Jump to content
House Price Crash Forum
LuckyOne

The Great House Price Stand-Off

Recommended Posts

The first part is quite bearish but, unfortunately, it turns into a bit of an advert for a few lettings agents and ARLA.

http://blogs.telegraph.co.uk/finance/ianmcowie/100010828/the-great-house-price-stand-off-accidental-landlords-beware/

A growing army of ‘accidental landlords’ is being created by the stand-off between potential homebuyers unwilling to overpay and would-be vendors reluctant to cut asking prices.

According to Land Registry figures, the number of homes sold last month has collapsed to little more than a third of the level seen a decade ago. That means many inheritors of property and those who would like to trade down on retirement are letting rather than selling. Some are willing and able to become DIY landlords but others prefer to use a letting agent.

This can cost about 15pc of gross rental income, although good hagglers may obtain discounts. But there are pitfalls for unwary buy-to-let (BTL) landords and your choice should not be based on cost alone, warned Ed Mead, a director of estate and letting agents Douglas & Gordon (D&G).

He should know, not least because D&G specialised in lettings decades before the BTL boom and Mr Mead also sits on the board of the Property Ombudsman, which offers free arbitration of disputes. That could prove important, as BTL landlords do not enjoy the same legal protection as other buyers and sellers of property.

Mr Mead explained: “Although all sales estate agents need to be registered by law, it is not a requirement for lettings agents to be registered. Paradoxically, sales agents do not handle money but lettings agents often do and many of the rising numbers of cases that the Ombudsman sees are to do with monies held.

“Given that lettings are going to become a bigger part of our property landscape, it beggars belief that this Government can’t be bothered to force lettings agents to be registered.”

Many problems arise because landlords fail to ensure tenants’ references are investigated thoroughly. Another common mistake is to allow agents to charge fees annually in advance, as opposed to quarterly. That can leave landlords out of pocket if tenants leave after six months.

The simplest way to reduce the risk of insoluble disputes is to choose a member of the Association of Residential Letting Agents (ARLA), whose members must comply with Ombudsman rulings.

Resist the temptation to cut corners when it comes to the paperwork, as that can cause trouble later. Tony Lam, lettings agent at London’s West End specialist estate agency, LDG, emphasised: “Landlords must ensure all documentation is in place and up-to-date.

“They need documents from their mortgage company to prove they have consent to rent the property, an Energy Performance Certificate (EPC) and other certificates, such as electrical and gas safety certificates to ensure the property is safe and hazard free.

“A common misconception among inexperienced landlords is that if a tenant causes any damage, their deposit can be withheld. But, by definition, a tenant’s deposit does not belong to the landlord. Under the government’s Tenancy Deposit Scheme (TDS), landlords are prevented from holding it or claiming from it without the tenant’s permission.”

This raises the important point that landlords should be clear at outset what they expect letting agents to do for their fees. Nicholas Ayre, lettings expert at Home Fusion, said: “First up, decide whether the agent is simply finding your tenants or dealing with everything from drawing up a tenancy agreement to managing the property, collecting the deposit and rent, and dealing with problems on your behalf.”

For example, if the boiler breaks down, do you have time to find an engineer to fit a replacement? To a large extent, landlords will get what they pay for when appointing letting agents – but choosing an ARLA member at least reduces the risk of being unable to resolve disputes if they arise.

Share this post


Link to post
Share on other sites

The first part is quite bearish but, unfortunately, it turns into a bit of an advert for a few lettings agents and ARLA.

http://blogs.telegraph.co.uk/finance/ianmcowie/100010828/the-great-house-price-stand-off-accidental-landlords-beware/

It says inheritors of property are letting.

Can't help wondering how many. A good many probate properties are what EAs call 'in need of updating' - often very much so, even if clean and cared for. This means they won't let easily (to good tenants) and even if they do, the rent will be markedly lower than local average for similiar.

From several cases I know of, all this can result in properties lying empty (often without furnishings) for ages while relatives dither or argue over whether to sell (and at what price) or to rent.

Property then deteriorates through being left empty, esp. through a winter, starts to smell musty etc. and is thus even less likely to attract buyers or tenants.

Plus still costing money all the while, heating, garden, insurance, etc.

Share this post


Link to post
Share on other sites

From several cases I know of, all this can result in properties lying empty (often without furnishings) for ages while relatives dither or argue over whether to sell (and at what price) or to rent.

Property then deteriorates through being left empty, esp. through a winter, starts to smell musty etc. and is thus even less likely to attract buyers or tenants.

Plus still costing money all the while, heating, garden, insurance, etc.

This is happening in my family just now.

My grandmother was in a care home for a couple of years and the house sat empty (I am not sure why) now two years after she died the house is still sat empty (it has nothing to do with me as my dad was almost written out of the will and the house left to my aunt) it is unfit for letting and is on the market at what I think is a daft price - especially given the money it would need to bring it up to modern standards.

Share this post


Link to post
Share on other sites
potential homebuyers unwilling to overpay

I like this phrase. It seems more the accepted fact that houses are overpriced these days. Must be seeping into the national psyche

Share this post


Link to post
Share on other sites

It says inheritors of property are letting.

Can't help wondering how many. A good many probate properties are what EAs call 'in need of updating' - often very much so, even if clean and cared for. This means they won't let easily (to good tenants) and even if they do, the rent will be markedly lower than local average for similiar.

From several cases I know of, all this can result in properties lying empty (often without furnishings) for ages while relatives dither or argue over whether to sell (and at what price) or to rent.

Property then deteriorates through being left empty, esp. through a winter, starts to smell musty etc. and is thus even less likely to attract buyers or tenants.

Plus still costing money all the while, heating, garden, insurance, etc.

I was thinking that myself, in fact I can see it happening.....whereas before it might have been worth sitting on empty property that requires money spent on it, now it is becoming a bit of a liability so better to off load it before it costs even more to maintain and service......more of this type of property in now coming onto the market, has to be good for house prices and for people that need and want an affordable home to live in and do up to in their own taste their own time and ability. ;)

Share this post


Link to post
Share on other sites

Unashamed lettings agent advertorial.

I expect better from you luckyone

I agree that the article is far from perfect.

I thought that there were enough positives (buyers aren't willing to overpay, the use of the phrase "would be vendors", sales volumes have collapsed, letting agents aren't registered even though they handle money, tenant deposits don't belong to landlords, there can be high maintenance costs etc) that it warranted highlighting despite the weaknesses (the advertorial nature of much of it).

I could have been wrong.

Share this post


Link to post
Share on other sites

I was thinking that myself, in fact I can see it happening.....whereas before it might have been worth sitting on empty property that requires money spent on it, now it is becoming a bit of a liability so better to off load it before it costs even more to maintain and service......more of this type of property in now coming onto the market, has to be good for house prices and for people that need and want an affordable home to live in and do up to in their own taste their own time and ability. ;)

yep it's all good, my amateur landlady has just put our rented family home up for sale, wohoo!

Oh, hang on a minute :(

I'm now looking around for a house that is least likely to be put up for sale any time soon. Naturally with my view of the market being on the brink of armageddon there aren't any that look safe for more than the minimum AST. This time next year who won't want out? Need some lord of the manor renting some cottages that have been in the family for hundreds of years and who isn't about to loose his shirt on some junk shares he's been holding. Or similar.

Share this post


Link to post
Share on other sites

I agree that the article is far from perfect.

I thought that there were enough positives (buyers aren't willing to overpay, the use of the phrase "would be vendors", sales volumes have collapsed, letting agents aren't registered even though they handle money, tenant deposits don't belong to landlords, there can be high maintenance costs etc) that it warranted highlighting despite the weaknesses (the advertorial nature of much of it).

I could have been wrong.

All those reasons works for me and thanks for posting it up.

From your summary of pitfalls you missed out risks like this.

Many problems arise because landlords fail to ensure tenants' references are investigated thoroughly.

Some tenants find themselves in sudden change of circumstance, and there are professional cheaters too, in the UK land of high house prices and high rents. The way I see it a prolonged standoff with sellers refusing to cut their asking prices and renting instead, will see a rise in tenant rent payment difficulty cases.

Miss Naomi Koningen was forced to rent out her property after it failed to sell in 18 months on the market. "One of the two tenants hadn't passed the credit check, but desperate to cover the mortgage, I was naïve and took advice that this could just be down to poor credit rating and they could be trusted."

http://www.myintrodu...iew.asp?ID=7248

Share this post


Link to post
Share on other sites

This is happening in my family just now.

My grandmother was in a care home for a couple of years and the house sat empty (I am not sure why) now two years after she died the house is still sat empty (it has nothing to do with me as my dad was almost written out of the will and the house left to my aunt) it is unfit for letting and is on the market at what I think is a daft price - especially given the money it would need to bring it up to modern standards.

Friends of mine have a house in the same situation (and empty for longer than yours).

This is why we need proper incentives to bring empty homes into use (whether by selling or letting is immaterial). A land value tax imposing a real cost on accidental property hoarders.

Share this post


Link to post
Share on other sites

its not a standoff. its a housing revolution.

no one of that age group is interested.

not real people anyway. some fools and people rich enough not to give a shit.

most too busy making ends meet and cutting back.

GAME OVER

Share this post


Link to post
Share on other sites

yep it's all good, my amateur landlady has just put our rented family home up for sale, wohoo!

Oh, hang on a minute :(

I'm now looking around for a house that is least likely to be put up for sale any time soon. Naturally with my view of the market being on the brink of armageddon there aren't any that look safe for more than the minimum AST. This time next year who won't want out? Need some lord of the manor renting some cottages that have been in the family for hundreds of years and who isn't about to loose his shirt on some junk shares he's been holding. Or similar.

Find yourself a duke of westminster owned property. He owns huge amounts of land and housing (the majority of our street being a tiny part of his empire), he ain't short of a few quid and I can't see him selling up any time soon. Also (despite our house being one of only 3 on the street not owned by him) it is nice to have "the duke's men" turn up every few weeks to trim all the hedges and tidy the front gardens.

Share this post


Link to post
Share on other sites

This is happening in my family just now.

My grandmother was in a care home for a couple of years and the house sat empty (I am not sure why) now two years after she died the house is still sat empty (it has nothing to do with me as my dad was almost written out of the will and the house left to my aunt) it is unfit for letting and is on the market at what I think is a daft price - especially given the money it would need to bring it up to modern standards.

One case in this family, aunt went into care home, family house (v dated but cared for) went on market at daft price. Nothing to do with me, and not greed on part of her Attorneys - they lived 100s of miles away and thought the EA knew what he was talking about. :(

Plus they were very dutifully conscious of needing to get the best price for her, since she might be in a home for 10 years plus (v long-lived family) and costing God knows what.

However,upshot was that house was on market for around a year and after several price drops eventually sold to someone for £50K less than he'd offered for it 6 months previously.

Share this post


Link to post
Share on other sites

I'm now looking around for a house that is least likely to be put up for sale any time soon. Naturally with my view of the market being on the brink of armageddon there aren't any that look safe for more than the minimum AST. This time next year who won't want out? Need some lord of the manor renting some cottages that have been in the family for hundreds of years and who isn't about to loose his shirt on some junk shares he's been holding. Or similar.

Won't always help:

http://www.telegraph.co.uk/news/uknews/1457245/Homeless-fear-as-village-landlord-sells-up.html

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.