Pavilion Relocation Ltd, 80-83 Long Lane, London EC1A 9ET

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Tag: Finding homes in London

House boards To Let- Tenant Fees

A ban on Tenant Fees is expected to be introduced in the Spring of 2019, but this doesn’t mean that the cost of renting will come down. Lettings agencies are looking at ways to make up for the lost income, and some of the plans could leave renters and landlords worse off.

What is the tenant fee ban?
The government announced plans to ban tenant fees in 2016 and introduced the Tenant Fees Bill. It is now going through parliament. Renters pay an average £223 in fees for each tenancy, according to the English Housing Survey. Yet lobby groups, such as Shelter and Which?, say that some agencies are charging up to £500 to carry out referencing or £200 to draw up a contract. These charges will be prohibited and tenancy deposits will be capped at six weeks once the ban is introduced.

ARLA Propertymark, a trade body, says that the ban could be detrimental to tenants and the wider economy because the loss of income from fees will result in job losses at estate agencies and extra charges for landlords, who could raise rents.

Increased costs for landlords.

As Adam Walker pointed out last month in The Negotiator many let-only businesses seem destined to fail, as when they started up they did not want the extra hassle of managing properties and therefore encouraged landlords to instruct on a let-only basis.  As they could not make profits from their landlords alone they introduced charging extortionate fees to tenants. In contrast the long established managed letting agencies with a better service charged higher fees to Landlords for managing the properties. However the fees for the tenants in both scenarios are on average the same amount. Therefore with the tenant fee ban managed businesses are likely to pass on the extra percentage that they charge the tenants on to the landlords who in turn will charge higher rents to cover this. The let only agencies will only receive the fees charged to the landlord and are therefore likely to lose out. Indeed Adam Walker commented this month that let only businesses may face liquidation leaving landlords facing huge losses as these agencies will run up a client account deficit half from the landlords, half from the tenants. A change to their business model to recover these fees, say by offering rent guarantee insurance, from Landlords is likely to mean landlords charging higher rents.

Currently both types of  agencies charge tenants for referencing and writing rental agreements. As mentioned these costs are likely to be passed on to landlords, who are already dealing with extra stamp-duty charges and the scaling back of mortgage interest relief, so it could also harm investment in buy-to-let.

With agencies working for their landlord client only future tenants could find it much harder for these letting agencies to co-operate with them for viewings and referencing etc. Whatever the situation it does not necessarily look good for tenants.

Contact the home finding specialist at Pavilion Relocation for help in looking for rental property on 01892 257001, we can also provide the latest information on Tenant Fees.

Photo of Executive Serviced Apartment living area

Home from home, why not try Executive Serviced Apartments

Executive Serviced Apartments offer a fantastic alternative when you feel “not another anodyne hotel” as you start to think every uninspiring hotel room begins to blend into one. Do you think the enjoyment simply has gone out of staying in a hotel? Have you had enough of the room service menu and the same continental breakfast every morning? Executive Serviced Apartments really understand that staying in a hotel for long periods can be quite restrictive, have a lack of flexibility, privacy and the space you usually enjoy at home. We know!! – we stayed as guests at the new Imperial Court in Maidenhead last week when Executive Serviced Apartments launched this new eight serviced apartment complex which is walking distance from the station.

While a hotel may provide all the facilities you need for a few nights, if you’re staying for longer, you might prefer somewhere that feels more like a second home. We feel these spacious serviced apartments provided by Executive Serviced Apartments are the perfect hotel alternative and offer a welcoming home from home environment from the moment you arrive.

Ideal for when you are relocating and getting to know the area, the benefits of staying in serviced apartments are many fold and with Executive Serviced Apartments these are:
• stylishly furnished apartments with a spacious living environment with all the usual home comforts
• excellent connectivity with broadband internet for working in the apartment
• central locations with easy access to local amenities, business parks and transport links
• fully equipped kitchen facilities so you can prepare your own meals
• dining facilities to entertain friends and colleagues in private surrounding
• personalised guest service with a 24 hour on call emergency support.

In comparison to hotels, serviced accommodation typically offers savings up to 30%, making it a cost effective solution for businesses. Depending on the number of guests, the room configuration and the length of stay, the savings can be even greater.

For more information on serviced apartments in general and the range Executive Serviced Apartments offer contact Anji or Amanda on 01892 257001

Photo of investment property

Recently we have had some demand to provide a basic guide to investment property and for those not in the know the following is a run through of what you should be aware of.

Maybe this is less pressing now for the small landlord due to the recent changes in the tax laws which impact small landlord’s tax planning but we thought we would set out a simple guide to calculate potential returns on property investment. As we are not financial advisors we suggest you also seek financial planning if you do want to investigate buying an investment property. What we are doing here is setting out in simple terms what you need to be aware of.

There are two main factors: –

1. The income i.e. rent
2. The capital appreciation resulting from the potential rise in a property’s price.

An investors total returns are the sum of both.

Calculating the Rental Yield and your Return on Investment

It is also important to calculate the annual rental yield as it will be an indication of the level of the return on your investment (“ROI”). This is not the rental amount at all. Knowing the yield as it is like knowing what the Annual Percentage Rate (APR) is for a savings account – you wouldn’t put your money in a savings account without knowing the APR so it is just as important to work out the rental yield. This is calculated by measuring the annual rent as a percentage of the underlying capital value of the buy-to-let investment. Therefore, if a property was valued at £100,000, and generates an annual rent of £6500 the gross rental yield would be 6.5%. This gross rental yield is a useful starting point in calculating your potential returns and helps give a landlord a quick and easy way in which to measure it against alternative property investments.

As we all know any landlord will tell you that, unfortunately, they don’t get to keep all the rent therefore the gross rental yield can be a bit of an exaggeration. The more accurate figure of the true cash return from the rental property is given by its net rental yield.

What returns mean

  1. Firstly, the rent. The net rental yield takes away the associated costs of generating the rental income. This might include any management charges, such as: letting agent fees, ground rent, service charges, repair costs and insurance charges. Other outlays may also come into play such as the mortgage (important to note that this is the interest only portion – which is deducted and may have further personal tax implications), decoration, gardening, and cleaning.
  2. Secondly, the capital gain. Although this will not normally form part of the landlords yield calculations on a day-to-day basis, over the long term can be an important element in the overall return. Typically, we know most landlords will hold their residential investment property for approximately 15-20 years according to Property Hawk and the ongoing surveys from the Association of Residential Letting Agents (ARLA). Over this type of period capital returns can be very important.
Setting up costs
Setting up costs include the initial costs involved in the purchase of the investment property such as the legal fees and stamp duty. Other capital costs might be any development/ refurbishment costs required. Finally, there is the cost of exiting the investment, i.e. selling the property. All these need to be factored into the overall calculation of a property investors returns
You also need to be aware that rent and other costs are likely to change over the investment period which will also need to be factored into the calculation of a landlord’s property investment returns. Rents can go down as well as up and void periods will also influence the ROI.
Contact us
As mentioned above this is a simple guide of factors that you should consider if looking for an investment property.  We would recommend you seek financial assistance if you are new to this type of investment. We have had a number of searches for investment property so please call Anji on 07748 682818 or Amanda 07948 3015921 if you wish us to help you look for an investment property search.
Flags flying in front of the Rockefeller Centre in New York.
View of London with the Shard dominating the scene.
The Shard, London

New York, New York, USA to London, Kentish Town, England – finding homes in London

We love our job and the best part is finding homes in London or the South East for our clients. Having carried out the initial research, pre-viewed the properties and then fine honed the search we find the most rewarding part of the search is meeting and then spending the day with our clients viewing the selected properties. It is the idea that we are going on a new exciting journey with each and every client that, fortunately for us, does invariably have a fairy tale ending which is finding them the home of their dreams.

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