LANDLORDS AND TENANTS ARE A WORKING PARTNERSHIP

Old style conflicts between tenants in rented properties and their private sector landlords are largely the stuff of fading legend these days – according to the country’s largest property franchise Belvoir.

Delia Thing - Lettings Manager

“In the real world, no-one achieves anything that old fashioned way,” says Delia Thing, the Lettings Manager of Belvoir Andover on Bridge Street. “The modern approach is more about tenants and landlords cultivating partnerships.

“Both have interests to protect and they can both achieve that better by working together. If they can’t, then something is wrong – and mis-matches do happen - but good relationships are more the order of today.

“The truth is that a rented property may be part of a landlord’s livelihood but it’s also home to the tenant and the ideal situation is for them to work around each other.”

A professional lettings and management agency, such as Belvoir, will always look after the interests of both parties.

Methods of creating perfect harmony include:

·           Agreeing on periodic visits so the landlord can see how a property is being looked after. That also gives a chance to see if there are any repair jobs or maintenance issues that need attention. And it gives tenants an opportunity to discuss anything that is bothering them.

·           Tenants letting landlords, or their agents, know if they are planning a holiday and the property is going to be empty. Occasional visits can be made to ensure the property and the tenant’s possessions are safe.

·           By mutual agreement neighbours can have the agent’s or landlord’s phone number so they can get in touch if anything seems wrong, e.g. a burglary, fire, flooding, intruders or unusual behaviour.

·           Along with a tenancy agreement Belvoir provides new occupiers and landlords with a video inventory to record the state of decoration, furnishings and fittings. “An honest, upfront, practice like this creates a precise record of contents and condition that is beyond dispute,” says Delia. “And that can save a lot of arguments later – especially over returning deposits.”

·           Important communications should be done by e-mail or letter - which creates a paper trail of any problem that arises. This gives both tenant and landlord a firm record instead of trying to rely on half-remembered conversations.

Phil Pinkney - Belvoir Andover Co Owner

Past conflicts in rented properties have swung from the serious to the comic.

According to official statistics, two years ago, the numbers of housing tenants growing commercial crops of cannabis was sufficiently large to lead the national Crimestoppers charity trust to publish an eight-page leaflet highlighting the issue.

While another recorded case outlined how a tenant caused irreparable damage to a washing machine at his furnished flat because he put in a house brick to “stonewash” his denim jeans.

“Whether it’s a laughing matter or an indictable criminal offence, the relationship between a tenant and a landlord is at the heart of today’s private rented sector,” says Phil Pinkney, co owner of Belvoir Andover.

“Closer relationships obviously work better for both parties and, thankfully, that’s the way things are moving. The 170 branches throughout our UK network are reporting fewer and fewer cases of serious conflict.

“The current housing crisis has turned the private rented sector into a major home provider with nearly two million landlords renting to some 10 million tenants and for them, working together means making it work.”

If you would like advise on buy to let or renting your property out, please contact Belvoir Andover on 01264 366611 or email us at info@belvoirandover.com

RESIDENTIAL RENT INCREASES COULD SLOW FOR TENANTS IN 2015

Market conditions point to static or low residential rental increases says Belvoir

The UK’s residential buy to let property sector is set for continued growth in 2015 with tenants, in particular, feeling the most benefit from prospective changes in the market. 

National residential lettings specialist, Belvoir, says that current economic conditions, combined with likely interest rate increases in 2015 and the uncertainty of Government policies following the General Election could result in either static or low rental increases next year.

Phil Pinkney, who co owns the Belvoir office on Bridge Street in Andover, says: ”Our past predictions for continued and sustained growth in the buy to let sector have been borne out by shifting market forces and we believe that the number of people choosing to rent – either for lifestyle or economic reasons – will continue to drive up demand for some time to come.”

He adds: “In 2015 we believe that rent rises are likely to be restricted by factors such as continued low disposable income amongst consumers, an anticipated interest rate hike towards the end of next year and a lower than expected forecast for economic development.”

Recent research suggests that rents will rise by an average 1.8 per cent over 2015 which is below the Bank of England’s target inflation rate of 2 per cent.

Belvoir’s independently commissioned Rental Index Report, which for the past seven years has tracked the ups and downs of the UK’s buy to let market, reveals that most of the company’s 160 offices nationwide witnessed little or no growth in rent levels throughout  the current year, albeit there have been falls and rises during this time.

“For the year ahead, we believe it unlikely that changes to rents will vary much more than 2014 versus 2013,” says Phil.

Analysis of regional rents in the Report revealed patchy variations across the country, with many rents not rising at the same levels as property prices - bringing good news to hard pressed tenants who have not seen a widespread increase in wages for some time.

“This has a major impact on rents because if ‘real’ wage levels and spending power do not increase, rents will also struggle to be increased.”

On a brighter note, many landlord investors benefited from a significant recovery in property prices in 2014. London and the South East saw rapid growth, while other areas around the UK achieved increased values of between 5 and 10 per cent.

“But any new investor in buy to let needs to consider all the facts and seek out expert advice and guidance so they can understand all the issues,” adds Phil.

“Each area of the country is different, so people must not assume anything about local property values or market conditions.  Our highly trained staff  have extensive local knowledge and a thorough understanding of how to maximise returns from property investment. If you contact our office we are happy to provide an initial, free consultation.”

Throughout 2014 home ownership continued to fall to its lowest level for a quarter of a century.

Whilst property prices experienced significant growth, greater mortgage restrictions introduced by the Bank of England designed to curb lending, kept many people off the property ladder – further strengthening demand in the private rental sector.   

As for 2015, a number of unknown variables could all have an impact on the market.
Pension reforms - due to come into force in April 2015, policies affecting the buy to let sector introduced as a result of the General Election and the impact of pending interest rates expected in Autumn of next year, will all shape the future of the market, which at present shows no sign of slowing down.

Increasing optimism combined with a recovering property market and current low interest rates will, in the immediate term, continue to make buy to let property investment an attractive proposition – especially for longer term investors.

According to industry estimates, the UK’s cumulative buy to let property portfolio could hit the £1 trillion mark next year. (It currently stands at £931 billion)
Just three months ago (September 2014) the Council of Mortgage Lenders announced a sharp rise in buy to let investment - up 26 per cent over the previous 12 months.
And a recent study claims that over half of residential property landlords in the UK are looking to buy more property in the new year.

All of these findings point towards continuing confidence amongst professional landlords and institutional investors, but the much debated impact of a new breed of ‘buy to let pensioners’ entering the market will only become clear after the new pension rules come into effect. 

“There is a groundswell of opinion that a considerable number of people will access their pension ‘pot’ to seek greater returns on their investments via buy to let – creating a new boom in the sector,” says Phil.

“The market supply of buy to let may be boosted by the impact of this new reform, but we would advise caution because property rental income should not be viewed as a replacement for pension income as the two are completely different. 

“Pension income tends to be low risk and index linked to rise with inflation whilst rental income can be more risky and typically does not grow in line with inflation.
Sourcing a suitable buy to let mortgage as a first-time landlord (especially at a later stage in life) could also prove difficult – even if you have access to a sizeable deposit.”

If you are a looking at becoming a landlord or you would like BELVOIR to help manage your existing portfolio, contact Phil Pinkney on 01264 366611 or by email phil.pinkney@belvoirandover.com

STOP PRESS: BELVOIR ANDOVER wins top National Award !

We are delighted to announce that Belvoir Andover has won ‘Best in South’ award at the glitzy National Belvoir Awards held at the Radisson Blu Hotel in the East Midlands last Friday Night.

The business owners were on hand to collect the award which has recognised Andover as being ‘Best in South’. The south territory has some 20 offices within it including the largest office in the country!

Best in South Award 2014

Phil Pinkney said ‘We are absolutely delighted to have received this award which recognises the efforts made by the whole team to enhance and expand the services offered to both its clients and fellow franchisees. The introduction of selling property has seen the biggest level of interest and we do not intend to rest until the public knows how much better we are at that too!’

Greg Greatbatch said ‘We were not expecting this award which makes receiving it even more special. To be recognised as ‘Best in South’ really makes all the hard work our team has put in over the last 12 months, really worthwhile. We were up against stiff competition with the largest Belvoir in the country being in the same south region!’

This is the second consecutive year that Belvoir Andover has won an award at the annual gathering of over 160 offices at their annual conference.

Belvoir Andover acquired two local estate agents in 2013, being Redwoods and ClearMove. They also moved into their Flagship offices on Bridge Street and doubled their team. Lastly 2013 saw the introduction of selling property too and Belvoir quickly became the second largest agent for selling in Andover.

Daniel Tarrant & Phil Pinkney on the night

When asked about the incredible amount of change that has taken place for the Andover office in 2013 they commented:

Greg Greatbatch said ‘It is important for us to consolidate our progress of 2013 and ensure that our commitment to outstanding customer service remains strong. We have made a considerable investment over the past 12 months, which we believe was essential to maintain our undisputed ‘Leading in Lettings’ crown, but also adding the additional services of sales and mortgages that was missing from our previous business model’ 

Daniel Tarrant commented ‘It has been an exciting journey over the past year, partnering with the incredibly successful Greg and Phil who have achieved such a phenomenal success with their agent since I met them back in 2005. I have always aspired to be my own boss and in 2013 my dream became a reality. I am proud to be working with these two bringing all my experience in successfully selling property in my home town of Andover. Clearly there was a gap in the market for offering a much higher level of customer service in estate agency than the public were used to which has played a big part in our success’ 

Phil Pinkney said ‘We have been very focused on where our business needed to be in order to offer our clients continued stability, high levels of customer service and a range of services that were consistent with the needs and demands of our extensive client base’ 

Phil Pinkney & Greg Greatbatch on the night

When asked what plans the business owners had for 2014 they commented:

‘We have a variety of plans for 2014. All will further enhance the service level and diversity that has been implemented in 2013. We plan to build on the team success of last year but you will see some new faces as both Karen and Emma go on maternity leave’ says Phil Pinkney

‘Commercial property sales and lettings were introduced in the late part of 2013 which has seen an enormous amount of interest with a number of successful contracts exchanged with large blue chip companies. We are expecting to see more and more commercial advertising boards go up around Andover in the coming months’ said Greg Greatbatch

‘We simply need more property to satisfy the intense demand we are seeing for residential property and the surprisingly high level of buy to let demand. There has been an unprecedented level of new investors coming in to our offices this year and we are delighted to be helping these new landlords start to build their buy to let portfolios’  says Daniel Tarrant

Belvoir Andover continues to go from strength to strength and is recognised as the leading property specialist in Andover. If you have a property to sell or let, join the success story by choosing Belvoir for all your property needs. Call us on 01264 366611 or email: andover@belvoirandover.com

Belvoir has been an owner operated business since 1997 and is part of a national network of other like minded agents.

www.belvoirandover.com

CHARITY AWARD FOR ANDOVER LETTINGS OFFICE

A property lettings agency in Andover has run away with a national award in recognition of its charity fund raising efforts for Macmillan Cancer Support.

Greg Greatbatch, who owns the Belvoir office (along with brother-in-law Phil Pinkney) on Winchester Street in Andover was declared a Charity Champion at the Belvoir annual ‘High Achievers’ award ceremony, staged at the Belton Woods Hotel, near Grantham, Lincolnshire.

The Belvoir Bronze Award recognises the contribution made by Greg and his colleague Emma Bevan who both completed a gruelling sponsored race in support of Belvoir’s company-wide campaign to raise money for Macmillan Cancer Support.

Greg explains: “We ran the 2012 BUPA London 10.6k in May last year, which was on the same course the Olympic athletes used.  Over ten thousand people took part in the race with a number of famous runners including Mo Farrah.

“Emma started training to get fit for her wedding, which was in early June and I was recovering from physio on my knees following an old cycling injury.

“The day of the race was absolutely beautiful, but it was also the hottest day of the year and running in a temperature of 26 degrees meant the heat was more of a challenge for us than the actual course. We had to keep swerving across the road to try and find some shade as relief from the heat.

“Our donations were from a variety of people, including our landlords.  We raised £687.20 for Macmillan, which was a great result but unfortunately, we couldn’t beat Mo Farah who won in record time!”

At the company’s annual awards evening, co-presented by comedienne Ruby Wax, Belvoir’s Chairman, Mike Goddard, said: ”Greg and his partner Phil Pinkney run their business with a real commitment and passion for community involvement and this is a tremendous achievement. The money raised through Greg and Emma’s gruelling run has given a considerable boost to Belvoir’s commitment to Macmillan.

“In February 2011, we aligned ourselves with Macmillan to raise £10,000, and in that first year I was pleased to announce we had smashed our target and raised £16,000. This year I am delighted that we increased our total raised to £25,013.67.   What a fantastic achievement!”

On receiving the award Greg said: ”We are absolutely delighted with this recognition.   We knew we had been shortlisted for an award and we were thrilled and excited just to be nominated as finalists.

“We owe a lot to the many people who sponsored us to help us smash the £500 target we had set ourselves!”

Tanya Taylor, a fundraising manager for Macmillan, said: “Greg and his team have made a major contribution to the overall sum raised by Belvoir over the past year.

“Thank you so much – this money will make a real difference. One in three people will get a cancer diagnosis at some point in their lives and there are currently two million people living with cancer in the UK.

“We currently support half of these people and every penny that you help to raise is greatly appreciated by everyone at the charity.”  

For more information about this and other awards, please visit our website www.belvoirandover.com/award.html

7 investment traps that could harm your wealth

Avoiding these common pitfalls could be a key to long-term investment success.

1. Too many eggs in one basket

When putting together your investment portfolio it's important to ensure you don't end up with concentrated exposure to a particular type of risk. One obvious area is industry sectors: consider the banking crisis in 2008, and the technology crash in 2000. Any investor whose portfolio was over exposed to these areas would have seen a dramatic fall.

Investors who took a more diversified approach would have seen a far smaller impact on their portfolio. Having a well-diversified portfolio is a key way to reduce risk.

2. Over-diversifying

Just as damaging as putting all your eggs in one basket is over-diversifying a portfolio – sometimes dubbed 'di-worse-ification'. This can happen quite easily when building up an investment portfolio over a number of years. You can end up with dozens of quite similar investments, collectively delivering average returns.

A more effective approach may be to focus on a handful of favorite fund managers investing in different areas of the market. Our Wealth 150 list, which contains our favorite funds in the major sectors, could help you with this choice.

3. Paying too much in charges

Aside from investment performance, a crucial factor affecting your total returns is the charges you pay.

Consider two funds, each delivering a return of 6% a year, but one with an annual charge of 1.5%, and the other with an annual charge of 1%. If you invested £10,000 in each:

• The fund with the lower annual charge would be worth £26,533 after 20 years
• The fund with the 1.5% annual charge would be worth £24,114 – or £2,419 less.

Keeping costs to an absolute minimum could mean thousands of pounds more added to the value of your investments over the long term. We can help you keep costs to a minimum by tailoring our services to your exact needs.

4. Not taking enough risk

Like many investors, you may be understandably nervous about taking risks with your hard earned capital. However, not taking enough risk can be just as damaging as taking too much risk.

One of the main dangers from not taking enough risk is that the spending power of your capital could fail to keep pace with inflation. While money saved in the bank might seem 'safe', in real terms its value is gradually falling every year because of inflation. Inflation of just 3% per year will nearly halve the spending power of capital over 20 years.

We believe taking more risk, in order to try and achieve an inflation-beating return, is therefore vital for any saver or investor taking a long-term view. However it is still important to have an emergency cash fund of say 3 to 6 months salary.

5. Poor administration

If you have investments dotted around between providers and you ever need to make any changes, you will often need to fill out a myriad of forms, which makes it a far more laborious process, and may prevent you from acting.

Good administration is key to managing your investments effectively. A good administration system means you can make changes quickly, conveniently and cost effectively. If it's easy to make changes you are also more likely to act, improving portfolio performance.

Good administration also helps you to gain a good overview of your portfolio. How much do you have in each area? Is it time to take profits? Making these decisions is far easier when you can view all your investments together, at a glance.

Here at Belvoir Andover, we can take the burden of the administration of your property portfolio away. Our accounts package is approved by the Institute of Chartered Accountants and we can readily provide you with annual accounts which can be, if requested, emailed direct to your accountant. We are also more than happy to have a one to one financial review of your portfolio, giving you market trends, rent reviews, yield report (see if you are achieving what you set out to achieve) and much more, contact our team to discuss this 01264 366611

6. Paying too much tax
Quite simply, the less tax you pay on your investments, the higher your returns will be. Fortunately the government offers a number of tax breaks to encourage investment. Two of the most popular are ISAs and pensions.

ISAs - if you hold your funds or shares within an ISA there is no tax to pay on any capital gains, and no further tax to pay on any income. Each tax year you have an ISA allowance, this tax year the allowance is £11,280, and used every year the ISA allowance allows you to build a significant portfolio of tax sheltered assets. What's more on the majority of funds the ISA comes with no extra charge, so many investors receive these benefits free. The icing on the cake is that with ISAs you can withdraw your capital at any time, so they are suitable for investors who want maximum flexibility.

Pensions offer similar tax benefits to ISAs, with a few important extras. Firstly when you add money to a pension you receive income tax relief, at a rate that depends on how much income tax you pay. So, for example, if you are a higher rate tax payer you could receive up to 40% tax relief on any contributions you make. It's also worth remembering that with pensions you can't access your capital until you retire. When you do, up to 25% can be taken as a tax free lump sum, with the remainder used to provide you with a taxable income in retirement.

Please note the value of tax shelters will depend on your own circumstances, and tax rules can change over time. The value of stock market investments can fall in value as well as rise, so you could get back less than you invest.

7. Focusing on the short-term

Legendary investor Warren Buffett famously once said "You can't buy what's popular and do well". There is a lesson here for all investors. Many are tempted to over-expose themselves to the latest 'hot' investment trend. Often these will be companies or sectors that just seem to rise relentlessly, giving the impression that you "can't lose". In the past sectors such as technology stocks have experienced such a rise, followed by a sharp fall in value, affecting the portfolios of thousands of investors.

Before you choose an investment, ask yourself: what is your attitude to risk? Would you be happy to hold it for the long-term? Do you think the shares represent fair value? Are there other overlooked areas which may offer better long term opportunity? Property can typically return you a minimum of a 10% yield and therefore represents a strong and reliable (when compared to alternative investments)

If you are thinking about investing in property we would recommend that you take independent financial advice. We are more than happy to help anyone get on the property investment ladder, please call Phil Pinkney at Belvoir Andover on 01264 366611 or visit our website at www.belvoirandover.com

Avoid Property Trading Tax by Belvoir Andover

 

Avoid Property Trading Tax top

Some people regularly purchase run-down houses, do them up and sell them on. If you do this as part of your building/property development business, the profits made on the sale of the properties may be taxed as trading income (tax rates: 20%, 40% or 50%). If you let the renovated properties, then sell them at a later date, the profits made on those sales will be taxed as capital gains (tax rates: 18% or 28%). The position is less clear cut if you live in each property for a period either during or after the renovations are undertaken. The Taxman is keen to charge any profits made on the renovated property as trading income, because if the profits are categorised as a capital gain, that gain may well be exempt from tax on the basis that the property was your main residence. For the Taxman to prove the money made from the property is trading income he must show the owner's motive for purchasing and renovating the property was to make a profit, and not simply to make the property more comfortable for the owner to reside in. This is difficult to prove. If the owner is a builder by trade the Taxman may also argue that the property renovation was undertaken as part of his building business, even if he also lived in the property. The Taxman may say the profits should be taxed as a trade if the owner has a history of purchasing and renovating many properties and living in each for only a short period.     If you would like to save more tax and get advice from property related specialists, please contact Greg Greatbatch at greg.greatbatch@belvoirlettings.com or telephone 01264 351222 (opt 2).   Belvoir Andover has been operating as a lettings specialist in Andover since 1997. Belvoir Lettings is a national network of franchise offices dedicated to offering the highest possible levels of customer service to both landlords and tenants. Visit www.belvoirandover.com for more information about us.

AN EXPERT ‘BUY-TO-LET’ CHECKLIST FROM BELVOIR

Buying-To-Let - popularly hailed as an alternative to badly performing pension funds – was slowed down by a recession that squeezed mortgage deals and discouraged housing investment.

 

But a reviving market is now generating more attractive mortgages, stimulating property prices and generally raising rent levels again, says Phil Pinkney, director of one of the UK’s leading residential lettings specialists, Belvoir, which has an office in Andover.

"Advice for new Buy-To-Let investors can still be contradictory and confusing," he says. "Like most things if you’re Buying-To-Let, you need to do it right and when a considerable amount of your own money is involved it becomes absolutely critical."

That’s why Belvoir has prepared a definitive checklist for anyone wanting to make a success of an investment in residential rental property. 

It offers a selection of do’s and don’ts, "But", says Phil

"it’s only guidance – we prefer to sit down, face-to-face, with a new potential investor and offer more solid professional advice, since everyone’s circumstances and expectations are very different. "

 

BELVOIR’S ‘BUY-TO - LET’ CHECKLIST 

 

1. Research your market – the area, the people you want to rent to, the available property, the benefits and the risks – and keep up with letting industry news.
2. Choose your preferred tenant type. Students? Young professionals? Families?
3. Find the right property that will appeal to them – houses, flats, older properties, newer builds? Students may not need anything particularly stylish but a young professional might.



Phil Pinkney - Belvoir Director

4. Then pick the right area where they want to live – parents may want to be close to schools and shops; wage earners need to commute to work; students have to be near to their college or university. Look outside your own area if necessary.
5. If local crime statistics are available, take a look and bear them in mind.
6. Study the condition of any property you are interested in – from roof, guttering and windows on the outside to condensation, leaks and electrical wiring on the inside. Be conscious of fire risks.
7. Check whether extensions or conversions have met planning permission or building regulations.
8. Don’t accept the first mortgage offer you get. Shop around. Gather information. Compare.
9. Get the maths right – your investment might give a better return in some other way. How much is the right property going to cost? Is the rent you expect to get enough to cover the mortgage and give a profitable return? Does the potential capital growth add up to a good investment?
10. Talk to an independent lettings agent before you buy. Most mistakes involve either wrong location or wrong price paid for a property.
11. Don't be greedy – Buying-To-Let should be approached as a long-term investment, not a quick fix.
12. Be prepared for costs that can upset your calculations – ongoing maintenance, small and major repairs, advertising, future rate rises, mortgage costs, agents fees, tax, falling house values, periods when you can’t find tenants and the property is empty.
13. Get the right insurance cover – and that can include insuring yourself against tenants who fail to pay rent.
14. If you’re going to manage the let yourself, be prepared to sacrifice your evenings and weekends!
15. If this is likely to be more of a drain than you are prepared for, seek out a professional, fully accredited lettings agent who, for a fee, will look after your property, your interests and your tenants on your behalf.
16. As well as being completely up to date on legal, legislative and property industry issues, a local agent such as Belvoir will have expert knowledge of the best rates from local electricians, plumbers and so on, which in itself, can be worth a weight in gold. Belvoir local offices do not make any charge for pre-purchase advice, property visits or rental valuations.

"Above all, before you do anything, get professional advice ," says Phil.

"As the legendary, oil well fire-fighter, ‘Red’ Adair, once said: "If you think it’s expensive to hire a professional to do the job, wait till you hire an amateur."!

 

For more information or to book an appointment with Phil or Natasha, please contact Belvoir Lettings on 01264 366611 or view more information on our website: http://www.belvoirandover.com/landlords.html

 

Three Words That Can Save The Day

Three words can make or break deposit disputes between landlords and tenants … inventory, inventory, inventory.

“Just as ‘location’ is a key word in buying a property, ‘inventory’ is a key word in renting it,” says Greg Greatbatch, Director of the country’s leading residential lettings specialist in Andover, Belvoir, which has an office on Winchester Street.

Disagreements over the condition of property, at the end of a tenancy, is a major reason for disputes arising over how much of the tenant’s deposit should be returned, because landlords often deduct the cost of cleaning, replacing or repairing household items, furniture and furnishings that tenants say were like that when they moved in.

“A good quality inventory with clear photographs - agreed, signed and dated by both landlord and tenant – can overcome all argument about the condition of a property and its contents,” says Greg who runs the Belvoir office on Winchester Street in Andover “What would otherwise be a matter of opinion becomes a matter of fact.”

“When you consider that, according to current Land Registry data, the average property price in Britain is now £225,000, it makes a lot of sense for landlords to protect their assets with a quality inventory. Professional lettings agents such as Belvoir are very experienced in carrying out a thorough and detailed inventory report – providing a solid assurance to landlords that their interests are well protected.”

There are other basic ways of making sure that relationships run smoothly.

When a tenancy starts, the landlord and tenant should each keep jointly signed tenancy agreements that set out terms, conditions, obligations and responsibilities on both sides. If a property in not fully managed and the landlord does not have an agent, they should both be present to go through the property, discuss any concerns and agree the inventory.

Tenants should also meet up with landlords or their agents for any periodic inspections during the tenancy – at least two or three times a year to ensure there are not any serious problems with the property.

Landlords should keep relevant invoices, bills, work records and household receipts as evidence of expenditure, whilst tenants should keep copies of household bills, since they should not be arranging for any works or alterations to a rented property without first consulting the landlord or agent.

And when the tenancy is over both parties should be present at the ‘check-out’ to discuss any problems and reach agreement over any deductions from the deposit.

“Accidents happen but so does normal wear and tear,” adds Greg “If both landlords and tenants stay realistic then many quarrels can be settled before there’s any need for the dispute resolution process.

“In fact there is another key factor in all this – it’s called ‘communication’. Done properly, it can save an awful lot of trouble.”

RENTAL YIELDS ARE AN EFFECTIVE PROFITABILITY BAROMETER

New investors to the buoyant, residential buy-to-let sector enter for one of two reasons. Either they’re investing for small rental returns in an area with large capital growth or they’re investing in an area and property known to produce a high income. Either way, 'rental yields' are crucial to measuring their success and need to be fully understood and properly calculated.

They come in two forms – gross and net – and whilst neither are 100% accurate, they are the most useful barometer a landlord can have.

Phil Pinkney of leading UK lettings specialist Belvoir, which has an office on Winchester Street in Andover says: “Newcomers to the buy-to-let market must be prepared to look in detail at the expected 'yield' from a property and have realistic expectations for the return on their investment."

“Whilst we acknowledge that some property purchases will always be made by the heart, it is essential to be ruled by your head. Quick and easy rental yield calculations will provide just that and at Belvoir, our staff are always happy to advise landlords on how to formulate them,” he added.

Belvoir has a structured investment advice plan which it presents to all prospective landlords and offers the following public explanation of rental yields:

Gross Rental Yield:

What is it? In short it’s the expected annual rental income of a property expressed as a percentage of the total property value.

Why is it useful? Whilst not being wholly accurate in terms of what you receive, it is easy to formulate before purchase, provides a good yardstick for comparison and increases the likelihood of a successful venture.

How is it calculated? In four simple steps.

1. Establish the probable monthly rent – this can be done by looking at similar properties in the area. If you’re unsure, ask at your local Belvoir office or visit www.belvoirlettings.com

2. Establish probable yearly rent – Very easy, just multiply the monthly rent by 12

3. Divide the yearly rent figure by the sale price of the house

4. Multiply by 100 to get a percentage. This is your gross rental yield.

What do I do now? Once you’ve calculated the gross rental yield for a property look at how its yield compares with other properties in the area, the area average and the national average.

“We advise all landlords to conduct gross rental yield calculations on a number of properties before making a purchase. The first property you see may have been the one that tempted you into the sector but it may not always be the best investment. Buy-to-let can be very profitable but only if treated like any other business opportunity,” added Phil.

Net rental Yield:  

What is it? In short it is a post-purchase calculation of the total rent received minus the expenses the property incurs expressed as a percentage of the total property value.

Why is it useful? If the figures for expenses are correct this is a very easy way to monitor the profitability of your purchase.

How is it calculated? In seven simple steps

1. Establish the monthly rental amount – this should be listed in the tenancy agreement.

2. Multiply by 12 to establish a yearly income.

3. Subtract the percentage of the year that the property is unoccupied – if applicable

4. Add together the yearly outgoing costs - insurance premiums, replacement of fixtures and fittings, periodical property redecoration, maintenance, ground rent if the property is leasehold and the lettings agency fee (for a very competitive fee and service contact Belvoir).

5. Subtract the total outgoings from the yearly income to get your net income

6. Divide your net income by the total property value.

7. Multiply by 100 to get a percentage – this is your net rental yield.

What do I do now? Once you’ve calculated your net rental yield you need to compare it with the initial target you set. If it’s higher, you need to analyse why in order to be confident the trend will continue. If it’s lower, the root cause needs to be identified. If you cannot reconcile them, you should seek expert advice to help resolve the issue.

“A landlord is more likely to be successful if they adopt a professional approach. At Belvoir, we recommend all our landlords conduct regular rental yield calculations and store their results on an excel spreadsheet for year on year analysis. It is good practice and something we are happy to help with and advise on,” added Phil

“In this current economic climate, buy-to-let investors have the potential to achieve much higher returns than by putting their funds into a traditional bank account with very low interest rates.

“At Belvoir we always strive to achieve the best return for our landlords and we can offer friendly and expert advice on how to maximise yields,” he added.

If you’re a prospective landlord keen to know more about rental yield information or any other aspect of buy-to-let investment, then please call Belvoir on 01264 366611 or email andover@belvoirlettings.com. One of our team will be happy to assist you.

BUY TO LET INVESTMENT – AS EASY AS ABC!

There has never been a better time for investors to take full advantage of the resurgent and profitable Buy-to-Let property market.

And to help novice investors with their first step on the rung of the property ladder, leading lettings specialist, Belvoir Andover has produced its own “ABC‟ on the language of Buy-to-Let, with tips and advice on how to get started.

The current market remains buoyant, helped by George Osborne's April budget announcing wide scale changes to Stamp Duty Land Tax and the abolition of the 5% tax rate for multiple property purchases over £1m.

Independent financial research by Datamonitor indicates that Buy-to-Let mortgages will flourish more than any mortgage in the next three to four years.

To help new investors make the right decisions about their property purchase, Belvoir offers free, initial advice and guidance to anyone wanting to understand more about what and where to buy in their area, the risks and rewards of Buy-to-Let and the “mechanics‟ of property letting, such as referencing tenants, letting the property legally, on-going maintenance and protection of the property.

The four key stages for any investor are:

• Buying the investment property
• Preparing the property to let legally and for maximum rent
• Letting the property
• Cashing in on the investment, by selling or taking income

“A knowledgeable Buy-to-Let investor is more likely to be successful financially,” said Greg Greatbatch the co-owner of Belvoir Andover. “In line with other types of investment such as cash, bonds and share ventures, people interested in Buy-to-Let are generally a lot more savvy now than they were ten years ago. But the market has changed and investors need to understand fully what they are entering into and what they can expect to get out of it.”

To that end Belvoir Andover has compiled the following A-Z glossary to help future Buy-to-Let investors understand the key phrases and issues they need to be well briefed in.

Assured Shorthold Tenancy Agreement – A contract between the landlord and the tenant which provides limited security of tenure to the tenant and an absolute right for the owner to take possession.

Below Market Value – In theory this is buying a property at a price lower than it would sell on the open market. In reality a property is worth what someone can afford to pay for it at the time of sale.

Capital Growth – The rate at which the value of a property increases over a period of time. (According to Nationwide this is around 3 per cent net of inflation annually.)

Deposit – A sum of money paid by the purchaser towards property purchase. Currently averaging at around 25% for new buy-to-let mortgages (Council of Mortgage Lending).

Equity – The current market value of the property less outstanding mortgage.

Fire Safety – An essential consideration for any Buy- to-Let landlord. Definitive guidance on a landlord‟s responsibilities is provided by the Local Government body, LACORS (www.housing@lacors.gov.uk).

Gearing – Describes overall equity levels within a property portfolio and indicates the debt level against its value. If gearing is high there is very little equity in the overall portfolio. If gearing is more than 75% a Buy-to-Let investor may find it difficult to re-mortgage.

Housing Act – Lays out current legislation and standards for housing conditions and the assessment of hazards.

Inventories – Carried out at the start and end of a tenancy, they not only list all fixtures, fittings and furnishings, but also record (photographically) the condition - and any subsequent damage to - each item. Important in disputes.

Joint Application – Proposal for shared ownership of a property by two or more people who subsequently take joint responsibility for repayment.

KFI (Key Fact Illustration) – Explains all terms, conditions and features of the mortgage - cost of the mortgage, monthly payments amounts, interest rates, penalties etc.

Licenced House in Multiple Occupation (HMO) – Landlords with properties let to five tenants or more, who are unrelated and not from the same direct family, and who share facilities such as toilet bathroom and kitchen need to check with their local authority about an HMO licence, since there is a variance in the definition of an HMO by different authorities.

Monthly Repayment – Set money paid each month to the lender for the outstanding loan balance.

Net Rental Yield – This is a post-purchase calculation of the total rent received minus the expenses the property incurs, expressed as a percentage of the property‟s value.

Outgoings – Current outstanding debts such as mortgage, insurance, maintenance fees etc.

PAT Safety Testing – The Electrical Equipment (Safety) Regulations 1994 requires that all mains electrical equipment (cookers, washing machines, kettles etc.) supplied in rented accommodation must be safe. Landlords should have all equipment checked at the start and end of each let and obtain and retain test reports.

Qualified Mortgage Broker – Qualified to provide expert advice on the mortgage products available to a landlord. Some are independent whilst some are tied to a financial institution.

Rent arrears – Payments received after the date due or after the services have been provided.

Stamp Duty Land Tax – Payable when land/property is purchased for more than a set price.

Tenancy deposit schemes – Since 2007 all deposits taken by a landlord must be safeguarded by one of three Government approved schemes. Landlords are free to choose which one they use.

Utility bills – Landlords must provide the essential services of gas, electricity and water, but tenants are responsible for the fuel and water they use. These utility bills can be paid by the tenant, or the cost included in the rent. Care must be taken by landlords not to be left with unpaid bills.

Voids – Any time during which a property is not let out to tenants and not producing rental income.

Wealth management – A service offered by a qualified financial advisor that helps landlords look after all their personal finances, including existing income streams, assets, insurances and finances related to your property portfolio and overall tax implications.

X-Ray Examination – When a landlord assesses all operating costs before making a decision.

Yield – Yield is the rate of return on your Buy-to-Let investment and is calculated by taking the gross or net income and dividing it by the value of the property.

Zero mortgage balance – Investors looking to maximise income should aim to fully repay the mortgage as soon as possible to achieve maximum returns.

Having predicted growth in the market throughout 2011 and into 2012, Belvoir is expecting a major influx in landlords over coming months and looks forward to preparing them for long term investment and reward.

“Buy-to-Let is and always has been, a highly profitable market for well organised, well informed landlords. We predict that in this next period of growth, responsible lending, borrowing and property management will combine to make it one of the safest and most viable investment options in the UK today,” added Greg.