, compact kitchen, bedroom and shower suite.

They make good solid investments because they are in the heart of town. Based on a monthly rent of £550, this should achieve a gross return of £6600 per annum.  This equates to a 5.28% gross return on investment

In the last year the Zoopla House Price God suggests that prices in the immediate postcode have risen by approximately 5%. The property has a registered EPC ‘E’ rating. Those of you that read the earlier blog article Who cares about EPC’s will know that it will be valid for letting under the impending EPC changes after 2018.

 

Legionella Assessment - yet another Bug Bear for Landlords?

 

 

Landlords have to contend with more legislation than ever these days. The trend towards governance and regulation holds no sign of abating. Are these just hoops to jump through, or are they requirements imposed for a reason?

The need for electrical and gas safety, energy performance certificates and Tenants Deposit Protection are all fairly well embedded in the practice of many private landlords. They are well understood since they directly relate to improving either safety or energy efficiency and in the case of the Tenants Deposit, fair play for both landlord and tenant.

Any initiative that helps look after a tenant and their wellbeing and at the same time eradicates the shoddy landlord, the Mr Rigby's of the world are surely a good thing? After all it is the Mr Rigby's that give the rest of us a bad name!

The latest Duty of Care relates to the control of Legionella in water systems would you believe. It is not a new directive as such but one that appeared more relevant for block managers than private landlords. The requirement now is that all Private landlords and agents should be pro-active in preventing the occurrence and spread of the legionella bacteria!

The recommendations from the Health and Safety Executive (HSE) can be found at the link below:

www.hse.gov.uk/legionnaires/

 Very briefly it recommends you:

1.       Carry out a risk assessment of the likely existence of legionella

2.       Manage and control the risk of legionella

3.       Keep records of what you have done in relation to 1 and 2 above.

 

If you have undertaken 1, 2 and 3 above and problem presents itself the intimation is that by virtue of following good practice and being diligent you are going someway to protecting yourself from liability.

Is this another 'bird flu' epidemic hyped out of all proportion I hear you groan? Is this an EU inspired directive which has no sense of balancing the real risk? This view may be valid. Like many directives, duties and legal imperatives they may appear senseless, unless of course you are the unlucky one to be affected by it.

A cousin of mine from Falmouth nearly died as a result of a viral infection following eating seafood a few years back. The moral is tragedy is capable of happening when you least expect it and from the unforeseen. Therefore should we mock what appears to be madness? After all pretty much every year without fail we will hear of, read, experience or bear witness to a hotel, a passenger cruiser, holiday camp which has had serious illness or even death associated with Legionella. So off you jolly well  go and check your showerheads, toilet cisterns, outside toilets, old water tanks and extractor ducting.

 

In all seriousness we intend to review this revised HSE duty of care expected of landlords. It is such a recent revision that our professional bodies are trying to absorb the fallout. It is probably not as onerous in practice that the directive suggests. If you would like to know more as our own thoughts evolve then please contact Paul or I.

 

Please don't worry at this stage since we must get a sense of these things before we change the world. Putting this into perspective one of my more ‘colourful’ landlords, suggested that "Seagulls and pigeons" (described as flying sh** machines) posed a greater risk to his tenants health particularly on bin day around Marlborough Road. I understand his sentiment and suggest that he enlist the help of students in the area looking for a worthwhile PhD subject to study.

Take care Mr Landlord. I’m off to Trescobeas Surgery to get my anti-bacterial jabs and then check out my water tank .  In the meantime beware of Seagulls and Legionella (probably in that order).

 

Investment 'Spot of the Day'

Smart Two Bedroom Maisonette in the Heart of Falmouth

 



The better a property looks the quicker it rents. Consequently when an agent describes the presentation of a property as ‘faultless’ our investment radar begins to gently flicker. 

With two good size bedrooms, central location, modern heating system and very clearly an impeccable presentation by the owner this is worth putting it on your property shortlist to check it out.

For Sale through Laskowski at £139,950.

Click Link below for more details:

http://www.rightmove.co.uk/property-for-sale/property-50390234.html

 

Based on a monthly rental of £675 PCM this should achieve a gross rental of £8100 per annum. This equates to a 5.78% gross return on investment.

In the last years the Zoopla House Price God suggests prices in the immediate postcode have risen by approximately 5.47%. The property has a registered EPC rating of D68. Those of you that read the earlier blog article Who cares about EPC’s will know that it will be valid for letting under the impending EPC changes after 2018.

 

Investment Spot of the Day

This is the first of our investment 'spots'. The purpose of this is to give Landlords and investors an indication of properties that we feel are worthy of further inspection since they are likely to make solid rental investments. The rental figures given are indicative, and are based on extensive experience of valuing thousands of properties over more than a decade locally as well as managing several properties broadly comparable to it.

 

Parkside Beauty, opposite Kimberley Park in Falmouth

For Sale through Miller Countrywide at £168,000

 

Got to link: http://www.rightmove.co.uk/property-for-sale/property-33496831.html

A hop skip and a jump from our offices and right opposite the park, if you bought this you could be one of our near neighbours!

This property has a pretty and distinctive façade. With gas fired central heating system modern bathroom and kitchen, 3 bedrooms and view over the garden towards the park as an investment property it has much to praise it.

I am pretty sure I saw this property many years ago before the improvements were made. Indeed I recall recommending the kitchen fitter who disappeared from finishing my kitchen to start on this. A story for another day perhaps!

We would need to view the property to nail down an exact rental figure but given the dimensions, park location and bedrooms we feel you should achieve in excess of £725 PCM

Assuming a conservative rental return of circa £725 PCM, this should achieve a gross return of £8700 Per annum. This equates to a gross return of 5.1% on investment.

Most observers would regard Kimberley Park Road as a good street to live. With average prices around this immediate area comfortably in excess of £300,000 this certainly bears this out. They say it is always a good idea to invest in one of the cheaper properties on the street since you tag along the coat tails of the more expensive ones. Certainly worth a look?

Why should Landlord care about Energy Performance Certificates? 

What is an Energy Performance Certificate (EPC)?

In basic terms an EPC contains information about a property’s energy use and typical annual energy costs.

Included within the Energy Report that accompanies it, are recommendations about how to reduce energy and save money. Displayed in a colour-coded graph an EPC gives a property an energy efficiency rating from A (most efficient) to G (least efficient).

Critically EPC are required by Landlords and Estate and Letting Agents before they market a property. They are compiled by a qualified Energy Assessor and typically cost around £50 to £75 to commission.

A relic of the much maligned Home Information Sellers Pack, you mention the need for an Energy Performance Certificate to your average landlord and he will most likely groan loudly and will bemoan yet another government ‘gimmick’. I heard one recently call it a ‘stealth tax’ on landlords. Stealth tax, gimmick or not it is here to stay.

Why fuss about EPC’s?

The carrot of a positive EPC rating

 

In housing terms energy costs are no longer a small add-on to the cost of renting or mortgage.  As a consequence for most ordinary people on limited budgets energy costs are a significant factor when choosing a home. Given a choice and all other attributes of a house being broadly the same, it is a fact that tenants will choose a property with a good energy rating over a poor one every day of the week.

The carrot for a landlord is the more energy efficient a house is, the greater the demand there will be for it. The fewer void periods they will have and the less money they will have to spend on recruiting new tenants.

 

The stick of a negative EPC rating.

Anything that ‘hits the wallet’ of a landlord is likely to focus his attention. An energy inefficient home could mean grumpy tenants who fall out of love with it. A harsh winter followed by a hefty fuel bill are incentive enough for them to seek alternative accommodation. Landlords faced with an empty flat will see a poorer return on their investment.

Currently there is a healthy demand for property locally and a relative housing shortage. Hence the balance of power in the housing market locally is still stacked in the landlords favour. 

From April 2018 the government however is intending to legislate against properties with the poorest rating.  The indications are that those with an F & G rating (currently 18% of housing stock) will not be allowed to let out their homes from April 2018. While there could be exemptions including for those that have made all reasonable steps to improve the energy efficiency, the long-term view is that the legislation will become tougher. With a further 20% of the housing stock nationally reckoned to be an ‘E’ rating this will encompass many Victorian, Edwardian and pre-war properties. This is a significant slice of the housing market locally, which we should care about. 

The carrot and the stick for Landlord is clear. A property’s energy performance can affect their bottom line investment and earning potential. Fundamentally it could affect their decision making on what investment property to buy or indeed which property in their portfolio to sell or improve.

With legislation on the horizon  and one in five of the population renting locally and this set to rise perhaps it is time to take notice and care about EPC’s?