As the 31st of October draws near and frankly we seem no closer to knowing what the outcome of the last three years negotiations might be , this is a good time to appraise what if any impact the uncertainly has had on Scotlands PRS. The data seems to suggest that the answer is none whatsoever which is not entirely surprising. Tenants still need flats and landlords still need tenants it was ever thus. Things might change if the UK were to go into recession but theres no sign of that happening and in fact the indicators all point to a growing private rented sector in Scotland with rents at record level highs. Edinburgh seems to have its own life support system pumping oxygen into the market with big student numbers swelling demand for HMO properties and average rents ( non HMO ) peaking at around £1200 a month. Would be landlords take note ! It is fair to say that there are fewer new landlords entering the market just now which is probably Brexit related but once the dust settles that position will probably go into reverse. Where else are you going to get yeilds of 5 and 6 percent on your investment and a decent underlying rate of growth in the value of your purchase. Looking at time to let , its all very subjective. The better presented the property , the quicker it lets. Some go in a day others take a month. A bit of pre letting preparation can have a big effect and clean , fresh flats create the right impression. If any landlords out there want an appraisal as regards what could be done to improve their properties on a budget please get in touch. Anyone watching the news recently will have seen a number of reports on the acute shortage of affordable housing throughout the UK but Scotland is doing pretty well on that subject with some exceptional new projects coming to completion under the Build to Rent scheme. Credit is due to the National Housing Trust and the Scottish Futures Trust supported by the Scottish Government.
All letting agents in Scotland must now be signed up to a new register in order to trade legally.
The Letting Agent Code of Practice was introduced on January 31, but all agencies had until yesterday to register.
It is now a criminal offence for agents in Scotland to carry out letting agency work if they have not applied or are not registered on the Register of Letting Agents. Those breaking the rules could face a fine of up to £50,000 and up to six months imprisonment.
If you have not applied for registration and have no intention of doing so perhaps you are looking for an Agent to buy your portfolio . If so we would be delighted to hear from you.
Its a common enough scenario , two persons sharing and one decides to leave. Under the terms of the PRT it would seem that under these circumstances not only must the departing tenant give notice but in fact all parties must do so to effectively end the PRT. This may be an unforeseen consequence of the legislation but until its resolved it has pretty far reaching implications for the tenant who leaves because his / her liability for the payment of rent and so on continues regardless. There are several solutions available which involve agreement between the landlord and their tenants the most obvious of which is the assignation of the tenants interest to someone else , that person being their replacement but its complicated and gets even more so when organising return of deposits and signing up to the original terms of the PRT. We shall watch how this develops and post again if further changes are implemented to keep our landlords fully aware of any changes.
The Scottish Government proposes that by 2019 the minimum rating allowable for Energy Performance Certificates be Band E and by 2022 this is set to further shrink back to Band D . Landlords whose properties do not meet the criteria will have a period during which the required upgrades may be completed or risk being fined. Basically this is all part of the larger drive to ensure that properties are meeting a modern , energy efficient standard and that the sector offers tenants the opportunity to live in warm , well insulated housing thus going a long way to eradicating high energy bills and fuel poverty which has dogged the sector for many years.
Dont get caught out. If you are a private landlord this has implications for you . If you wish to have an informal discussion with our team here about this subject please give us a call. More information will be added to our Blog on this shortly.
The end of January 2018 heralded the implementation of the new statutory code of practise for letting agents. In simple terms that means that all Letting Agents in Scotland have to comply with this Code and should also now apply to join the Scottish Letting Agents Register.
For landlords and tenants this effectively lays down a minimum standard of service that they can expect to receive from their Agent and gives them a way of challenging poor practise should this occur. This is only one part of a larger raft of regulatory changes affecting the sector , which have been covered at length in earlier posts. The important thing here is that Letting Agents have clear guidelines regarding their conduct and that staff meet the required standards having completed relevant training leading to SCQF level 6 or its equivalent.
All Agents must have gained access to the Register by October 1st 2018 or they will not be able to continue to offer these services.
Rentlocally is keeping well ahead of all the relevant dates and has in place a robust strategy to ensure that we are fully ready to meet the challenges of this new and more regulated future.
Many tenants report dampness to landlords or managing agents which turns
out to be condensation. This happens when warm air comes into contact with
a cold surface and moisture in the air turns into droplets of water.
If your tenants property has condensation, you may find a blackish mould
growing on the inside face of external walls, in the corners of rooms, on
window frames and behind wardrobes and other furniture. The mould is a
result of the condensation not being cleaned & dried in time.
Condensation is one of the main reasons why a full deposit is not returned to
a tenant at the end of the tenancy period. This is because it is normally the
responsibility of the tenant to take all reasonable steps to adequately
ventilate as well as heat the house.
If any condensation develops, the tenant is normally expected to wipe down
and clean the affected surfaces from time to time to prevent the growth of
mould and any other associated damage that can be caused to the window
frames, floor, walls and ceilings.
Tenants can reduce the risk of condensation by doing the following:
1. Open a window when you are cooking and keep lids on saucepans.
2. Leave the bathroom window open after a bath or shower to clear steam.
3. Keep the bathroom door shut when you are having a bath or shower.
4. Do not block air vents of airbricks.
5. Open windows in all your rooms for a few minutes each day to let some
fresh air circulate.
6. Leave some background heating on all day in cold weather.
7. Do not cover radiators or storage heaters with damp clothing.
New investment in the buy-to-let market has fallen by £20bn in two years as the lethal combination of tighter tax and mortgage rules has begun to take its toll on landlords.
Figures released yesterday by IMLA, the mortgage broker trade body, show that the value of new money raised to invest in buy-to-let properties has fallen by 80pc, from £25bn in 2015 to just £5bn in 2017.
In that period, a series of reforms have had a punitive effect on landlords. The stamp duty surcharge on additional properties was introduced in 2016, making expanding a portfolio more expensive, and the phased removal of mortgage interest relief which began last year has also squeezed profits.
Meanwhile some landlords now face an uphill battle getting mortgages at all, thanks to changes to lending restrictions ushered in by the Prudential Regulation Authority, a part of the Bank of England, at the tail end of last year.
There are currently 4.5 million people living in the private-rented sector and, IMLA warned that if demand continues to increase at current rates the crackdown on landlords may force average rents upwards.
Now introduced in Scotland , there are stringent new directives that must be adhered to for any business that would fairly be described as a letting Agent or some derivative thereof. These set out standards of practise which should ensure that all Agents are fully equipped to provide a professional service and that as an industry a benchmark level is implemented across the board.
The areas covered are : Approved system for the handling of client money , both tenants and landlords alike. All Agents having professional Indemnity Insurance . Agents being listed on a register of approved businesses. This approval being dependent on certain basic training standards being met.
Ministers will have the power to obtain the necessary proof that compliance has been observed and powers to address any breaches of the code.
Agents must have written processes to cover the need for identity checks , proof of ownership , reference checks , proper tenancy agreements , management of the properties , key handling and staff training.
Agents must have detailed records of all qualifications held by the principal , Partner or Director who would have hands on responsibility for overseeing the actual letting process or active involvement in same. Such persons must have a plan for continuing professional development and staff training .
All Agents must be in a position to offer a separate client account and must have client money protection insurance.
On December 1st 2017 the present assured and short assured tenancy will be replaced with a new tenancy regime hereafter referred to as a PRT. Our objective is to outline to you what this means for you as a landlord and should any points require additional clarification we would aim to be able to provide further specifics on request
Let us look at the main points in turn :
The Scottish Government has produced a model lease which contains two types of clauses.These are either Mandatory and must form part of the PRT or Discretionary and can either form part of the agreement or not . Please note , it is not compulsory to use the model tenancy agreement but all PRT leases must contain certain statutory terms.