New electrical safety standards are coming soon to PRS…

The Government plans to introduce mandatory electrical inspections in premises let to one or more people who are occupying the premises as their main residence and paying rent.

These regulations will apply to new tenancies from 1st July 2020 and will be rolled out to all existing tenancies from 1st April 2021.

Under the regulations private landlords will be required to carry out checks to ensure that their electrical installations comply with requisite electrical safety standards. These are set out in the 2018 edition of the IET wiring regulations. The electrical installations must be tested and reported on by a qualified person. The first test must be carried out before a new tenancy starts or by the 1st April 2021 where a tenancy is already in place. Further testing must be done every 5 years.
Landlords must give a copy of the report to the tenant within 28 days. New tenants must receive a copy before they occupy the property. Should the local authority request a copy this must be given within 7 days.

If the report highlights remedial works the landlord must carry out the works within 28 days of the inspection. Confirming to the tenant(s) and local authority when the works have been completed.

If you require further information, please contact Bricknells Rentals 01709 365584.

More New Legislations for 2020

Capital Gains tax changes to be applied in April

Until now CGT has been paid on gains made through the sale of a property that isn’t the owners principal home.
Owners can also seek lettings relief if they once lived in the non-principal home themselves. However from April this is scrapped and landlords can only claim lettings relief if they share the property with the tenant.
Also from April, landlords will need to pay the full amount of CGT owed on a sale within 30 days. Currently they have until the next tax year to pay the CGT.

 

Mandatory CMP for Agents from April

New rules on money laundering have been extended to cover letting agents with an April 2020 deadline for agents to join an official Client Money Protection Scheme. There was a grace period agreed following technical problems with the original 2019 deadline.

 

Call the office for further information.

New Legislation to be introduced in 2020 – Are you ready??

1. Extension of the Homes (Fitness for Human Habitation) Act

From March 2020 the above act which forces landlords and agents to carry out essential repairs / improvements to a property or risk being sued is being extended to include existing statutory periodic tenancies.
Currently it only applies to tenancies that signed contracts on or after 20th March 2019.
This legislation applies in England only – with responsibility for these standards falling within the scope of the Renting Homes (Wales) Act

2. Minimum Energy Efficiency Standards

From April 1, all existing tenancies will need to comply with the law introduced in 2018 whereby a property cannot be let to new tenants unless it has an EPC rating of E or better.
Contact Bricknells to discuss options or applying for an exemption.

More to follow…

Landlords are you aware of the HHSRS?

This is the Housing Health and Safety Rating System which is a system that identifies hazards that may be present in a property and then assesses the risk posed by the presence of that hazard.
So if the Environmental Health Department or the Council do an inspection of your property they will identify any present hazards (against 29 defined hazards listed in the HHSRS) and carry out a risk assessment based on the likelihood of an incident occurring.

Think about the hazard excess cold – It is mid winter the boiler goes down, the tenant is an 80 year old individual.
The hazard is identified and the risk of injury to the individual is high.

So if you are a landlord we suggest you ‘Google’ HHSRS and acquaint yourself 29 hazards that may be present in the Home.
It is important to make sure your property is safe especially now that the Homes (Fitness for Human Habitation Bill) 2018 has been introduced.

Any help don’t hesitate to call Bricknells Rentals.

Malawi – The Bwengu Project

Bwengu Project Malawi
Our operations manager, Chris Holmes, will be talking part in the Bwengu project in Malawi this month. See the latest updates about the amazing work the team will be doing for the children of Malawi on our Facebook page! A very worthy cause that we are extremely proud to be part of.

Here’s Chris’ final statement before jetting off to start this incredible adventure.

“Just finished packing the 5 tee shirts, a pair of trousers and shorts plus socks and underwear.

The rest of the baggage is teaching equipment for the schools and football shirts and shorts for the children.

A special thanks to all who donated the football kits and a special thanks to the girls at Bricknells especially Natalie for coordinating the donation of the football kits.

Thanks also to Anne Marie of Spencer Harvey Estate Agents for the Manchester United ‘Red Devil’ kit.

We intend to hand these over once in Malawi to Headmaster Dickens – he will take out the older boys kits and distribute those.

Then he will give the younger boys kits to Chinunkha Junior head teacher for the youngsters – all the kids love football. Photos to follow.

Taxi arrives at 3 pm and we are off, now where did I put that mosquito net!

Will aim to keep you all posted”

Below is a link of how you can help support this incredible cause.

Support Us

We gave you a taster, do you want to know more about rent to own?

What is Rent to Own

The concept has been around for a long time in one way or another, Brickell’s have developed the process, so it is attractive to both Landlords and Tenants alike.

 

In a nutshell

Rent to own is whereby Bricknell’s let a property on behalf of a Landlord to a Tenant Buyer who aspires of owning their own home.

The Tenant Buyer then rents the property at a pre-agreed rent for a pre-agreed term (typically 5-10 years).

The Tenant Buyer has the option to buy the property at a pre-agreed price at some point in the future.

So, the tenant / landlord agrees a fixed rent for an agreed fixed term.

They also agree a price that the tenant has the option to purchase from the landlord at the end of the fixed term.

In additional to the rent the tenant pays a ‘top up’ which over the fixed term will accrue to 10% of the agreed selling price enabling them to provide a deposit to purchase.

 

Who is it for?

Tenant Buyers

RTO is perfect for Tenant Buyers who aspire of owning their own home but who are currently in no position to purchase.

The main three reasons that Tenant Buyers become Tenant Buyers rather than immediate purchasers are:

Deposit – a lot of prospective homeowners don’t have enough deposit saved up.

Poor Credit – When finances are tight people prioritise differently and some financial commitments are missed.

Self Employed – It can be very difficult to get a mortgage if you are self-employed and have under 3 years accounts.

Landlords

More profitable – On average Rent to Own is more profitable than traditional single lets.

Owe more than the property is worth – if the property is worth £95,000 but you owe £100,000, you will still have to pay back £5,000 to the mortgage company if you want to sell the property. With the way RTO is structured you will in most circumstances get more back than your property is worth should you sell it to a Tenant Buyer.

The tenant is responsible for repairs – As the Tenant Buyer has a vested interest in the property, they are responsible for repairs. However, the Landlord cannot opt out of their legal responsibility to carry out repairs as per the Landlord and Tenant Act 1985. What can be done is the landlord can be compensated for the cost of these repairs from the recurring monthly ‘top up’ which the Tenant Buyer is contractually obliged to pay on a monthly basis.

Exit strategy – With RTO you get a clear indication of when the Tenant Buyer will buy the property, although as with any sale it may not go through. Its an option, not an obligation. Except with RTO the Tenant Buyer has rented the property for several years, has in many cases improved the property and has a ‘top up’ account that if they don’t purchase the property, they will forfeit all the money in that account. RTO gives a planned sale of the property and therefore one can take advantage of CGT allowances.

Less hassle – RTO gives that consistency of a hassle-free portfolio. The main reason being that the Tenant Buyer is more like a homeowner than a tenant and treats their home as such, tends not to miss rent payments and looks after the property.

Home improvement – We have found in many cases the Tenant Buyer has improved the property in some form or other. 

 

What agreements are needed

AST – between the Letting Agent and Tenant Buyer

Option Agreement – between Tenant Buyer and Landlord

Management Agreement – between Landlord and Letting Agent

 

IF YOU THANK THIS IS OF INTEREST TO YOU, WE WOULD SUGGEST A MEETING TO DISCUSS YOUR INDIVIDUAL CIRCUMSTANCES AND SEE IF RTO IS RIGHT FOR YOU.

Please call Chris Holmes 07743 702739

 

Is this a landlords exit strategy that fulfils tenants aspirations?

At Bricknells we subscribe to many industry publications and a particular headline caught my eye over the past week:

‘Why I may quit buy to let – a landlord explains their S21 dilemma’

This was all to do with landlord confidence being eroded by the suggestion that Section 21’s are to be abolished.

For those unaware Section 21 notices are issued where landlords could gain repossession of the property through ‘no fault’ of the tenant.
This does seem unfair where tenants through no fault of their own can be homeless in 2 months.
However there are tenants that don’t pay the rent, don’t look after the property and for them the landlords need the security of a Section 21 notice.
However that’s the system and I don’t suppose whatever I say will influence the government’s decision.

However thinking out loud wouldn’t it be good if a landlord could let a property to a tenant for a fix term at an agreed rent and after the fix term the tenant had an option to buy at a pre-agreed price.

This would give the tenant fulfilment of their aspiration to buy a property and the landlord has an exit strategy for their investment.

I don’t want to say too much now but this is our very own new initiative:

‘RENT TO OWN’

We will explain more over the coming weeks but if you want a head start feel free to contact Chris Holmes on mobile number 07743 702739

Inventories

Inventories

Both the Tenancy Deposit Scheme (TDS) and the Deposit Protection Service (DPS) have issued renewed guidance and top tips for Landlord’s and Letting Agents on the best practice for property inventories and schedules of condition. Having a detailed record of the property contents and condition is vital when it comes to deposit negotiations at the end of the tenancy. It is therefore a two-part process – a detailed report when a tenant moves in and similarly a thorough end of tenancy check both with photos.

Bricknells have invested in great software to produce good quality inventories that allow for descriptions, condition and time and date stamped photos so you can be sure the evidence is clear and negotiations run smoothly.

Contact Bricknells if you have an inventory that needs completing for your next tenant move in.

TDS guidance

DPS top tips

Tenant Fees Act 2019 – Its here!!!

From the 1st June 2019 the Tenant Fees Act comes into force affecting all who operate in the Private Rented Sector. All tenancies entered into after this date (including tenancy renewals) will be subject to the legislation which bans ALL fees and charges to Tenant’s apart from 7 specific charges that are listed below.

With potential civil penalties of up to £5,000 it is important that all Landlord’s and Letting Agents understand the new rules and do not take any payments from Tenant’s that are now banned.

1, Rent

2, Utilities

3, Holding Deposit (of no more than 1 weeks rent) unless the annual rent is over £50,000

4, Deposit (no more than 5 weeks rent OR no more than 6 weeks rent if the annual rent is over £50,000)

5, Tenant Default Fees of which there are two. One is Missed rent payments – a charge of 3% above the Bank of England base rate can be levied if rent remains unpaid after 14 days from when it is due. The second is Lost keys and other security devices

6, Variation or novation of contract (capped at £50)

7, Surrender of Tenancy

Bricknells have made themselves Tenant Fee Ban compliant. If you manage your own properties then call Bricknells for a review of your property portfolio and we will provide free advice on how this recent legislation affects you and how we can help.

For further in depth information here is a link to the Governments guidance document for Landlords and Letting Agents

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/791273/TFA_Guidance_for_LandlordsAgents.pdf