Friday, 19 February 2016

Nottingham Landlords could be fined £6,366,000 per year


“Who would want to move to Nottingham in weather like this?” a landlord said to me as we shook hands outside his property the other day. It was windy, cold and had been raining most of the day, it was a late appointment at 7.00 pm. I will admit, as I had been out of the office all day, I was looking forward to getting home at a reasonable time, putting the fire on and watching telly, but as this landlord works in Derby this was the earliest he could do. It turned out he had been self-managing the property over the last few years, but was worried that he was not able to keep up with all the new legislation that had been introduced recently. He was particularly concerned about the ‘Right to Rent’ legislation. As his tenant had handed in their notice recently, he called us for our opinion on the legislation and to ask us for our advice on marketing the property for a new tenant. 

For those Nottingham landlords who are not aware, landlords will need to check the immigration status of any new tenants moving into properties from February 2016 or face a £3,000 fine. It is called the ‘Right to Rent’ rules. However, tenants should also be aware that as well as traditional landlords, tenants who sublet rooms and homeowners who take in lodgers, must also check the right of prospective tenants to reside in the UK, this is in line with the more stringent rules brought in with the new immigration Act 2014.

This landlord wanted to know how much of a real issue ‘Right to Rent’ in Nottingham was. I was able to tell him, the last available figures (from a couple of years ago) show that 2,122 people (whom were registered as non-UK born short-term residents) moved into private rented accommodation in the Nottingham City Council area in one year alone. If all of those people weren’t supposed to be in the UK, that would be a fine of £6,366,000 to the landlords of the town.

It doesn’t sound a lot when you think there are 289,301 residents in Nottingham City and of those, 230,666 people (or 79.73%) were born in the UK. However, Nottingham is a cosmopolitan city and the country of birth of the residents in the area can be split down as follows:
                UK 79.73%
                Ireland 0.62%
                Europe 5.50%
                Africa 3.62%
                Middle East and Asia 3.62%
                Americas and Caribbean 2.03%
                Australia and Pacific region 0.17%

It has to be acknowledged that landlords can also run the risk of being accused of discrimination under the 2010 Equality Act if they are not careful. This is a real minefield for landlords, especially when you consider that not all of the 15,900 Europeans in the area necessarily have the right to live in the UK either.

In a nutshell, Nottingham landlords will need to check and retain copies of certain documents that show a potential tenant has the right to live in the UK. These options include....
                Passport/Identity card
                Visa
                Travel document or Permanent Residence Card showing indefinite leave to remain
                Biometric ‘residence permit’ issued by the Home Office
                Paperwork from Home Office stating their Immigration status
                Certificate of registration or naturalisation as a British citizen.

Let’s hope this will prevent dishonest landlords ailing to comply with the ‘Right to rent’ checks. As failing to comply will be a criminal offence and could mean facing imprisonment. That is why more and more landlords are asking agents to manage their properties, so they can stay the right side of the law.

So what did this landlord do? Well after our chat, he asked us to find a tenant and manage the property for him. Even better news for him, I was able to get him an additional £50 per month for his property and his new tenant moved in within a week. Now, he has peace of mind, that we will keep him on the right side of the law and put a stop to midnight phone calls complaining about dripping taps, it was a win-win situation for everyone.

Friday, 5 February 2016

Will the young people of Nottingham ever own their own home?


I had the most interesting chat with a mature couple (in their early/mid 50’s) from Mapperly the other day, whilst viewing one of our rental properties nearby. They were viewing with their son, who wanted his parent’s parental blessing. Now I know that isn’t the norm, but in this case the parents were going to act as guarantor. We got chatting about the Nottingham property market and how they had bought their first property in the town just after they got married in the late 1980’s when they were in their early/mid 20’s. Anyway, we got chatting about how the youngsters of the UK seem to rent more than buy nowadays and from that the conversation covered a number of similar topics. I want to share the highlights of that conversation with you this week.

Their son, like many 20 to 30 year olds in Nottingham, desperately wants to own his own property and the parents said he had read an article in the Telegraph recently comparing house prices to earnings for the 20-30 age group today have to spend more of their salary in mortgage payments than any previous generation. The demand for private rental sector accommodation in Nottingham is huge. There are in fact 28,492 private rental properties in Nottingham at the last count, a considerable amount when you take into account that there are 23,720 council houses in the city. However, let us not forget 53,300 properties are owner occupied (30,057 with a mortgage).

We must acknowledge that private renting does not have the stigma it had a few decades ago and it might just surprise people that even though us Brit’s class ourselves as a nation of homeowners, roll the clock back 100 years and over 75% of people rented their own home (and it was all from private landlords as council housing only started to come in with the ‘homes for hero’s’ after the first World War). It might also surprise you to learn that at the time of the 1971 census, still more people rented than owned their own home.

I have proved time and time again, when looking at the affordability issue, that it is in fact cheaper to buy a property than rent, when one looks at starter homes for first time buyers. 95% mortgages have been available to first time buyers for over four years, whilst better properties in better condition in better areas can be found, terraced houses can be bought for as little as around £40,000 in the Long Eaton area of Nottingham (meaning a modest deposit of £2,500 would be required).

When we discussed affordability, I was able to tell them that at the time they bought their first house in Nottingham in 1988, the ratio of house prices to salary was 5.08 to 1 in Nottingham ... and here was the surprise for both of us, today’s ratio is only 4.96 to 1!

I said I believed there had been a change in cultural attitude towards renting property in Britain and that this quiet revolution was likely to be permanent. In the 60’s, 70’s and 80’s, saving for the deposit and buying a house was the be-all and end-all. Youngsters today have far much more disposal income today than people had in the Callaghan and Thatcher years, but choose to spend it upgrading their mobile phones every 12 months, the newest tablet or PC, a newest 50” plasma LCD TV and two sun drenched holidays a year, than go without and save for a deposit.

Yes, there are horror stories of tenants living in rat infested properties with landlords who charge massive rents and don’t repair their properties. But that is very much the exception as most tenants rent homes of a quality they couldn’t ever to afford to buy. Twenty years ago, if you said you rented a property, you were considered the lowest of the low ... but now it’s the norm.

So with mortgage affordability being well within the bounds of most first time buyers, the level of deposit required for a 95% being surprisingly modest (starting off at £2,500 in Nottingham as mentioned above) until we change our attitudes, the UK housing market is slowly but surely turning into a more European model, where people rent for long periods of their life, then eventually inherit their parents properties and subsequently become homeowners themselves, albeit later in life.

Hence, I cannot see the demand for decent, high quality rental properties ever dropping in the next 10 to 20 years, but only ever increasing as the population continues to soar. Just make sure you by the right property, at the price, in the right location. For advice and tips please email on jaclyn.bartlett@centrickproperty.co.uk