What Are Renters Looking For?

According to recent research from Zoopla, renters have changed what they are looking for from a home as a result of the lockdown and the subsequent restrictions we have been placed under.

Zoopla’s advanced property search tool revealed that over the last 12 months renters had specified ‘garden’ at the top of their wish-list along with ‘balcony’ and ‘rural’ showing a shift towards renters seeking outside space both within their living space and in their surroundings. ‘Garage’ and ‘parking’ also topped the list – perhaps demonstrating a shift towards less reliance on public transport.

Also on renters’ wish-lists was ‘pets’ showing the surge in renters looking for pet-friendly homes.

Here are renters’ most searched for terms:

1 garden
2 parking
3 garage
4 balcony
5 pets
6 flooring
7 bills included
8 ensuite
9 rural
10 student

The lockdown back in March and the recent tier system seeing the Glasgow area being placed in the highest level of restrictions until December 11th has resulted in people placing importance on having access to outside space. In addition, with many people working from home, living close to public transport is less important and so there’s a shift towards people looking for rural properties.

There has been an increase in the demand for houses over flats with people looking to rent bigger properties for longer, which is in turn increasing average tenancy lengths. The demand for family homes in the rental market has continued to rise over the last ten years and this looks to continue given the challenges around first-time-buyers, particularly those with young families.

This reassessment combined with government incentives has triggered a mini housing market boom and a flurry of activity in the buy to let sector.

Tier 4 – Guidance for Landlords

This is an uncertain time for many landlords and tenants. On November 2nd the Scottish Government announced a new five tier system of restrictions to try and stem the spread of COVID-19. However, it has been confirmed that the property market will stay open across all tiers and property appraisals, property marketing activities, viewings and house moves can all go ahead. On November 17th it was announced that on Friday November 20th at 6pm eleven local authority areas across central and western Scotland, including Glasgow, will enter Tier 4 restrictions for three weeks.

What is the guidance for landlords, agents and tenants in Tier 4?

Lettings agents and landlords are able to access properties by appointment. All visits must follow guidance as set out by the Scottish Government with face coverings, social distancing, hand washing and additional cleaning. Agents and landlords are required to ask if any member of the household has either been asked by Track and Trace to isolate or are showing any symptoms including a new continuous cough, high temperature or loss of smell/taste. If they are isolating or have symptoms, then the appointment must be delayed for at least two weeks and they are no longer displaying symptoms.

If a potential renter would like to view a property they can do so. However, virtual viewings should be carried out where possible and a physical viewing should only be undertaken if they are seriously interested in letting and they have been pre-vetted. When viewing a property, all parties must wash their hands thoroughly or use hand sanitiser as soon as they enter a property. Internal doors or cupboards must be left open, if there are several people in a room at one time, they must be two meters apart and face coverings must be worn at all times.

Tenants are allowed to move into a property during Tier 4 restrictions and are permitted to move from outside their council district for the purposes of moving home.

If you need to carry out repairs on a property this is permitted, and tradespeople are allowed to enter homes for purposes of repair or building/renovation works. Any visits must be carried out by appointment and with measures in place such as social distancing, face coverings, cleaning hand washing. In terms of inspections for gas, electrical and fire safety, these can go ahead as long as a tenant is not shielding, isolating or displaying symptoms.

If your tenant is affected by their ability to pay, make sure you have an open communication with them to try and work out a solution. If they are in financial difficulty, they can claim Universal Credit which includes support for housing costs, and you may qualify for an interest free loan. No tenant should be evicted if they are suffering financial hardship from COVID-19. In addition, landlords can apply for a mortgage break of up to six months. Talk to your lender at the earliest convenience if you are in this position.

What are the Tier 4 restrictions?

  • Restrictions on socialising will remain the same as in level 3 areas but with the advice to stay at home as much as possible.
  • Non-essential shops and hospitality establishments will be closed without exception.
  • Hairdressers and other close contact services will be closed.
  • Homeworking is the preferred option for all sectors with the exception of essential work, outdoor work, construction and manufacturing jobs.
  • Non-essential travel into or out of level 4 areas is prohibited and public transport should only be used when essential.
  • Indoor gyms will be closed and outdoor sports will be restricted to non-contact games.
  • Informal childcare is permitted.
  • All aspects of selling, buying, letting and renting homes is permitted.

If you require advice or help with your rental property, talk to us at Newton Letting. 

Landlords Eligible for Mortgage Holiday

It has been announced that the mortgage holiday introduced in March is being extended with applications open until January 31 2021. This mortgage repayment holiday scheme enables people to put a hold on mortgage repayments for up to, and not exceeding, six months.

Over 1.2m people have already taken advantage of mortgage payment holidays after banks were instructed to offer them to customers. It was part of a package of measures to help people affected by the pandemic. Initially borrowers could take a three-month holiday and this was then extended to 6 months.

The take up was huge – with UK Finance reporting one in nine mortgage customers have benefitted from this scheme. It enabled a vast number of people to take a break from what is usually their largest outgoing, giving them breathing space if they were on a lower wage, for example on Furlough, or have lost their job.

Landlords have been reassured by the Government that they can benefit from the new extended mortgage holiday scheme. The Financial Conduct Authority (FCA) and the Ministry of Housing have updated their websites to clarify that buy-to-let borrowers are also covered by its new guidance during the pandemic. This means that landlords can ask their lender for a payment break for up to 6 months and applications will be open until the end of January.

If you have already taken a three-month mortgage break this means that you can extend it for another three months. If you have already taken a six-month break, you have reached the maximum and will be unable to take a further repayment holiday.

The FCA says: “Borrowers, including those with a buy-to-let mortgage, who have been impacted by Coronavirus and have not yet had a mortgage payment holiday will be entitled to a six-month holiday, and those that have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file.”

You should only ask for a payment holiday if you need one as interest will accrue and when the repayment holiday ends your monthly amount will go up and you’ll have more to pay off in the long run so the option should only be utilised by those who really need it. The  increase will be to pay for the three or six months’ worth of missed payments plus the additional interest.

It’s important to note that if you want to take a holiday you MUST talk to your bank and apply for the holiday. If you simply cancel your direct debit this will be seen as non-payment and will affect your credit score.

Tenanted Properties in High Demand

There has been an increase in demand from Buy to Let property investors for tenanted properties. Tenants are increasingly renting for the longer term and regarding properties as their home rather than a stop gap or short-term arrangement. Buying a property with a tenant in situ or sitting tenant has a number of benefits to investors.

There has been an increase in all areas across the UK with some areas showing as much as a 55% rise in demand.

If you are purchasing a property with sitting tenants, it will be different to the usual sales process so you will need to employ the services of a conveyancer with commercial experience. You’ll need to carry out additional enquiries in all conveyancing transactions, especially with regards to the tenants. The seller will need to disclose all information about the tenants, including the Tenancy Agreement, to establish when the tenancy was created, the status of the tenants and how they may be regulated by legislation.

You will also need to ensure that the property meets safety regulations and all the necessary certificates are in place, such as energy performance, gas and electrical. You will also need to inform the sitting tenants by law, and provide them with your details.

When buying a property with a sitting tenant, there’s no void period or advertising costs to find a new tenant. You’ll have a trustworthy tenant with a proven payment history as soon as the property is yours. This means you’re guaranteed rental income from day one so you can budget with confidence and rely on rental income. They will already have a contract in place, so their tenancy won’t be affected by new ownership.

On the flipside, when you buy a property with a sitting tenant they are entitled to continue to live in the property and this doesn’t affect their tenancy agreement or their rights. This means you can’t evict them or increase their rent until their fixed term tenancy ends.

Talk to us to find out more about taking on a Buy to Let property with tenants in situ.