5 value-adding ideas to help achieve your asking price

While it’s universally accepted that, in many circumstances, the price we pay is the price we see – in supermarkets and restaurants for example – there are a couple of instances where a little haggling is to be expected.

Buying a property is one of them. After all, estate agencies are staffed with skilled negotiators and the clue is in the name. Even in the strongest selling market, buyers may offer a figure below the asking price, hoping the seller will say yes in order to secure a sale.

As a guide, we traditionally see buyers offering up to around 5% less than the asking price on their first bid. The longer a property is on the market, the more likely an offer will be 10% under what the property is marketed for. There’s even such a thing as a ‘lowball’ offer – a figure that’s 25% or more below the asking price, but this is highly unusual.

As experienced agents, we understand your need to achieve as close to the asking price as possible but what happens if you come across a buyer who drives a hard bargain? A keen purchaser who repeatedly submits low offers shouldn’t always be dismissed.

They may be an excellent prospect in terms of their circumstances – perhaps a cash buyer, someone with no chain behind them or a purchaser who can offer a quick exchange – and we’re here to help you weigh up a person’s situation versus their offer.

If low offers persist but you are worried you may lose the interest of potential purchasers, there are ways to keep buyers engaged without budging on your asking price. It all comes down to adding extra value.

Here are 5 value-adding ideas to explore:

  1. Sell with planning permission already granted: the cost of submitting a full planning permission application for alterations/extensions to a single dwelling house or a flat is £206 but it could add as much as 10% to your home’s value.
  2. Leave behind high-value items, such as white goods: fridge freezers, ovens and even furniture can all be used as bartering tools. If this approach appeals to your buyer, ensure negotiations are conducted through the solicitors using the TA10 contents and fixtures form.
  3. Be flexible with the completion date: value can’t always be measured in monetary terms, so being in a position to exchange and complete at speed will be an advantageous trade-off tool among buyers who are in a hurry.
  4. Offering to rectify flaws found in the survey: one of the most common reasons for a low offer is unfavourable survey results. Offering to pay for issues such as damp is a cost but it could allow you to stick to your asking price – a critical point when funding an onward purchase.
  5. Throw in extras: there’s definitely something in the concept of buying a lifestyle so if your purchaser has fallen in love with your home, they may be persuaded to up their asking price if you include accessories such as lamp shades, curtains and rugs.

If you are hoping to come to market this spring, why not start with one of our free valuations? We will suggest an achievable asking price and advise on ways that you can add value to your home. Contact us to get started.

Taxing matters for landlords in 2022

‘Tax doesn’t have to be taxing’ is a favourite slogan of HM Revenue & Customs and it’s true! For many people, paying tax and working out VAT is an aspect of our daily lives that someone else works out on our behalf.

If you’re a landlord or property developer, however, you are classified as a business owner who is responsible for their own tax bill and possibly VAT too. While a good accountant is vital when it comes to filing returns and reducing bills, understanding the relationship between tax, VAT and property before you invest and during a tenancy is key to healthy yields and profits.

This year will see landlords settle into a new tax and VAT pattern, and while we can’t predict what the Chancellor may introduce later in 2022, here are 6 things we do know:

Mortgage interest tax relief changes are in full effect
The tapering of mortgage interest tax relief is complete and from now on, landlords filling in their self-assessment tax return will only be able to offset 20% of their mortgage interest payments against their tax bill.

There’s more time to report & pay CGT
When a landlord sells a buy-to-let property, there is usually CGT (Capital Gains Tax) to pay. This year has already heralded a positive change to how landlords report profits gained from selling additional properties and how long they have to pay the CGT bill. The timeframe has been extended to 60 days, up from the previous 30.

The tax liability notification period may shorten
The Government is keen to boost its coffers and it is consulting on an Income Tax Self-Assessment reform, which would prompt landlords to pay taxes due more quickly. At present, landlords have six months to notify HMRC of a tax liability if they’re making money from additional properties but this timeframe may be reduced to something much shorter, possibly one month.

Stamp duty may rise for mixed-tenure purchases
Property investors with one eye on the High Street should plan for a possible SDLT (Stamp Duty Land Tax) hike. The Government wants to change how mixed-tenure purchases – such as a ground floor retail unit with a residential flat above, sold as one transaction – are taxed. Currently, purchasers pay lower commercial rates of SDLT on the entire purchase but the proposed change would see the residential part taxed at the higher residential rate.

5% VAT for developer landlords is available
Landlords who engage in development and conversion work before they let out a property still have access to more flattering rates of VAT. Building work to change a commercial premises into a residential buy-to-let home may attract 5% VAT, while developing student accommodation could see VAT reduced to zero in some cases.

Reduced VAT rates for providers of holiday accommodation ends soon
One of the Government’s pandemic rescue packages saw suppliers of holiday accommodation – including short Airbnb lets – pay a reduced rate of VAT but this benefit ends on 31st March 2022. As of 1st April 2022, the VAT rate will rise from 12.5% to the pre-pandemic standard rate of 20%.

Still find tax taxing?
As buy-to-let and property specialists, we can advise on all matters of lettings, including tax and VAT. Get in touch and we can help you find financial efficiencies and run profitable property investment portfolios.

Don’t forget your toothbrush holder: the TA10 form explained

There are a multitude of acronyms and abbreviations to get your head around when buying or selling a property. Something you may see in your pile of paperwork are forms with the letters TA at the start.

The TA stands for transaction and these letters come in the form of templates drafted by The Law Society. They are sent out by conveyancing solicitors and estate agents to those involved in the moving process, and one form that every seller will be asked to complete is a TA10.

More commonly known as a ‘fittings and fixtures’ or ‘fittings and contents’ form, a TA10 is completed by the seller so they can clearly identify what’s included in the sale and what is going to be removed.

A TA10 form is largely a tick-box exercise. Once you have filled in details about yourself, your solicitor and your property’s location, the most common fittings are presented as a list with boxes by their side. The seller simply ticks ‘included’ if it’s being left at the property, ‘excluded’ if it’s being taken with them and ‘none’ if the item listed is not relevant to their property.

It’s completely natural to think of fittings and contents as items such as integrated storage, kitchen appliances and built-in furniture. When it comes to a TA10 form, however, even the smallest and sometimes most unconventional of details needs consideration. Be prepared to weigh up whether you’re going to leave your toothbrush holder, loft insulation, dustbins and even your doorbell. Yes, these are all listed on The Law Society’s TA10 template form.

The latter item – the humble doorbell – is actually part of a wider conversation within conveyancing. The Law Society is currently holding a consultation with solicitors on the matter of smart products and connected appliances – items that are increasingly being fitted to homes. These can include smart doorbells, wifi-enabled CCTV and app-controlled central heating systems.

The current TA10 template doesn’t have a smart device section and this may not appear until after The Law Society’s consultation ends on 28th February 2022. Until changes are made, sellers should use the ‘other items’ section at the end of the TA10 form to list any smart devices, being clear on what’s being taken and what is being left. If it’s the latter, the seller should detail how the new occupant can access the service and take over any subscriptions.

There are also boxes for ‘price’ and ‘comments’ against each item on the TA10 form. It is here where a seller can let the buyer know what items are for sale, for how much and if there are any related notes.

Negotiations to purchase items are usually conducted between the buyer and seller directly, or we can mediate, if that’s preferred. It is sometimes possible for the solicitors to negotiate the sale of any items but there may be an additional charge for this service. If a price is agreed and an item is to be bought, both solicitors need informing.

As with all paperwork relating to a property sale or purchase, speed is of the essence if you want to complete without delays. If you are a seller, fill out and return your TA10 form to your solicitor promptly. If you are the buyer, ensure you read through the form upon receipt, flagging up any questions and requests to purchase as soon as you can. We’re here to offer guidance, so get in touch with any TA10 form questions.

A guide to council tax & property bands

The way we buy and sell homes is forever changing but some things stay the same. The property ‘bands’ that were set more than 30 years ago in 1991 are still used when calculating today’s council tax charges. Expressed as a letter, with A being the least valuable property and H being the most expensive, these bands dictate how much council tax a household should pay.

If you are curious about your property’s band, want to know if it can be changed or whether the bands will alter in the future, read on for our guide to council tax and property bands.

Today’s bands
Let’s start with a little background. Each local authority is free to set their own council tax but they do, in fact, all work to the same set of property bands, as follows:-

A: up to £40,000
B: £40,001 to £52,000
C: £52,001 to £68,000
D: £68,001 to £88,000
E: £88,001 to £120,000
F: £120,001 to £160,000
G: £160,001 to £320,000
H: more than £320,000

When you move into a property, whether owned or rented, it usually falls to the occupant to pay the council tax bill. The money collected by the local authority pays for vital services, such as refuse and rubbish collection, street lighting, emergency services and community assets, such as libraries.

You could be in the wrong band
The job of valuing properties before the council tax’s launch in 1991 was very rushed. In some cases, those responsible for providing the figures simply drove past rows of houses, assigning each property the same band without detailed examination.

The financial commentator, Martin Lewis, estimates that thousands of homes were incorrectly banded and it is possible for occupiers to challenge the band they were given. This process is managed by the Government’s Valuation Office Agency and it can present a successful way of re-banding your property and reducing your council tax bill.

If you are thinking of asking for a band reassessment, be aware of the pitfalls. Quite simply, the Valuation Office Agency may think you aren’t paying enough council tax and your new banding may make your council tax bill more expensive. Alternatively, your band may remain the same.

A new garden room may have an impact
If the recent ‘race for space’ and a greater appreciation of your garden prompted you to add an annexe or a fully habitable outdoor room, this may be taken into account when a band is recalculated.

If the Valuation Office Agency deem your outdoor room to have been ‘constructed or adapted for use as separate living accommodation,’ they are obliged to give it its own property band and, therefore, its own annual bill. It’s worth noting that the use of an annexe or garden room is not taken into account. Instead, an assessor will look at its physical features, such as provisions for cooking, sleeping and washing.

The good news is the ‘Granny Annexe Tax’ was abolished in 2014. This spelt the end for two full-price separate council tax bills – one for the main residence and one for the annexe. Now, at the discretion of the local authority, it’s more likely that a 50% reduction in council tax is applied to the annexe.

There’s no plan to reassess every property
With bands that were generated three decades ago – and a property market where values have soared in that time – there has been speculation that the Government would force a mass reassessment of property bands.

As of January 2022, there is no evidence to suggest such a move is scheduled. With an estimated 23 million domestic dwellings in England, any plan to revalue and re-band properties would take years in the planning and would require huge resources. For now, the current bands look set to stay, unless challenged by the property owner.

If you would like more detailed information on property bands and whether you qualify for a council tax discount, visit the Government’s dedicated webpage. If you would like to know the band and council tax bill for a property we are marketing, please get in touch.

Levelling up for landlords: your questions answered

Levelling Up the United Kingdom is a new White Paper released by the Government. It’s aim is to bring better opportunities to all, no matter where people live in the UK, and one of the areas it wants to reform is housing.

The White Paper will have an effect on how lettings operates and the standard of rented homes available, so landlords do need to pay attention. In this blog, we answer the most commonly asked questions about Levelling up The UK.

Q. Is the Levelling Up White Paper the same as the Renters’ Reform Bill?
Despite there being some crossover in content, these are two separate entities. The Levelling Up the United Kingdom White Paper does mention many aspects that pertain to lettings but the text also refers to a ‘landmark’ White Paper to be published in spring 2022. This is another document that acts as a prelude to the Renters’ Reform Bill, and it may contain additional changes specifically related to lettings.

Q. What’s happening about evictions?
Talk of banning Section 21 ‘no fault’ evictions has been swirling around the lettings industry for almost two years and the Levelling Up White Paper confirms that this is still the Government’s intention. It is hoped a brand new Section notice will be introduced or an amendment will be made to the existing Section 8 notice in order to protect landlords looking to regain their properties.

Q. Will I have to make improvements to my buy-to-let property?
The Government has announced that it is to consult on a new legally binding Decent Homes Standard in the PRS (private rented sector). Although there are no details of what constitutes ‘decent’, there is already a Government document called A Decent Home for social landlords. Any new Decent Homes Standards for the PRS could be influenced by this. Landlords should expect, by law, to make the upgrades and improvements required to bring their properties up to a new minimum standard for habitation.

Q. What’s being done to stop rogue landlords?
The Government would like to drive bad landlords out of the sector and one way of doing this is to introduce a National Landlord Register. Although there is already a database of rogue landlords, it is only available for use by local authority enforcement professionals. It is thought a National Landlord Register would be open to the public, allowing tenants to identify landlords to avoid.

Q. Will it become easier to buy and sell rented properties?
The Levelling Up White Paper acknowledges that the buying process could be improved. It wants to ensure ‘critical information buyers need to know is available digitally wherever possible from trusted and authenticated sources’. This may pave the way for less paperwork and more online communication, as well as improved central sources of digital information and pre-prepared property details.

Q. When are all the changes coming into effect?
As of 3rd February 2022, no fixed dates for these changes were given. As an illustration, the Renters’ Reform Bill was put forward in 2019 but nothing has been adopted by law or ratified yet. It may take months – years even – to see the full effect of the proposals and in the case of the National Landlord Register, this is a reform that the Government is merely consulting on. We will update landlords after the spring White Paper has been published.

Although it isn’t exactly light reading, you can read the full Levelling Up the United Kingdom White Paper on the Government’s website (there’s also an executive summary for those short on time).

If you think any of the proposed changes will affect your buy-to-let or investment portfolio, get in touch for advice and guidance.

How to tell if your next home will be warm

The topic of staying warm at home has never been more pertinent. In the face of a cold winter and rising fuel prices, Ovo Energy – Britain’s third-biggest energy supplier – sent an email to its customers in January, containing ideas on how to stay warm.

Ovo’s advice was ridiculed in the press. The firm’s ‘simple and cost effective’ tips included cuddling your pets and loved ones to stay cosy, eating ‘hearty’ bowls of porridge and consuming ginger (but not chilli as that makes you sweat) and doing a few star jumps.

While the pointers were well-meaning, they aren’t very practical on a long-term basis. A better solution is to ensure your next property is as energy efficient as possible, allowing you to enjoy a warm home without resorting to a daily diet of Quaker oats.

EPC ratings are your best friend

If you are moving home soon and want to know if the property will retain heat, there are a few things you can look out for. The first is the EPC rating – which shows how energy efficient the property is. All dwellings, whether to rent or for sale, will be listed with an EPC rating – look out for the coloured bar graph on our property details.

Properties are given a letter to show how energy efficient they are – an A rating is the best and G is the lowest. Although properties for sale can have any EPC rating to be sold, landlords can only rent out properties that have an EPC rating of E or above.

If a property’s current EPC is more than 10 years old – or if the home doesn’t have an EPC at all – an energy assessor will visit and look at certain aspects to decide how good its energy performance is. The heating system makes up the largest part of the EPC calculation, so a high rating is a good indicator that the property will be warm. Also taken into consideration by the assessor are windows, loft insulation and the external structure – all of which have an impact on how well heat is retained and cold air kept out.

Ask to see energy bills

While an EPC certificate will provide a guide to a home’s ability to generate heat and stay warm, seeing energy bills or smart meter readings from winter months will give you an idea of how heavily the current occupants rely on gas and electricity.

Energy bills are good for guidance but ensure you know if the property is heated using a gas-fired boiler or by electric storage heaters when interpreting the figures. In addition, bear in mind other energy usages outside of heating a home – lighting, powering electrical goods and cooking on a gas stove, for instance.

Be vigilant on viewings

If you are looking around a property between the months of November and March, there’s a good chance the heating system will be fired up when you arrive. Check the warmth coming from radiators and ask to see the boiler, noting the make and model. Don’t forget to ask about alternative sources of warmth, such as underfloor heating, electric towel rails, wood burning stoves, open fires and gas fireplaces.

If you would like more information on EPC ratings and what to look out for when moving home, please contact us today.

Purple reign! 6 ways to use Very Peri

After last year’s dual grey/yellow combination, the colour masters at Pantone have reverted to a single shade for 2022’s Colour of the Year. Introducing Very Peri – an uplifting shade of purple that was created especially for the year ahead.

Unlike other shades of purple, which are either classified as warm or cool, Very Peri is a mix of colder blues and violet reds, which makes it an easier shade to work with. That said, we appreciate that it may not be a hue you want to paint an entire room.

Using Very Peri as an accent colour is a flexible, low cost and more temporary way of embracing the latest colour trend in your home – especially if you are in rented accommodation and can’t make permanent changes. Here are 6 ideas to try:-

  1. Say it with flowers…and a vase: one of the quickest ways to bring Very Peri into your home is with a bunch of flowers. Choose hyacinths, irises, hydrangeas and lisianthus for a heady mix of purples, or opt for an all-white selection of blooms displayed in this Dartington Crystal Vase in the amethyst colourway, stocked at John Lewis.
  2. Throw in the towels: add colour and a spa-like vibe to your bathroom with a new set of fluffy towels – neatly folded in a stack or placed over a heated towel rail. Marks & Spencer’s cotton rich towels in the colour violet are a great Very Peri match.
  3. Paint it purple: paint isn’t just for walls. Prepare your surface correctly and choose the right paint finish, and you can apply a coat to just about anything – photo frames, bedside cabinets and even terracotta pots. Try Dulux’s off-the-shelf shade Purple Pout, or its mixed-to-order shade Amethyst Showers 1.
  4. Colour up with candles: Very Peri’s likeness to a vibrant shade of lavender makes it easy to find purple-coloured candles. Many examples that are infused with the scent are often coloured purple too – such as these ribbed lavender-scented candles by Bolsius, stocked by Wayfair.
  5. Cast some shade: whether you have a table lamp, ceiling pendant or wall light, a change of shade can completely change a room’s look. Pooky has an amazing choice of shades designed to fit a variety of fittings. Opt for the empire shade in cobalt silk for a fantastic colour match.
  6. Blanket coverage: a blanket or throw is one of the most versatile home accessories you can buy. This super-soft dyed cashmere blanket in violet from Anthropologie will add Very Peri vibes when neatly folded at the end of a bed or draped over the arm of a sofa.

Over the years we have seen many different interior design schemes in our property visits, with varying degrees of success. If you would like to view our current crop of design-led homes – or would prefer your next property to be a project – please contact the team today.

All you need to know about Japanese knotweed

There are a couple of phrases that strike fear into the hearts of property sellers – ‘serious subsidence’ and ‘negative equity’ being two of them. Another phrase you never want to hear is ‘Japanese knotweed’, but is having this invasive plant among your borders really a property death sentence?

Over the course of 2021, it is estimated that £11.8 billion was wiped off the value of UK property due to the presence of Japanese knotweed, with values taking a dip as soon as the plant is identified in a survey report or disclosed by the seller.

This figure, however dramatic it sounds, is a little misleading. Homeowners should be aware that only around 4% of UK properties are affected by Japanese knotweed and even when it is detected, it impacts the value of a property by about 5%. In many cases, a home’s full value is often achieved after an appropriate course of action is taken, despite the plant’s presence.

Even though the plant is found at less than 10% of UK properties, Japanese knotweed isn’t something that can be glossed over when it comes to selling a property. When you have decided to sell, you’ll be asked to fill out a Property Information Form (TA6).

This form requires sellers to give detailed information about the property and the surrounding area. It is a legal requirement to disclose if the property is or has ever been affected by Japanese knotweed, as its presence can create or worsen cracks in mortar and structural joints, as well as push up through paved and concrete areas.

It’s important that the ‘affected’ aspect is understood too, as sellers will need to divulge if they’ve ever had to treat the plant if it spread from a neighbouring property. It’s worth noting that a Japanese knotweed plant can be up to 7 metres away from your boundary and still need disclosing on a TA6 form.

Identifying Japanese knotweed (fallopian japonica) can be troublesome if you have no horticultural experience – it can look similar to other harmless plants but the RHS provides a good point of reference. If you’re in any doubt, it’s wise to revert to a specialist removal company for identification.

There is good news. Selling a property is entirely possible if there is Japanese knotweed. It really isn’t the barrier that some people imagine it can be. The vital aspect is to seek guarantee-backed treatment that mortgage lenders will accept.

It is usually the seller who instructs a specialist Japanese knotweed removal company to excavate and remove the plant’s rhizomes. The plant is rarely eradicated for good through hand weeding or with the use of herbicides as the rhizomes will be buried deep underground.

If a removal company offers an insurance-backed guarantee, lenders (sometimes referred to as knotweed IBG, a Japanese knotweed indemnity or a knotweed insurance-backed warranty), there’s a high chance a mortgage lender will loan against the property.

Don’t forget, the Japanese variety isn’t the only invasive knotweed out there. Dwarf, giant and bohemian are the other top three knotweeds buyers and sellers need to be on guard for. You can visit the Government’s web page dedicated to the prevention, treatment and disposal of knotweed for further details.

If you are planning to sell a property where you suspect a case of Japanese knotweed, or are buying a property where the plant has been disclosed on the TA6 form, please contact us for advice and guidance

Your guide to damp and mould in rented properties

Winter presents the ‘perfect storm’ of conditions that can trigger episodes of damp, mould and condensation. While it can be concerning to see black patches develop or water running down the walls, many issues are easily fixed. Knowing who is responsible for prevention and treatment in rented properties is the essential place to start, as our guide explains. 

Know what damp you’re dealing with

There are three main types of damp and knowing the difference will establish the course of treatment and by whom. Rising damp is when moisture below a building is drawn up through bricks and mortar, and it’s this moisture that encourages mould growth. A lack of a damp course – or a damp course that’s failing – are the most common reasons for rising damp, and this issue needs resolving by the landlord.

The landlord is also responsible for rectifying penetrating damp, which is a result of failing structures, such as broken guttering or a  leaky downpipe. It’s important to note that while a landlord is responsible for repairs involving rising and penetrating damp, tenants should alert their landlord or managing agent if they notice blocked gutters, peeling wallpaper or bubbling paintwork – especially if it’s occurring on the interior surface of an outside wall.

The third type of damp – ambient damp – is the most common and reducing it is a shared responsibility between the tenant and the landlord. Damp and mould are most frequently caused by condensation – warm, moist air that turns into water droplets when it meets colder surfaces. Many everyday actions produce condensation – from taking a shower and drying wet washing inside, to boiling a kettle and even having a conversation.

Prevention and cure

If there is a suspicion of rising or penetrating damp, a specialist company may need to be deployed by the landlord to find the root cause and undertake repairs. Cosmetic redecorating will also be the responsibility of the landlord, unless agreed otherwise.

Condensation is a trickier issue as improving insulation standards in let properties can actually contribute to increased condensation, unless well mitigated, as homes are now more airtight with fewer cracks and gaps where air can naturally escape or enter.

We know asking tenants not to breathe or bathe simply isn’t possible so ventilation is crucial, especially when cooking, showering and drying clothes inside. Windows should be open or kept ajar whenever safely possible to let moist air escape and extractor fans should be installed in rooms susceptible to high humidity – bathrooms, kitchens and utility rooms as a minimum.

On the note of wet washing, this can be a hard aspect to tackle in flats, especially those without balconies or outside drying options. In these cases, a condensing tumble dryer or a dehumidifier is something to consider.

As well as ventilation, a steady, even temperature throughout a property is a useful tool in the fight against condensation. Avoid letting a property get too cold inside by keeping the central heating on low – warm air of around 18° and warm surfaces are what you ideally need to stop condensation forming.

Everyday actions to prevent condensation, damp & mould

Small lifestyle tweaks can make a big difference around the home, so here are eight to encourage:

  1.     Keep lids on saucepans when cooking
  2.     Keep the bathroom door shut when bathing
  3.     Open a window in any room where washing is drying
  4.     Wipe condensation off window sills promptly
  5.     Move furniture away from outside walls to improve air circulation
  6.     Boil only enough water required to cut a kettle’s boiling duration
  7.     Air a property on a regular basis by opening as many windows as safely possible
  8.     Use anti-mould and condensation paint when decorating

If you would like more information about mould and damp in lieu of Section 11 of the Landlord and Tenant Act 1985 and the Homes (Fitness for Human Habitation) Act 2018 in England, please contact us today.

The pros and cons of longer tenancy lengths

Results of the latest English Housing Survey (EHS) have brought the issue of long-length tenancies back into the spotlight. While the idea of making 3-year tenancies mandatory was abandoned by the Government in 2019, following an extensive consultation, the survey results have highlighted how renters are choosing to stay in the same rental property for extended periods.

The EHS found the new average stay in a privately rented property is now 4.3 years – surpassing the three-year benchmark that was widely rejected as a mandatory term. It’s a trend that has been building for a number of years, with the average tenancy length rising from 3.9 years in 2016/17 and 4.1 years in 2017/18.

The findings may prompt more landlords to consider offering longer-term tenancies but there are pros and cons to weigh up when it comes to offering rental agreements of more than 12 months. Here’s our quick-read considerations guide but for tailored advice, please contact our lettings team.

Pros:

  • Void periods are reduced: any void is a drain on finances so reducing the number of times you have to find new tenants – a process that may potentially leave a let empty for a week or two – is a good thing. A long-term tenant also ensures rent is always hitting your bank account every month.
  • You’ll generate a ‘hands off’ investment: long-term tenants are a great option for landlords who like as little involvement in their buy-to-let as possible. There’s less worry about renewing tenancies, finding new renters, check ins, inventories and check out, plus landlords who opt for a fully managed package can really sit back and enjoy the rewards.
  • Tenants will reward you with respect: tenants who feel secure in their rental generally feel more positive about the experience. They will be keen to create a home they can settle in, and anecdotal evidence suggests they look after the property better and forge good relationships with the landlord or property manager.

Cons: 

  • Regaining possession may be harder: currently, landlords can serve a Section 21 ‘no fault’ eviction notice after a fixed term tenancy ends. If the agreement is only for 6 or 12 months, regaining possession doesn’t pose too much of a problem. If the agreement length is two or three years, landlords may have to wait an untenable amount of time. One workaround is to insert a break clause into long-term agreements – something we can organise on behalf of landlords.
  • You’ll have to trust your tenants: when the same people live in your let for 2 or 3 years, you’ll have to trust that they’ll take care of the property and pay the rent on time, especially if the eviction process will favour the tenants more in the near future. Referencing carried out by a letting agent is the best line of defence. It will uncover an applicant’s past renting behaviour and reveal their financial situation, allowing the most trustworthy tenants to be chosen.
  • Rent reviews will need careful planning: it’s a wide-held but unwritten rule that landlords reward long-term tenants with fair rents that aren’t hiked up overnight. If you’re used to raising the rent every time new tenants sign up – perhaps as often as every 6 months – you’ll need to plan a rent rise strategy before you move in long-term tenants. Always consult with a letting agent and consider writing any plans into the tenancy agreement.

Speak to us about setting the right tenancy agreement length for your property, your target tenant and the current lettings market. We will create the perfect tenancy agreement that factors in break clauses, rent rises and notice periods.