Whether you’ve moved into a new property or are getting your property ready to let, there are many things you can do to improve the living space and appeal of your home for the property market. With the UK in another lockdown many of us are keen to make home improvements whilst we have the time. However, it doesn’t mean you have to spend a fortune to carry out home improvements. Hitachi recently looked at the most effective home improvements when you’re on a budget.

Painting

A fresh lick of paint can transform any room and it can be done very easily and cheaply compared to hiring a professional decorator. As an estimate it will cost around £70 to paint a room and could add more than £1,400 to the value of your home when selling and make it much more appealing to any renter looking for a new home.

Kitchen

A new kitchen can be extremely costly but you can make some small changes that will make a big difference. You could replace your splashback for under £100, paint a tiled wall for under £50 or even re-tile your kitchen for around £35 per square metre.

Curtains and blinds

Freshen up your windows with new curtains or blinds. You can purchase ready-made curtains and blinds from around £50 up to £300 depending on the size and fabric chosen.

Decluttering

Decluttering your home can be done for free – what’s more you could even make money if you were to sell any unwanted items. When selling or letting your home it’s essential that you make the most of space available by removing any excess furniture and belongings so that potential renters can picture themselves living in the property.

Kerb appeal

First impressions last so take a look at the outside of your home and make sure your garden is presentable and your front door (and the path leading to it) is in good condition. Sanding down and repainting your front door can give it a fresh new look and will cost under £100 (more if you invest in new door furniture). You could also invest in some inexpensive plants and flowers to brighten up the outside of your house. Talk to us at Newton Letting if you are looking to let your property and achieve the maximum rental value.  

It has been a challenging year for many people for a variety of reasons and we have experienced a once-in-a-generation pandemic, with another lockdown currently in place. But what is the outlook for 2021 for the rental market in particular? In early December we saw the first dose of the Covid-19 vaccine administered in Scotland. This resulted in a rise in demand for rental property, in particular good quality homes with space for working from home and access to a garden, as we look towards spring and those who have delayed previously seeking accommodation. There is an increase in demand for space – much like we saw in July 2020 following lockdown when people were confined to their homes. Gardens and roof terraces were in high demand as were spare bedrooms and larger living spaces to accommodate home working. Last year’s restrictions on socialising may well push demand for homes with space for entertaining as people look to make up for lost time. Summer 2021 could see a sharp rise in people looking for larger kitchens and dining areas in which they can entertain friends and family. During lockdown the demand for pets has been unprecedented. As a result, there will be an increase in demand for pet-friendly properties. Google recently reported a record number of pet related searches – and as well as homes that accept pets, there will be a requirement for access to parks and trails. Google searches for rental properties with outdoor space has increased and allotment waiting lists are higher than ever before. This year could be a year that homeowners reconnect with nature. Recent research from Howsy has shown that houses are in higher demand than flats. However this isn't as pronounced in Glasgow which shows that demand for houses is 59% whilst demand for flats is 41%. The current pandemic has shifted tenant demand but the demand for flats in Glasgow still appears to be robust especially given the number of university students moving to the city. The average university rental yield is 4.4% across the UK, with the top three results found in Scotland. The University of Dundee came top with an average rental yield of 7.2%. Second and third were the University of Aberdeen and the University of Strathclyde with rental yields of 6.8% and 6.62% respectively. The University of Glasgow had a rental yield of 4.4%. Students will be searching for accommodation now that they have more information regarding their results and the influx in demand is positive news for buy-to-let landlords in Glasgow. Talk to us if you are considering investing in rental property in Glasgow.

Whether you are a seasoned or novice investor, it’s important to talk to the experts for the right help and advice according to your individual circumstances. In the meantime, we have put together some information that may help you to scale your portfolio in the right way. This year the UK went into a recession following the pandemic. However, unlike previous recessions this one isn’t driven by finance - instead it has been caused by a health crisis. This is a once-in-a-generation event and although many people have found this year challenging, one area that has remained buoyant is the property market. When the market re opened in June, all aspects of buying and selling property remained active even throughout the current tier restrictions. With built up demand, the news of the LBTT holiday until March 2021 and a change in buyer/tenant priorities, activity in the market has been unprecedented. Demand for buy-to-let is still high and it appears that property prices have been unaffected – in fact, house price growth predicted to sit at around 4% by the end of the year and is currently around 2% to 2.5% in Glasgow.

Location, location, location

It’s always going to be a safe bet investing in city centres and University towns. At present, houses are more in demand than apartments as people are looking for the option to work from home. According to recent research from Zoopla, five out of the top ten hotspots where landlords can find better rental returns are in Scotland. The property portal compared average rents across the UK for two-bedroom properties with how much they would typically cost for landlords to purchase and found that strong rental yields are clustered in Scotland and the north-east of England. Landlords in East Ayrshire, North Ayrshire, Inverclyde and Middlesborough can typically generate rental yields of 7.7%. In Glasgow and Stirling, typical yields were calculated at 7.6% and 7.5%. Scotland has some of the UK’s most affordable buy-to-let property, although it does depend on how big a house you’re looking for. Zoopla found that out of the top 10 affordable cities in the UK, four of them were in Ayrshire.

Diversify

It’s wise to spread your risk across different properties in order to offset any issues you may have with one of your rental properties. You could also diversify by looking at other asset classes within the property market such as HMO’s (which tend to offer very high rental yields) semi-commercial units which will help you to benefit from the stamp duty surcharge which is normally levied on investment properties. You can also consider diversify the geographical area – the location is vital and it’s worth looking at which cities and city regions are performing well.

Mortgages

Major buy-to-let lenders have launched some new products over the last few months, and increased the loan to value of their mortgages with some 75% deals available. Getting advice from an independent mortgage broker is key.

Investing through a Ltd. company

There is an increasing number of landlords who are choosing to register as a limited company to manage their portfolios. When the limited company owns the properties in a portfolio, the company also owns the profits – so as a landlord you may have to pay income tax on any money they’re paid by their limited company. Limited companies pay corporation tax, not income tax and these rates are lower. As a director of a limited company you must keep accounts detailing all income and expenditure, and all purchases using company money must have a demonstrable benefit to the business. Talk to us at Newton Letting about managing your property portfolio.

This is an uncertain time for many landlords and tenants. On November 2^nd 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. 

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.  

One of the most crucial elements of your buy to let property is the rental income. Not only can it cover your costs including your mortgage repayments, but it can also provide a source of income and the ability to scale your portfolio. At present, the UK average void period at the start of your investment is 20 days (Goodlord’s rental index). That’s why it may be worth exploring two options – choosing a property with tenants and choosing a new, pre-tenanted property. A property with a tenant in-situ According to recent research by Howsy, less than 1% of properties currently listed for sale across the UK have a tenant in situ, so they are a rare find. However, if you do manage to find the right one it can be extremely beneficial. By choosing a property that already has a tenant who is in a rental contract enables you to have immediate rental history which means you can better predict the return on your investment in the future. In addition, it means that the property will already have furnishings with no extras to pay for. Make sure you check how long the tenant has been paying the rent but also how long it has been since it was increased. With the current COVID situation you may choose to keep the rental fee the same depending on your tenants circumstances, but it will indicate whether they are paying the current market rate. If they are a good tenant and you want to keep them, it may be worth fixing the rent for a period of time. Remember a good tenant is worth its weight in gold – you’ll have regular income, paid on time and a property that is well taken care of. Pre-tenanted This means that the property is newly built and the developer or agent has already agreed on the tenancies ahead of completion. Although a new property won’t have a rental track record, you can still do your due diligence to find out what the rental income will be and can predict how well it’s likely to perform. One of the benefits of a pre tenanted property is that you have control over the rental income you will earn from the off. As a new property, the agents responsible for agreeing on pre-rentals will have marketed the property at the full market rate, so from the very start you should be able to make a great return. If you want to avoid the initial void period, or want to guarantee a good tenant, buying with a tenant in place can prove to be a viable solution.

It was announced last week that the UK is officially in a recession, so how can you successfully operate as a landlord throughout this challenging time? Prioritise good tenants over high rent It’s better to accept a reasonable offer that’s slightly lower than you anticipate, rather than experience void periods. Now more than ever, it’s important to retain good tenants so carefully weigh up the risks of increasing your rent if you have a great tenant in-situ. Rent insurance During an economically difficult time, make sure you are proactive and take out rent guarantee insurance to protect your income during times of increased risk. Talk to a broker who can look at the whole of the market and find a policy to suit your circumstances. Mortgage payment holiday Payment holidays are for people who need financial help – but it is worth remembering that this should be a last resort and only if you are struggling to make your repayments. Your credit file shouldn’t be impacted but lenders could still use this to make lending decisions in the future. Talk to an independent mortgage advisor for in-depth advice. Rent reduction If you decide to reduce rent to help your tenants during financially challenging times, makes sure there’s a clear agreement in place. Put an addendum in your rental contract with details of the deferred payments along with details of the repayment plan. Cutting costs Talk to us and other letting agents about our rental void periods and how we find renters in a tough market. Choose an agency that utilises social media and the latest technology to reach the right people as well as competitive fees. Help renters to find financial support If your tenants are struggling to pay their bills, help them to find assistance through Citizens Advice who can help them to budget, access financial aid and find out what benefits they are entitled to. Be aware of the ‘new normal’ In today’s ‘new normal’ outside space and an area or home office to enable working from home is now much higher on renters’ wish lists. A property with a balcony, garden and even proximity to outside space is in higher demand and people are very conscious of another lockdown and want to be prepared for the event. Is your renter profile accurate? Consider widening your reach – if you previously wanted to rent to students could you make alterations to appeal to professionals? Look at how you could adapt your property to appeal to a wider audience. Consider pets During lockdown there has been a surge in pet ownership and research and it’s worth considering that over 44% of households currently own a pet. If you buck the trend and allow pets, then your chance of attracting long-term, trustworthy tenants will increase. A tenant who is lucky enough to find a pet-friendly property is more likely to be a great tenant in order to protect their future rental opportunities. Just make sure that there is an additional clause in your tenancy agreement to ensure that any damage is paid for or fixed and that the property is left clean and in good order. Talk to us at Newton Letting if you would like further advice on renting your property during an economic downturn.  

It’s important as a property investor that you make a good return from your investment. This can be from rental yield which gives you regular income, or capital growth which is the increase in value of the property over time. Your return could be from either one or both of these things.

Capital growth

This is also known as capital appreciation and refers to the increase or decrease in the value of your property or property portfolio over time. If you purchased a property four years ago for £200,000 and the current value is £250,000 then your capital growth is £50,000. There are lots of factors that can affect your capital growth such as the economy, local regeneration, new transport links, low mortgage rates boosting demand in new homes and lack of supply. It’s important to invest somewhere that property looks set to increase in value and you can usually get this information from property experts and literature surrounding what’s happening in the general property market and also within each region.

Rental yield

Rental yield is the return you make or expect to make from your property. To work out the rental yield for a particular property, you will need to know the purchase price of the property, or a current market value, and the annual rental income that you expect to receive. Take the annual rental income amount and divide it by the property value or purchase price. To convert this figure to a percentage, you will need to multiply this by 100. This percentage is your rental yield. For example, your new property purchase would give the following rental yield: Annual rental income: £10,000 Purchase price: £200,000 Rental yield: 5% A gross yield is when you take the example above and work out your rental yield. If you are trying to work out your net yield, you will need to take into account other costs such as your insurance, mortgage repayments, letting management fee and maintenance costs.

Location

Each city and region across the UK differs in terms of rental yield as average rents vary. Recent research has shown that rental yields in Glasgow in particular are higher than in other regions. If you are looking to invest in a rental property, talk to us at Newton Lettings as we can advise you on the rental value of property across Central Scotland.  

The Scottish government has published the rules that landlords will need to adhere to from today, following the reopening of the property market here in Scotland. Although landlords will need to observe safety measures such as regular hand washing, socially distancing from clients and team members and using face masks, the testing and maintenance of gas and safety equipment has been relaxed until later on in the summer. Landlords will still need to make every effort to abide by gas safety rules, but local authorities will take a more lenient view of electrical safety maintenance and testing. Unless there is an ongoing problem or emergency with these utilities, maintenance won’t be required to be completed phase 3 of the route map out of the cororonvirus lockdown. Additional measures include not enabling house moves where any of the tenants are still shielding or self-isolating, and that physical viewings of properties should only take place if virtual viewings are not an option. Landlords should ensure that any repairs, maintenance and gas and electrical safety checks are carried out between tenancies where the property is vacant. If this isn’t an option, then appointments need to be made in advance and if possible, when the tenant is not present and give appropriate notice except in an emergency. In between the tenancies, landlords must carry out a deep clean to prevent the spread of the virus and for tenants’ peace of mind. If you would like further advice or help on your responsibilities as a landlord during this time, talk to a member of the Newton Lettings team.

The buy-to-let market has been put under pressure with the financial implications making it difficult for tenants to pay their rent. But how can you navigate your way through this crisis? If your tenant has lost their job, they may struggle to pay their rent. You may be confused as to what your obligations are to your tenants during the pandemic and what financial support they can claim to stop their income from halting. Here are some of your obligations during this time:

Maintenance

Your repair obligations have not changed – as long as you practice social distancing works can still be carried out. You may have difficulty in finding contractors to do the work required, which could make it difficult to ensure your property meets the legal requirements. If you can’t resolve any issues due to the pandemic keep a record of the issue and what you have tried to do to solve it. Government advice states that you should take a pragmatic approach to any non-urgent issues and if you have taken appropriate steps, you won’t be in breach of your duties.

Rental payments

Tenants have been informed that they should continue to pay rent and abide by all other terms in the agreement if possible. If they have lost their job, there are support systems available such as Universal Credit and help for the self-employed. Benefits payments may not be enough and so property owners could take a mortgage payment holiday and agree a schedule for the repayment of rent that has been suspended.

Eviction

The Government has said that tenants can still be evicted but the notice period has been extended. The courts have also suspended hearing repossession cases for 90 days.

Help for landlords

Landlords do not count as ‘self-employed’ and cannot get help from the government rescue package for the self-employed. Landlords can make use of an interest-free loan from the Government if they struggle to bring in rent during the pandemic and to be classified as self-employed would depend on the involvement they have with the management of their properties. A self-employed landlord would need to be operating multiple properties and generating enough income from this for it to be considered a business.

Financial support

If you are a landlord and struggling financially you can defer the payment for your self-assessment tax return from July to January 2021. In addition, you can look to take a mortgage holiday – this shouldn’t hurt your credit score, but mortgage companies may look at this when you take out another mortgage in the future, and they could consider this in any offer they make.

Landlord insurance

Some landlord insurance policies will cover any rental payment defaults, but your policy may only pay out once they have been in arrears for a certain period of time and notice has been served. Tenants failing to pay their rent during this time cannot be evicted for at least three months and you could be faced with delays on your claim.

Finding tenants

If you have an empty property it can still be marketed to let, and it can be viewed via video call. If a lease has been signed your tenant may choose to delay the move in date so talk to prospective tenants to come to a solution. If the property is empty you will still need to pay council tax. If you would like further advice on your obligations as a landlord throughout this pandemic, talk to Newton Letting today.

Today the Fair Rents (Scotland) Bill was introduced to the Scottish Parliament. The aim of the Bill is to change the law in Scotland by amending the Private Housing (Tenancies) (Scotland) Act 2016 and to improve the way that rents are set in the private rented sector, with further support for low income tenants and to help reduce poverty and hardship. The Bill will set a cap on any rental increases and allow tenants to apply for a fair rent to be set, which will be considered based on the condition of the property, the décor, the energy efficiency and other issues. Here’s a summary of the proposals in the Bill: Summary of the proposals in the Bill:

• A cap in Scotland on rent increases for Private Residential Tenancies (PRT) at no more than the annual Consumer Prices Index ("CPI") plus 1 %.
• Tenants will have a PRT with the right to apply for a fair rent to be determined once in any 12 month period.
• Private landlords are required to disclose the rents they charge for each property when they register or renew their registration on the Scottish Landlord Register.
• Scottish Ministers must publish a statement on the impact of the Bill within three years from the commencement of the proposed legislation.
• Scottish Ministers will be able to vary the additional percentage to be applied to CPI in the fair rent CPI cap either upwards or downwards, including a negative percentage.
• Fair rent determination by a rent officer of the First Tier Tribunal cannot be increased from the proposed rent figure that is being appealed against.
• The rents registered in the Landlord Register will be in the public domain.

The Bill will be introduced by May 2021. Talk to us at Newton Letting to discuss this proposal and how it may affect you as a landlord.

This week we saw a lifting of many restrictions in England. One of these was that the property market started back up again with estate agents being one of the first businesses to open following lockdown.  Here in Scotland that message is to 'Stay Home' but could we learn lessons from what will happen in England over the next few weeks?