Changes to section 21 notices from 1st October 2015

Morning folks,

Forever the changes to lettings legislation, so here is the latest and without doubt a significant shift that we will all need to be aware of.

Courtesy of The Deregulation Act.

The main changes are to the rules on serving a notice to quit under Section 21 of the Housing Act 1988, commonly known as a Section 21 Notice.

The changes come into force on October 1 and apply to tenancies entered into on or after that date.

The main changes to be aware of are:

• It will no longer be possible to serve a Section 21 Notice until the tenant has lived in the property for a minimum of four months. This is designed to stop landlords serving a Section 21 Notice as soon as a tenant moves in. As before, the notice can’t expire in any event before the end of any fixed term.
• A Section 21 Notice will only be valid for six months from the date it was given. This means that if the tenant doesn’t leave, possession proceedings must be commenced within six months of the service of the Section 21 Notice. Different rules apply where the notice period set out in the tenancy agreement is more than two months.
• A Section 21 Notice will no longer be invalid if the date of possession given on it is not the last day of a tenancy period. This has traditionally been one of the main reasons that a Section 21 Notice fails. As long as a full two months’ notice is given, then unless another unconnected error is made, the Section 21 Notice will be valid.
• Landlords will be unable to serve a Section 21 Notice in circumstances where it is in breach of its legal obligations to a tenant. This includes obligations as to the condition of the property, the health and safety of the occupants and failure to provide an Energy Performance Certificate or a valid gas certificate for the property.
• When a Section 21 Notice is served, all rent that has been paid for any period where the tenant ceases to lives in the property must be repaid to the tenant. This has implications where a tenant who has paid their rent decides to leave when they receive the Section 21 Notice rather than when the notice expires. Where a tenant pays a full month’s rent but then is required by the Section 21 Notice to vacate or voluntarily vacates mid-way through the month, the tenant is entitled to be reimbursed the overpayment of rent for that period.
• One change that is already in force relates to the protection of deposits. All deposits ever taken which are still being held must now be protected. Once complete the deposit protection certificate and all prescribed information must be served on the tenant. If any deposit has not been protected or returned to the tenant a Section 21 Notice cannot be served.”

Whatever next I here you say??! Agreed but with these changes imminent it is vitally important that we all take the correct decision when serving these notices otherwise you will find yourself on the wrong end of the ladder.

Call me if you need any advice or help understanding this.

Best regards

Richard
 

UK Budget Update

Hello all,

The first Conservative budget in 18 years has been delivered by the Chancellor George Osborne.

Figures from the Office for Budget Responsibility (OBR) provided a positive backdrop to the second Budget Statement in 4 months. Economic growth in 2014 was revised upwards from 2.6 percent to 3 percent and the OBR now predicts output to grow 2.4 percent in 2015 - the strongest growth among G7 economies.

However, the Chancellor warned that the UK is not immune to economic risk, with uncertainty over the Greek debt crisis and slowdowns in the US and Chinese markets weighing on the global economy.

Against this economic background, the Chancellor pledged to deliver a "budget that puts security first". Click below for more:

https://drive.google.com/file/d/0BxT4ZuA72V-NdXFVbURGaTJJaFE/view?usp=sharing

Market Overview - Oxfordshire

Evening all,

Staying in tap with our market is key, so I thought the following would make an interesting read for you all. 

https://drive.google.com/file/d/0BxT4ZuA72V-NYVE0VlZiOF85SXc/view?usp=sharing

Call me or pop in if you would like to discuss.

Happy weekend!

Richard

Oxford landlord licensing scheme update

Just over a week after David Cameron’s announcement of a national mandatory licensing scheme for private landlords, there has now been some further clarification.

It will apply to Houses in Multiple Occupation or “shared housing” only. However, there is to be a new definition of HMO.

The new licensing regime will extend the existing statutory licensing regime for HMOs – currently this applies to properties of three or more storeys high, lived in by five individuals making up two or more households.

The Government will consult on the amendment of the definition of a mandatory licensable HMO.
For example, it could propose lowering the three storeys down to one, to include “beds in sheds”, and it might propose removing the “more than one household” test or reducing the number of sharers. It could mean that landlords who believe they have fairly ordinary rental properties find they have licensable HMOs. A new HMO definition could also run the risk of  some rental properties at times being licensable HMOs and at other times not – depending on who was living there.
There is no guidance yet on the proposed timetable for the consultation, so at this moment it is very much a case of 'as you were', but there will undoubtedly be more to follow.

While landlords and agents will widely welcome the clarification, after concern that mandatory licensing would apply to landlords of all types of rental property, there is nevertheless concern.
Many properties and landlords are not currently covered by additional licensing schemes, since a number of local authorities do not operate these. If a large tranche of properties now have to be mandatorily licensed, this raises enforcement issues given how under-resourced most councils already are. More importantly for landlords there will be great concern at the ongoing cost of such changes should they be implemented.

As mentioned in my previous post and of further concern is the ‘small print’ to the Queen’s Speech, which has now been published.

This makes it clear that the Government “will build on the national roll-out of the landlord scheme established in the Immigration Act 2014 and make it easier to evict illegal migrants”. Again, there is no timetable for the national roll-out of the Right to Rent scheme currently being tested in the west midlands. Nor is there yet any official assessment of how this pilot has gone. However, it would appear that landlords and agents will have to bring themselves quickly up to speed on the duty to check the immigration status of prospective tenants if this moves forward as I expect.

It is also not clear how the Government plans to make it easier to evict illegal migrants, with lawyers warning this could be a legal minefield.

This is the word as I know it currently. I will keep you posted.

Richard

We shouldn't rush ahead with immigration checks just yet.

You will undoubtedly be aware of the governments plan to roll out immigration checks across the UK to all landlords and agencies when vetting overseas tenants. The plan has been to do this ASAP now that the Conservatives hold a majority government,  yet my advice is to hold that thought until the results of the pilot scheme, currently being run in the West Midlands has been complied and considered.

Only last week a reminder was sent out for landlords and agents in this region to complete the official survey which suggests that we will not see any concrete findings until later this year.

It seems illogical to roll out a scheme without firstly considering the results of this pilot and all affected parties and representatives having had the right to discuss before any decision is taken on who has the 'right to rent'.

There clearly is alot that needs considering before simply rolling this out. There must be consideration on agent and landlord workload in addition to how effective the checks will be, not to mention whether there will be robust Home Office support for all parties concerned. It would also be interesting to note exactly what the associated costs for these sort of checks will be when you consider that landlord, and certainly agencies, are under intense scrutiny regarding the fees they already charge tenants.

All in all I am hoping that we achieve a considered approach to this proposed legislation rather than going in feet first without a thought for the people it will really affect. Time will tell whether this government will firstly consider the opinions of those that matter before introducing anything.

More to follow....

Regards

Richard

Is Kidlington, Oxford's dark horse?

Afternoon all,

For all my die hard blog followers out there ( he says in non delusional fashion!) you will have no doubt noted in recent months that I have posted alot of available property to purchase in the Kidlington area. Why you may ask? Well a landlord popped in to see me a couple of months back about a property he went to view for sale in The Phelps, Kidlington. It was an open house from 11am and he reported in excess of 15 viewers of which most were there for investment, so he wondered why the mad rush for this location?  I decided to look into this further.........

Keeping it relevant I decided to pick on two locations - The Phelps, Kidlington and Wilsdon Way, Kidlington.

A 2 bedroom house in The Phelps recently sold for £205,000 on the 17th May 2013. It then sold again just 18 months later on the28th November 2014 for £250,000. Another 2 bedroom house in this location went for £159,950 in April 2004 and resold on 5th September 2014 for £250,000. Not bad on the CA front you will agree.

2 properties have recently sold in Wilsdon Way both of which were 1 bedrooms properties. Both of which sold for £172,500 in March 2015. If you compare this with purchase in August 2013 it shows a £33k appreciation.

Equally both locations show decent rental movement as well. A 2 bedroom property in The Phelps was renting for £750 in 2010. You can now pick one up for £1000 per calendar month in 2015.

So why Kidlington I hear you ask and why all of this activity from investors recently? Well Kidlington is no great secret. It is close to Oxford, yet cheaper. The returns for these properties are very healthy at 5% + which is becoming very difficult to achieve in certain parts of the city centre. And the pierce de resistance is the rail line going through shortly which will only further the appeal for commuters and people visiting the great city.

Kidlington wont remain a secret for long though folks. Prices are already beginning to climb as the word catches on.

For investment advice on this location or anywhere in Oxford please feel free to call me.

Richard

Landlord and agents may be hit by new heating regulations

Oh what great news for us all. More suggestive legislation! Here is the word with more to follow.....


The Residential Landlords Association says some agents and landlords may be required to notify the National Measurement and Regulation Office regarding their property heating systems by the end of this calendar year.

Typically, anything regarded as a communal heating system will typically trigger a need for landlords to provide details to the NMRO, it says.

The RLA hoped these notification responsibilities would only impact institutional landlords, such as university halls and nursing homes. However, it appears they may affect HMO and bedsit property landlords and agents acting on their behalf, who could be required to send notification of their ‘heating network’ to the relevant authorities.

A landlord must submit notification to the NMRO regarding details about the heating system of the property by December 31 this year and, if required, install individual meters by the start of next April. There will be ongoing duties regarding maintenance and billing.

The RLA advises that an agent or landlord is a heat supplier if all of the following apply:

- there is distribution of thermal energy in the form of steam, hot water, or chilled liquids from a central source in a building (eg a gas boiler);

- the thermal energy is used to provide heating, hot water or cooling;

- the building is occupied by more than one final customer;

- the landlord bills more than one occupier for the heat or hot water that that person has used (or a proportion thereof).

Call me if in doubt peeps.

Investment in OX3 - a beauty!

Back after the break folks with another cracking investment opportunity.

A 1 bedroom second floor apartment on with yours truly at £195,000 offering £900 per calendar month which gives you a 5.5% yield straight out. this is based on the terrible scenario where you have to purchase at asking price and I dont get the £925 per calendar month I would actually be asking for of course!

This let in 2014 within 4 days of it coming on and another 1 bedroom 2nd floor apartment I look after went within the same time frame. They are stick on lets these ones and show positive capital value from purchase history. This one shows a £50k rise from 2008 based on asking price and as I keep saying folks, I dont know any savings account that offers that sort of return!

Call me for more.

Best regards

Oxford heading the list outside the capital

Rising demand from international buyers and others from London relocating to Oxford has contributed to price growth in the city’s prime property market, new research shows.
 
Oxford is a key city outside of London and attracts people because of its internationally renowned university and research shows that last year it outperformed both the wider prime property market in the UK and in the South East.

Prices increased by 1.8% between October and December 2014, taking the annual rise in values in the city to 6.1%. Demand for homes valued between £1 million and £2 million was especially strong.

A key driver of Oxford’s property market performance has been demand for homes from buyers from outside of the city. Indeed, the proportion of property buyers from outside Oxford more than doubled in 2014 compared to the previous year, accounting for 52% of all Knight Frank sales in the city last year, compared to just 24% in 2013.

Demand from Londoners relocating to Oxford rose significantly year on year, from 3% to 18%, with many such buyers looking to take advantage of the relative price difference that currently exists between house prices in the capital and in Oxford. The proportion of international buyers in the city also rose to 17% in 2014, up from 11% the previous year.

Access to top performing schools, strong local employment, as well as improving transport links into London, including a new rail line between Oxford and London Marylebone which is due to open this summer , have helped boost high levels of demand in Oxford, according to the report.

The number of potential new buyers registering their interest in purchasing a new home was 18% higher last year than 2013 and the number of property viewings in the city was 8% higher over the same time.

For more on this a how the lettings market compares please call me.

Best regards

Property Investment Weekly - another cracker in central Oxford

LION BREWERY, OXFORD

I hope you all had a smashing Easter.

This 2 bedroom, 2 bathroom apartment in the Lion Brewery is on with us and available at £475,000

Investor heaven

It is currently rented through us at £1575 and I anticipate £1600 - £1650 per calendar month in this current market which gives it a 4.2% yield but its the location and capital appreciation that really give this its appeal.

It is right in the heart of the city centre and in one of the most sought after developments in Oxford. This property was purchased on 16th Feb 2006 for £282,000. If it is to sell for its asking price this represents a 41% increase to present date and I dont know any interest savings account that can do that for you!

Call me to find out more.

Best regards

What does your Oxford investment look like now??

Ever wondered how your property is performing financially compared with when you purchased it?

Its fair to say that the UK market is well on the road to recovery so now is a very good time to perhaps consider what your biggest investment is worth and how it is holding up against other locations in Oxford.

Here are a few examples based on actual purchase prices on how things have moved in Oxford since 2003 in the selected areas including rental movement:

 
Empress Court, OX1 (1 bed apartments)

Purchase price 6th June 2006 - £210,000
Sold price 8th August 2014 - £285,000
Estimated value now - £315,000 - £330,000
Rental price 2006 - £995pcm
Current rental projection - £1295pcm


Walton Well Rd, Jericho, OX2 (2 bed apartments)

Purchase price 23rd Jan 2008 - £405,000
Sold price 1st October 2012 - £485,000
Estimated value now - £600,000
Rental price 2006 - £1250pcm
Current rental projection - £1600 - £1800 pcm


Reliance Way, Cowley OX4 (2 bed apartments)

Purchase price 16th March 2007 - £244,220
Sold price 12th May 2014 - £305,000
Estimated Value now - £315 - 325,000
Rental price 2006 - £950pcm
Current rental projection - £1200 - £1295pcm

Millway, Wolvercote, OX2 (1 bed apartments)

Purchase price 22nd December 2004 - £136,000
Sold price 28th Feb 2014 - £185,000
Estimated Value now - £315 - 325,000
Rental price 2009 - £700pcm
Current rental projection - £875 - £900pcm




Greater Leys, Cowley OX4 (2 bed house)

Purchase price 19th May 2000 - £95,000
Estimated value now - £230,000
Rental price 2009 - £795pcm
Current rental projection - £895 - 950pcm

Sherwood Place, Headington OX3 (2 bed apartments)

Purchase price 30th June 2005 - £177,650
Sold price 17th Sept 2014 - £225,000
Estimated value now - £250,000
Rental price 2007 - £875pcm
Current rental projection - £1075pcm


Lion Brewery, Oxford, OX1 (2 bed apartments)

Purchased on the 24th March 2004  £299,000






Sold price 27th October 2014 - £527,000
Estimated value now - £575,000
Rental price 2007 - £1450pcm
Current rental projection (variable) £1650 - £1995pcm


Beech Road, Headington, OX1 (2 bed apartments)

Purchased on the 5th Jan 2005  £330,000
Sold price 31st October 2014 - £375,000
Estimated value now - £375,000
Rental price 2007 - £1175pcm
Current rental projection (variable) £1300 - £1350pcm

As I say these are only examples folks. There are so many more so call me to discuss the location and variance of your property.

Best regards

Richard

Deal of the week

Hey folks,

What with all this budget news and recent suggestive measures in the rented sector I have completely neglected my investment duties!

YIELD, YIELD, YIELD!!!

Back to it then and I stumbled across this one. On with Chancellors for £175,000. You can expect £875 for this which starts you out at a 6% yield. Aces!!

Plenty of room for appreciation as well both for rent and future selling. On the 27th June 2014 a similar property sold for £160,000. If we are to believe said agent then this is not a bad movement in the last 9 months.

From the rental perspective these were kicking around at £825 at the start of 2014. Rental continues to move in a positive way and has done in Oxford for a long time, but this one offers more redeeming features other than the apartment itself. It sits close to Headington town centre, is ideal for the A40 for those of you who travel to London and is very well situated for hospitals (JR/ Nuffield)

Of the 4 the I look after on this block, not one of them has or ever has had a void. This is the way of 1 bedroom modern apartments especially in a sought after area such as OX3.

Call me for more.

Best regards

Budget surprise for rented sector – all tenants to be allowed to sub-let

After the Chancellor sat down, it emerged that there are plans to make it illegal to prevent private tenants from sub-letting.

The small print of the Budget – which often proves crucial – reveals the intention to make it illegal for tenancy agreements to include clauses that prevent sub-letting.

While the wording is not particularly clear, it could be seen as a green light for the often controversial practice of rent-to-rent.

Page 51 of the Budget Red Book outlines measures to “make it easier for individuals to sub-let a room”.

The Government says it intends to legislate to “prevent the use of clauses in private fixed-term residential tenancy agreements that expressly rule out sub-letting or otherwise sharing space on a short term basis, and consider extending this prohibition to statutory periodic tenancies”.
The move came under strong attack from Alan Ward, chairman of the Residential Landlords Association.

He said: “The measures on sub-letting are a nightmare in the making and smack of ‘back of the *** packet’ policy making.

“Key questions remained unanswered such as who will be responsible for a property if the tenant sub-letting leaves the house but the tenant they are sub-letting to stays?

“Similarly, given the Government wants landlords to check the immigration status of their tenants, who would be responsible for checking the status where sub-letting occurs?
“Whilst the RLA awaits further detail on this measure, it is difficult to see landlords supporting it.”

More to follow when I have greater detail................

Official budget changes 2015

More from this years Budget from George Osbourne............................

Here are the full borrowing forecasts, compared to the previous ones, showing that Osborne has dropped his aim for a £21bn surplus by 2019-20.

• 2015-16: £90.2bn, down from £91.3bn in December’s Autumn Statement
• 2016-17: £75.3bn, down from £75.9bn
• 2017-18: £39.4bn, down from £40.9bn
• 2018-19: £12.8bn, down from £14.5bn
• 2019-20: A £5.2bn surplus, up from a £4bn surplus
• 2020-21: A £7bn surplus, compared with a £21bn surplus

 and now................................

BUDGET CHANGES 2015

• Lifetime pension relief allowance to be cut from £1.25m to £1m saving £600m. Allowance to be indexed from 2018
• Tax avoidance crackdown to raise 3.1bn
• Bank levy to go up raising £900m
• North Sea oil industry to get tax cuts worth 1.3bn
• Corporation tax to be cut by 20% in April
• Abolishing annual tax return altogether
• Cutting beer duty by 1 pence. The second reduction in a row.
• Scotch Whiskey duty by 2%
• Cutting duty on cider by 2%
• Fuel duty increase scheduled for September 2015 to be frozen
• Personal tax free allowance increased to £10,800 next year and £11,000 the year after.
• New help to buy ISA's to help first time buyers

The 2015 budget as it happens...............

So folks its the last chance for Mr Osbourne to make a national impression on us all in today's budget and the last  one prior the General Election on 7th May 2015, so here are the highlights as they go live:

Highlights from Osbourne's opening gambit:

Osborne says he reports on a Britain that is growing, creating jobs and paying its ways. We took difficult decisions ... and it worked. Britain is walking tall again.

• Britain grew faster last year than any other major economy.
• More people have jobs in Britain than ever before.
• Living standards will be higher than in 2010.
• The deficit has fallen by a half.
• And bank shares are being sold, and taxpayers’ money recovered
•  Osborne says the OBR has confirmed Britain grew buy 2.6% last year.
•  OBR forecast growth has been revised upwards, at 2.5% this year, 2.3% next year and for the following two years, and 2.4% in 2019.
• Unemployment forecast down this year to 5.3%. Its lowest rate since 1975. 
• National minimum wage up from 
• GDP per capita is up 5%
•  Osborne says he can afford real increases in the national minimum wage. By the end of the decade it will be more than £8.
• Forecast for inflation at 0.2% for this year
•  Osborne announces sale of £13bn of mortgage assets from Northern Rock and Bradford and Bingley to be sold.
• Lloyds Bank assets worth £9bn also being sold.

 Budget changes and more to follow...................


Best regards

Changes affecting AST's in England..

Proposed changes affecting ASTs in England

On 5^th February 2015, the Government announced changes proposed by the Deregulation Bill 2015.

The Deregulation Bill intends to restrict a landlord’s ability to rely on a notice ending residential assured shorthold tenancies (ASTs) under Section 21 of the Housing Act 1988.

What this means for Section 21 Notices 

 

Firstly, I just want to clarify what a Section 21 does for landlords now.

A Section 21 notice is now the only means that a Landlord can retrieve possession of his or her property without grounds or reason. It can be issued at any time, with a minimum notice of two months, during a fixed term contract in order to regain possession at the end of that fixed term.
It can be issued also during a Statutory Periodic contract, again within a minimum notice period of two months, for possession to be gained by the Landlord. Should a tenant not vacate at the end of the notice period, possession will be granted by the court and will always be granted as long as the notice has been issued correctly and the dates are in line with the dates of the tenancy.

Landlords may require their property back for a variety of reasons, it may be financial, personal or because the tenancy has not been successful. Many landlords may not want to issue the Section 21, they may have a perfectly good tenant in the property but for a personal reason they need the property back.

A Section 21 allows the owner of the property to claim possession of their property.

What the Deregulation Bill would mean for Section 21 Notices:

 

• A Section 21 Notice cannot be served until month four of a tenancy (therefore cannot be issued at the start of a AST)
• A Section 21 Notice is invalid if before it was issued a tenant had made a complaint in writing to the landlord regarding the condition of the dwelling, and
• The Landlord did not respond to the complaint in 14 days, did not provide an adequate response, or gave a Section 21 Notice following the complaint
• A Section 21 Notice would be invalid if then a tenant took the same complaint to the local authority, and
• The local authority served a relevant notice to the landlord in relation to the complaint, and
• If the Section 21 Notice was not given before the tenants complaint to the local authority, it was given before the service of the relevant notice.
• If a landlord fails to comply with obligations relating to Energy Performance Certificates and Gas Safety Certificates, the eviction of a tenant will be suspended while the landlord is in breach.
• Exemption would be if the landlord is genuinely selling the property and be able to provide evidence they are not selling to a friend or family member.

**These provisions will not affect ASTs where the fixed term was granted before these provisions come into force**

ADVICE

We advice all landlords and agents to serve section 21 notices before 30 March 2015.

More to follow folks but call me in the meantime if you have any questions.

Best regards