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The importance of landlords knowing their local regulations

landlord services north west

Recently a couple was fined £8,000 for failing to comply with multiple occupancy regulations in Kent, and while their example is an extreme one, it serves as a useful insight into the importance of knowing the law with regards to HMO properties and investments.

The Azads were found guilty by Bexley Council of housing 17 people in a bungalow that could legally only bed eight individuals.

Now, that isn’t to say any reasonable person thinking of entering the HMO market would flagrantly disregard the regulations and common decency, but it does show that local authorities will go after people who break them.

Regulations are tougher on multiple occupancy homes compared to single or family rents, on top of the usual regulations there are strict rules on everything from the number of toilets in the house to the extra safety precautions required.

For example, if there are five or more occupiers, then there needs to be more than one toilet in the property by law, this number increases as the number of people in the property increases.

There are similar regulations around access to kitchen appliances like cookers, fridges, and freezers. Even more seriously, there are extra rules for HMOs to ensure the safety of all of the occupants, most of these are related to the proper installation of fire escapes and fire doors, but they all need to be met.

On top of all of that, each local authority legislates its own refuse collection policy, and all will have different requirements for the proper disposal of rubbish from multiple occupancy homes. Some councils will say an HMO with five people must have a larger bin, whereas others may say a property can have an extra bin with six or more people. All of these extra bins need to have a place to be stored safely. It gets even more complicated when you start to consider recycling.

One of the fines Bexley Council handed down to the Azads was because their property had collected too much rubbish and they had no way of properly disposing of the waste produced by that many people.

Investing in an HMO can offer lucrative returns when done properly, but failure to meet all of the extra legislation can result in costly consequences.

Mistoria is an expert in all matters regarding HMO regulation and can assist anyone who is thinking of making an investment in the market. Please contact our team for assistance with your properties or for advice on any landlord services North West including Salford, Liverpool and Bolton are all areas we are very familiar with.

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Investment in UK student property boosted by Indian Government legislation

Investment in Student Property.

The recent legislation by the Indian government which raised the allowance for inInvestment in Student Property.vestment in real estate outside the country by up to the equivalent of 125000 US per person, per financial year, is boosting demand for student property in the UK, according to The Mistoria Group – leading student property investment specialists.

The yields in India for residential rental property has been historically low at around 1-2%, but appreciation is high, between 10-30 % per annum.  Over the last 3-4 years, property prices have corrected, but rentals have not improved.  Hence, Indian investors are more keen to look overseas.

Investing in UK student property offers investors a long-term investment option, as typical rents are significantly higher than a comparable buy-to-let property in the same city.

The average gross cash rental yields for the student property sector in the North West of England were 13% for the first three quarters of 2014, well ahead of the 6.37% forecast for average student property yields across the UK, for this year.

Mish Liyanage, Managing Director of The Mistoria Group explains: “We have experienced an increase in demand from Indian Investors over the last few months, all of whom are looking for investment in student property.

“Since 2011, investment in student property has outperformed all other traditional property assets and has been the strongest growing investment property market in the UK.

“It has also continued to be one of the most resilient investment sectors, with rental incomes and property values remaining stable, or increasing.  The attraction of the Investment in student property sector has been driven by structural undersupply and positive rental growth year on, despite the economic downturn.

“Our research shows that students will pay more in the UK for high quality, well-maintained accommodation than for the traditional run down and neglected shared houses, because there really isn’t a big price difference between poor and high quality accommodation. A HMO (House in Multiple Occupation) property can provide an 8% minimum cash yield, though we provide a typical 13% cash yield, including 5% capital appreciation.

“What’s more, the domestic student population is continuing to expand, with an extra 30,000 university places offered in 2014.  UCAS have reported they are expecting an all-time high of 500,000 applications this year.

Sandeep Singh, an Indian lawyer and a real estate investor comments: “The UK is considered a safe market without a lot of hassles for overseas landlords looking for passive income.  The UK law does not prohibit international investment from foreign nationals. To add to this, there are no legal hassles regarding title of property and the prices of real estate in Indian cities are very much comparable with prices in UK major cities.

“Since the legislative changes, the UK student market has become highly attractive for Indian investors as it offers high yields, good asset growth and hands off investment.”

Mistoria Group was formed in 2009 by entrepreneur, Mish Liyanage. Together with a group of highly qualified, successful property professionals, he ensures that each client receives a bespoke solution tailored to their specific property needs. For further information, please visit www.mistoriagroup.com or call 0161 707 6106.

 

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PRESS ARTICLE – Why discerning student-property investors choose Mistoria

www.retiremove.co.uk is the property and lifestyle website for the discerning retiree.

Read the latest feature about the Mistoria Group, in which, Joy Towney explains her reasons for choosing property as a form of investment and how the Mistoria Group helped her manage the process…

Retire Move

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New landlord regulations

Last week, the Committee of Advertising Practice (CAP) sent out letters to all relevant trade bodies regarding new landlord regulations, with guidance on how to ensure lettings ads refrain from displaying misleading prices.  To prevent tenants from being landed with unexpected non-refundable fees and charges, which they may not be able to afford, CAP has informed all letting agents and private landlords that all costs must be included in the “asking rent” for the property and displayed prominently on all advertising material.

The regulations come after several landlords have been caught charging one price to draw in potential tenants, before piling on the costs of admin fees and inventory charges at a later date.  As the Chief Executive for the Advertising Standards Authority, Guy Parker, has noted, renting is a “big financial commitment” and becoming more and more common in the UK, as people are unable to afford the cost of buying.  To hide costs in the early stages, only for them to “hit tenants in the pocket at a time when they need every penny they’ve got” is simply not fair. 

From 1st November 2013, websites, property portals and other forms of media advertising will be monitored by the appropriate authorities and any listings which do not include all relevant pricing and fees will be subject to follow-up action.  At Mistoria, we are proud to say that with our costs, what you see is what you get.  Our fees per month or per week are exactly that, with no hidden charges or nasty surprises.  We agree with the ASA, that people should be aware of their monthly or weekly costs and should be able to plan their expenses.  Trust between tenants and landlords is essential and hopefully the new scheme will reduce the number of unreliable landlords ripping off unsuspecting tenants.

Whether you are a landlord and would like to know more about our property management services, or a tenant looking for a room or property to rent, feel free to contact us on 0800 500 3015 to find out more about what Mistoria Estate Agents have to offer.  Alternatively, you can contact us via our website.

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The Deposit Protection Scheme – Keeping Your Money Safe

Deposits can be a scary thing.  You’re handing over a large sum of money to someone you barely know, and trusting that you’ll get it back.  Unfortunately, landlords have broken this trust in the past, which is why in 2007, the Government introduced tenancy protection laws in the UK.  These laws mean that landlords are obliged to place your deposit within a deposit protection scheme to keep it safe until you get it back.

The schemes are government run, meaning they’re completely reputable and trustworthy.  The four schemes available to landlords are:

Each of these websites contains a tool which, as a tenant, you can use to double check that your deposit is protected.  Your landlord is also legally obligated to tell you which deposit protection scheme they are using and how you can apply to get your deposit back.  For a full list of landlord responsibilities regarding your deposit, and to check your landlord isn’t keeping any important information from you, follow the link here.

So what if your landlord hasn’t used a deposit protection scheme?  Well, the four aforementioned websites all offer help and advice for such an event.  The official government website on deposit protection also recommends contacting a county court, who may demand that the landlord repay you the deposit or pay it into a scheme within two weeks.

Moving house is stressful enough without the added anxiety of what your new landlord may be doing with your deposit, so keep your mind at ease by making sure your money is stored away in a reputable deposit protection scheme.  It’s the law!

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Letting Agents to be more upfront when it comes to cost

A new ruling by The Advertising Standards Authority (ASA) now means letting agents must now be much clearer about their fees for rental properties.

Certain estate agencies have been accused of hiding compulsory administration fees making it difficult for the consumer to really know what they were going to be charged for their rental properties.

The ASA have said that all prices now quoted must be transparent to ensure a much fairer system. Now when an agency is letting a property the monthly rent must be advertised alongside any extra admin fee to be paid including information about a property’s deposit, any rent to be paid in advance and also any contract fees involved. These changes are being made to protect all renters but especially vulnerable people such as first time renters and students from looking for a home.

With these new regulations in place consumers will now have all the information they need to compare prices and shop around, so that they can be confident when choosing a property. 

Guy Parker, Chief Executive of the Advertising Standards Authority, said:

“Hidden fees are not only unfair, they hit those who are struggling hardest. Our ruling today makes clear that Letting Agents need to get their houses in order and treat potential tenants fairly.

Renting a property is a significant commitment. And for those who are new to the rental market, like students, navigating it can be particularly difficult. That’s why the ASA is clamping down on Letting Agents who hide fees. Today’s ruling makes clear that agents must include all compulsory fees and charges in their quoted prices. If the fees cannot be calculated in advance then the agent must make clear that fees have been excluded, and provide enough information for consumers to establish how fees are calculated. It’s now our priority to make sure agents across the sector bring their advertising into line.”