Best practice for new landlords

Becoming a buy-to-let landlord can be a very profitable use of your capital. That is not to suggest that it is easy to do, especially if you’re taking on the management of the property portfolio yourself. As such, having the right knowledge and putting the right plan in place is important.

Whether you are doing it for the first time or are a portfolio landlord, it is important you keep on top of your record keeping. Good record keeping not only helps you keep track of income and outgoings, but it is also important for staying on top of administrative tasks, like when insurance renewals are due. It can also be a lifesaver if you are unfortunate enough to face a tenant dispute.

It is fair to say you will experience periods when your property is vacant; generally, this is after one tenancy has ended and you are advertising the property for new tenants.

Buy-to-lets remain resilient

I can’t help wondering if and when the time will come when I don’t have to refer to the pandemic in some shape or form when writing a piece reflecting on the buy-to-let sector.

By this I certainly don’t mean we should ignore it, how could we? It’s been a turbulent period for many homeowners, tenants and landlords and it will be some time until we, as an industry and as an economy, get to grips with the fallout from this. In the meantime, we continue to filter through its lingering influence when it comes to the impact on rents, payments and voids, as evidenced in the recent National Landlord Index.

Let’s start with the Index. This uncovered new insights which showed that nearly a third of landlords (30.3%) across the UK have agreed to some form of rent reduction during the pandemic due to many tenants struggling with rental payments. The index also uncovered that 16.2% of those surveyed have some level of historic rental debt due to COVID-19 with the average rental arrears owed to landlords currently standing at £2,523.

Now may be the best time for Landlords to consider re-mortgaging as we could be reaching the end of a golden age for cheap mortgages

The latest Bank of England Credit Conditions Survey for the third quarter of 2021 shows that mortgages have been getting cheaper, with the gap between the Bank of England base rate and mortgage rates narrowing.

The report also highlights that it has been gradually getting easier to get a mortgage, particularly for those with less equity. We may be reaching the end of a golden age for cheap mortgages. Right now, mortgages have been getting cheaper, and banks are increasingly willing to lend, so there’s never been a better time to consider re-mortgaging onto a cheaper fixed-rate deal if you can.

Tenants are willing to pay more

More than half of tenants would be willing to pay more in rent in order to live in a greener home, new research has revealed.

The survey found that 98% of renters would prefer to live in an energy-efficient home and 52% would be willing to pay an extra 10% in order to do so.

A third of renters (33%) would accept a 5% rent increase, while 8% would be willing to pay an extra 20% if it meant they could rent a greener home.

The vast majority of renters (85%) were happy to consider a so-called “green lease”, which includes clauses designed to ensure the tenant and landlord work together to improve the home’s energy efficiency, while reducing costs and environmental impact.

Already, 95% of renters expect their property to have double glazing and 92% expect it to have loft or wall insulation. Furthermore, 92% expect recycling bins and 73% expect LED lightbulbs, 56% expect smart meters and 38% expect smart thermostats.