Latest News

Buy-to-Let Mortgages Flood Back to the Market

Wednesday 7th April 2021

According to recent figures from Moneyfacts, buy-to-let mortgages have flooded back to the market in March with over 200 new products launched. As of April 3rd, there were 2,333 mortgages available to landlords. This is the highest number since the start of the pandemic when many lenders withdrew their products, and 233 more than the previous month marking a rise for the fifth consecutive month.

However, two-year fixed rates are currently 0.28% higher than this time last year.

Buy-to-let mortgage availability has now recovered to 81% of its pre-pandemic levels. In the residential mortgage sector, we have seen a 68% recovery. According to Hamptons International, there are currently just under two million outstanding buy-to-let mortgages in the UK.

In 2016, a large number of mortgages were completed as landlords rushed to beat the 3% stamp duty rise and many of these will be looking to remortgage over the coming months as their five-year fixed deals will be coming to an end. These landlords won’t want to revert to their current lender's standard variable rate, as it will be typically higher.

Landlords will also be looking to buy new properties and in Scotland recently took advantage of the LBTT deadline at the end of March, and across the rest of the UK will be looking to buy within the end of June stamp duty deadline.

In the final months of 2020, around 15% of property in the UK was purchased by investors, with almost half of all investor purchases funded via a mortgage. Taking advantage of the raft of new buy-to-let deals will be existing landlords looking to refinance and those considering property investment for the first time.

Against this backdrop of the rising number of deals, buy-to-let rates have continued to rise. According to Moneyfacts, the average two-year fixed rate is now 3.05%, which is 0.28% higher year-on-year and the highest average recorded since June 2019.

The average five-year fixed rate deal is currently 3.415, an increase of 0.17% compared to the same time last year.

There are signs that buy-to-let interest rates may be starting to fall for those buying with larger deposits, or those with a good amount of equity in their existing properties. For example, the average buy-to-let two-year fixed rate mortgage for those with 40% equity has fallen from 2.52% to 2.14% over the past month. Lenders have been wary of the effects of the pandemic on landlords as many tenants have been furloughed, leading to them withdrawing high loan-to-value lending.

At present, lenders require the landlord to demonstrate that their rental income will cover between 125% to 145% of the mortgage repayments.

Although mortgage rates were lower before the pandemic than they are now, they are still very low from a historical perspective and some experts feel that they are unlikely to drop further. Five-year fixed rates have been popular in recent years as there are less stringent stress tests on these deals, enabling borrowers to take out larger loans. According to recent figures from Moneyfacts, buy-to-let mortgages have flooded back to the market in March with over 200 new products launched. As of April 3rd, there were 2,333 mortgages available to landlords. This is the highest number since the start of the pandemic when many lenders withdrew their products, and 233 more than the previous month marking a rise for the fifth consecutive month.

However, two-year fixed rates are currently 0.28% higher than this time last year.

Buy-to-let mortgage availability has now recovered to 81% of its pre-pandemic levels. In the residential mortgage sector, we have seen a 68% recovery. According to Hamptons International, there are currently just under two million outstanding buy-to-let mortgages in the UK.

In 2016, a large number of mortgages were completed as landlords rushed to beat the 3% stamp duty rise and many of these will be looking to remortgage over the coming months as their five-year fixed deals will be coming to an end. These landlords won’t want to revert to their current lender's standard variable rate, as it will be typically higher.

Landlords will also be looking to buy new properties and in Scotland recently took advantage of the LBTT deadline at the end of March, and across the rest of the UK will be looking to buy within the end of June stamp duty deadline.

In the final months of 2020, around 15% of property in the UK was purchased by investors, with almost half of all investor purchases funded via a mortgage. Taking advantage of the raft of new buy-to-let deals will be existing landlords looking to refinance and those considering property investment for the first time.

Against this backdrop of the rising number of deals, buy-to-let rates have continued to rise. According to Moneyfacts, the average two-year fixed rate is now 3.05%, which is 0.28% higher year-on-year and the highest average recorded since June 2019.

The average five-year fixed rate deal is currently 3.415, an increase of 0.17% compared to the same time last year.

There are signs that buy-to-let interest rates may be starting to fall for those buying with larger deposits, or those with a good amount of equity in their existing properties. For example, the average buy-to-let two-year fixed rate mortgage for those with 40% equity has fallen from 2.52% to 2.14% over the past month. Lenders have been wary of the effects of the pandemic on landlords as many tenants have been furloughed, leading to them withdrawing high loan-to-value lending.

At present, lenders require the landlord to demonstrate that their rental income will cover between 125% to 145% of the mortgage repayments.

Although mortgage rates were lower before the pandemic than they are now, they are still very low from a historical perspective and some experts feel that they are unlikely to drop further. Five-year fixed rates have been popular in recent years as there are less stringent stress tests on these deals, enabling borrowers to take out larger loans.

Featured Stories

Buy-to-Let Mortgages Flood Back to the Market

Wednesday 7th April 2021

What are Renters Looking For?

Wednesday 31st March 2021

Following the pandemic last year, there was a re-evaluation of renters’ priorities. Instead of looking for homes close to transport links, restaurants, bars and amenities, people were turning their attention towards properties that enabled them to adapt to the lockdown lifestyle. This included additional space for working from home, outside space by way of a private garden, balcony, terrace or shared garden, being within close proximity to outside space for exercise and a good broadband connection. To find out what renters were looking for from their homes Zoopla has released the top search terms for those looking at new homes on the portal. The number one search term is Garden followed by Parking and Garage – indicating that people are relying less on public transport and access to their office. The fourth term was Balcony and given that many renters have bought pets to keep them company over lockdown, Pets was also a popular search term as people seek pet-friendly rentals properties. Aside from the location and outside space available, flooring was another search term - as was rent that included bills and an ensuite bathroom with the property. There was also evidence of demand for homes close to university with Student the 10^th most popular search term.

	Renters’ top 10 most-searched terms
1	garden
2	parking
3	garage
4	balcony
5	pets
6	flooring
7	bills included
8	ensuite
9	rural
10	student

Rented Garden Ideas

Wednesday 24th March 2021

This month we heard the news that we will soon be able to spend time outside in our gardens and parks with friends and family. With that in mind, you might want to give your outside space a revamp. However, when you’re renting a property it can be difficult to make your home exactly how you want it to be without worrying about causing any damage resulting in losing your deposit. The latest research from Boiler Plan has revealed that Google searches for how to update a rented outdoor space has seen a big leap. Searches for ‘DIY balcony ideas’ have risen by 586%, searches for ‘garden ideas’ have increased by 167%, while ‘gardening in a rented house’ searches have gone up 29%. With that in mind, here are some great ways to put your personal stamp on your garden without causing any permanent changes – making them perfect for rented homes.

Potted plants and hanging baskets

Some well-placed potted plants can transform your balcony, deck or garden into an oasis full of beautiful flowers and greenery. Invest in pots that aren’t too big so that you can easily take them with you when you move. Hanging baskets can also make any garden look impressive, adding a pop of colour to any doorway or patio. Fill them with plants that are easy to care for.

Home furnishings

Home furnishings outside can help you to create a comfortable, cosy space. A splash of colour can transform a dull area – use rugs, seating with water-proof cushions, stand-alone hammocks and side tables with bright pots.

Grow your own

Over the last 12 months there has been a spike in people wanting to grow their own vegetables and allotments have never been in such high demand. Although your landlord is unlikely to allow you to dig up their garden you could investing in a clever planter. Using vegetable bags and pots you can grow your own food without using the garden grounds.

Fire pit and lighting

One of the biggest trends as a result of the pandemic is fire pits and fairy lights. A fire pit enables us to enjoy the outdoors whatever the weather, especially on chilly evenings. They are freestanding and perfect for renters as they pose no risk to the garden. Fairy lights or solar-powered lighting are an affordable way to add some ambience to your garden. Try weaving fairy lights through a garden screen or stringing them across the fence.

Garden screen

Revamp your outside space with a garden screen for a decorative feature and to cover up any unsightly areas or give you privacy from neighbouring gardens or balconies. Again this is something that can go with you when you move on to your next property.

Property Appetite Among Landlords Remains Strong

Friday 19th March 2021

Despite the LBTT holiday ending at the end of this month here in Scotland, the latest research has shown that appetite for property among landlords is still high. The research carried out by Foundation Home Loans has shown that landlords have indicated that they will remain active in the rental property market from April onwards when the stamp duty holiday is due to end. It was predicted that Scotland would follow England and Wales in extending the holiday for another three months, but the Scottish government has confirmed that the LBTT holiday will end as planned, on March 31st. The research from Foundation Home Loans and data group BVA BDRC revealed that 48% of buy-to-let property owners will remain active in the first quarter of the year but 41% of landlords would buy in the second quarter, 28% in the third quarter and 29% in the final quarter of 2021. The survey involved questioning nearly 1,000 landlords in December 2020 and January 2021. The research showed that overall, 16% of landlords would buy and additional property this year and only 14% would abandon the purchase if completion didn’t look likely before the end of March. When asked if the government would extend the LBTT relief in Scotland, 31% believed that the deadline would remain and only 4% were buying property because of the stamp duty holiday. This indicates that landlords have a continued intention to keep purchasing property to let, regardless of the stamp duty holiday being extended which is positive news for the sector.

Residential Property is Still the Investment of Choice

Wednesday 10th March 2021

Despite a challenging few years for landlords following tax and regulatory changes, buy-to-let continues to outperform most other asset classes. With poor returns on savings from banks and building societies following historically low interest rates, a large proportion of investors have turned towards residential property to supplement their income. Add to this the backdrop of low borrowing rates on mortgages, high demand from tenants, stable yields and rising house prices over the last year, buy-to-let remains an attractive investment option. According to UK Housing & Spatial Information Specialist, Dan Cookson, in Scotland in February 2020 there were 325,649 households in the private rented sector – 63% of these were flats and 27% houses. What’s more, 49% of private rented properties are two-bedroom properties with one-bedroom properties making up 24%. The private rented sector is estimated to be worth £46 billion and is therefore an important part of Scotland’s economy with approximately 242,000 registered landlords. With around 10 million people in rented accommodation, it is no surprise that research from Knowledge Bank has revealed a growing number of new buy-to-let investors. Knowledge Bank provides a large database of mortgage lending criteria, and the latest monthly criteria index shows the terms that brokers are searching for, which gives an indication of mortgage completions in two-or three-months’ time. This analysis of brokers’ searches in February found that intermediaries are working with a growing number of potential new landlords along with interest from first-time landlords becoming the most-searched term by brokers in February. It also suggests that those who weren’t currently on the housing ladder were looking at buy-to-let as an option due to restrictions around loan to income for residential properties. This reveals that investors, who would normally look to deal in stocks and shares, are turning their attention towards buy-to-let. Another top search term was ‘Soft footprint at DIP stage’ suggesting that brokers were carrying out searches that would not impact future applications possibly as a result of clients having a low credit score. 'Furlough' was also top of the searches along with ‘Maximum age at end of term’ and ‘Self-employed’.

Spring Budget 2021

Friday 5th March 2021

This week Chancellor Rishi Sunak outlined the Spring Budget. He announced a range of measures that will affect the property industry following a challenging year. The Furlough scheme has been extended until September 2021, the stamp duty in England and Northern Ireland has been extended to September (with a tapered system brought in from July), and there is a new government-backed mortgage guarantee scheme to help reintroduce low LTV mortgages.

Furlough

This is the most significant announcement for the private rented sector for the short term. This extension of the furlough scheme, combined with the uplift in Universal Credit, will provide additional support for many tenants across Scotland and safeguard the finances of landlords and letting agents by helping to prevent rent arrears. That said, when the furlough scheme comes to an end there could be some redundancies which could affect tenants’ ability to pay their monthly rent. Private tenants have been the hardest hit by the pandemic – and have found it difficult obtaining emergency housing from local authorities - whereas homeowners have been able to take a 6-month mortgage break which would be added to their loan. As yet, there have been no plans to offer financial support for those who need to pay off rent debts that have built up as a result of the pandemic, and therefore face the prospect of damaged credit scores and being able to find somewhere to live in the private sector.

Stamp duty

The stamp duty holiday has been extended until July 31st, when a tapered payment system will be introduced until the tax holiday ends in September. This applies to stamp duty in England and Northern Ireland, with the news that Wales will follow suit with LTT. However, in Scotland those in the middle of a property purchase will lose out as Kate Forbes, the Finance Secretary, has stated that LBTT will end as planned. We expect there will be pressure from within the industry for the Scottish government to change its stance on this.

Mortgage guarantee scheme

A new mortgage guarantee scheme aims to bring back low deposit mortgages that have been largely withdrawn by UK lenders since the start of the pandemic. This policy now gives people a chance to buy their own home with just a 5% deposit. The mortgage is available from some of the UK’s largest lenders including Barclays, Santander and Lloyds and can be used for properties up to the value of £600,00. The scheme is open to all buyers, not just first-time buyers, and is not limited to new build homes. It will run from April 2021 to December 31st 2022.

Landlords Snap Up Properties

Thursday 25th February 2021

According to the latest data from Direct Line, 60% of landlords have used the LBTT (stamp duty) holiday to expand their property portfolio. The research carried out by Direct Line shows that figure this rises to 79% among commercial landlords. Among landlords with several properties, 43% invested in properties outside major cities, with 82% of landlords who have done this saying they expect a large number of renters to move out of city centres following the pandemic given the increase in those who have and will continue to work from home. Half of all landlords believe the stamp duty holiday introduced last July until March 31st has kept the property market afloat while 43% have stated that it has prompted them to bring forward their plans of expanding their property portfolios. Although the tax holiday is due to end on March 31st there have been reports in the last week that the chancellor could prolong the tax break in the upcoming budget, and this could prompt Scotland to follow suit. At present it isn’t clear if this three-month extension would apply to all purchases or those that have already been agreed. According to the Direct Line survey, 45% of landlords fear that the end of the tax holiday will adversely affect the value of their property portfolio. That’s why 30% of landlords have stated that they are prepared to cut corners in order to complete their purchase before March 31st including forfeiting thorough property survey which could delay the purchase. Almost 75% of multi-property landlords will pull out of transactions if the purchase doesn’t complete before the stamp duty deadline in March.

Renting in 2021

Wednesday 27th January 2021

We believe that renters and landlords should be optimistic for the coming year. As the vaccine programme is rolled out, there is an increase in confidence here in Scotland resulting in a rise in renter-demand. It’s a renter’s market and landlords offering quality homes to those tempted into rental through market uncertainty will benefit this year. Outside space There has been an increase in demand for properties with outside space and Insta-worthy interiors. Searches for property with a garden or roof terrace was higher than ever – it was even Rightmove’s top search term for those looking for a new home in 2020 alongside ‘parking’ and ‘garage’. With outside space in high demand, this year could see more people reconnect with nature, with the emphasis on gardening - whether it’s a large plot or small balcony. City location Although there has been a marked increase in those moving away from cities to more rural areas following a re-evaluation of what people want from their homes, Glasgow is unique in that the West End in particular will never lose its appeal. With plenty of access to parks and green space, great bars and restaurants, boutiques and, of course, the university close by, demand will always be high. People want great properties close to Glasgow city, especially if it has additional space to accommodate home working and some access to outside space. Working from home Demand from single occupancy residents looking to increase their living space to allow working from home and extra bedrooms from young professionals has resulted in demand for larger properties especially three-bedroom houses, but there are a large number of people who will want to save money by living in smaller properties in a great area - especially in an uncertain job market. Pets Last year there was a surge in demand for properties that allowed pets with a record rise in the number of Google searches for pet friendly homes. As professionals gear up to blended home/office working, it is believed that renters will want access to green open space, parks and trails and pet-friendly services. Talk to us at Newton Properties if you are looking for a rental property to suit your lifestyle.

Make a House a Home!

Sunday 17th January 2021

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.

Eviction Ben Extended in Scotland

Saturday 9th January 2021

A temporary ban on evictions in Scotland has been extended until the end of March 2021. There will be regulations presented to the Scottish Parliament on the 14th January 2021 which will outline an extend the current ban, which is in place until the 22nd January. This extension to the ban will apply to all evictions with the exception of serious anti-social behaviour, including domestic abuse. The terms are subject to review every three weeks to ensure it remains necessary to protect against the spread of coronavirus and will remain until 31 March 2021. This means that renters will retain a safe home during the pandemic, reducing the burden on local authorities, who have a duty to re home those who have been made homeless following an eviction. It will also make it easier for people to follow the guidelines during the current lockdown. Housing Minister Kevin Stewart said: “Extending the temporary ban on the enforcement of eviction orders in the private and social rented sectors in areas subject to level 3 and 4 restrictions will support tenants, and offer people protection from transmission of the virus by being able to stay safe in their homes. "It will also prevent additional burdens being placed on health and housing services during a time where they are already working hard due to the impact of the pandemic. This is a proportionate response to an extremely challenging set of circumstances. In the case of serious anti-social or criminal behaviour – including domestic abuse – eviction orders can still be enforced. “We have been clear that no landlord should evict a tenant because they have suffered financial hardship due to the pandemic. Tenants in difficulty should engage with their landlord and seek advice on the options open to them.” This ban which has been formally extended for two months is expected to be repeated in England. First Minister Nicola Sturgeon said: “It has become even more important to stop people from needing to find a new home or perhaps from having to move in with a different household. For that reason the regulations to prevent the enforcement of eviction notices will be extended until March 31 in all Level 3 and Level 4 areas, which of course right now is the entirety of Scotland. And if necessary the regulations can be extended further after that date.” Talk to us at Newton Letting if you have any queries regarding your rights and responsibilities as a landlord during this time.

What's in Store for Rental Demand in 2021

Saturday 2nd January 2021

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.

Maximise Your Income Through Your Rental Portfolio

Tuesday 15th December 2020

If you have a property portfolio, the success of your rental properties will depend on several factors – all of which you are in control of. Here are some ways to ensure you are maximising your income through your rental portfolio:

Due diligence

It’s important to do your due diligence when purchasing a rental property, but how do you do this effectively? You need to carry out thorough investment property analysis and calculate the capitalisation rate, cash-on-cash return and profit margins to understand your return on investment (ROI). You need to ensure your property is cash flow positive. Use an online ROI calculator to make sure you will earn the maximum amount from a chosen rental property and talk to a good lettings management company and financial advisor to get to grips with the numbers.

Tenants

Regardless of the predicted ROI, this is moot unless you actually have a tenant who will pay the rent, on time, every month. The best thing to do is use a letting agent that will carry out all the necessary checks before offering a tenancy agreement, ensuring they are in a position now and in the future to pay their rent. Make sure you carefully consider your tenants to avoid any potential void periods.

Positively geared property

A positively geared property (or positive cash flow property) is an investment property that makes more money in rental income than the outgoing costs put together. Talk to an advisor regarding the figures to ensure you are investing wisely.

Understanding tax

When you invest in property you can take advantage of several tax benefits. Make sure you are aware of all tax deductions that apply to your property whether they are profitable or you experience losses. Talk to a good financial advisor to make sure you understand your rights and responsibilities.

Don’t include utility costs

The rent you set should exclude all utility costs as this will help you to maximise your income and make as much money as possible through your investment.

Insurance

Make sure you get a top-rated insurance policy when investing in rental property. This will give you a safety net should your property experience any damages. You could also consider cover for non-payment of rent and any associated legal costs – something that has been an issue during the pandemic. Talk to an independent broker who can find the best policy and who is aware of all the small print with exclusions. It’s important to equip yourself with the right knowledge and advice to make sure you can maximise your income. Talk to us at Newton Letting if you would like advice on your property portfolio.

How to Scale Your Property Portfolio

Friday 4th December 2020

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.

What Are Renters Looking For?

Friday 27th November 2020

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

Wednesday 18th November 2020

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.

Landlords Eligible for Mortgage Holiday

Monday 9th November 2020

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

Sunday 1st November 2020

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.

Houses are in High Demand

Thursday 22nd October 2020

Following the re evaluation of tenants’ priorities following lockdown – and a continuing of restrictions on those of us living in the central belt of Scotland – it appears that houses are currently in higher demand than flats or apartments both in Glasgow and across the rest of the UK. According to research from Howsy which looked at rental data across 22 major cities across the UK, demand for houses is currently at 29% whilst demand for apartments and flats is an average of 26%. Here in Glasgow the demand for houses is currently 59% with flats and apartments at 41%. The overall tenant demand currently stands at 42%. Regional variations show that Belfast was as much as 69% as tenants look for more inside space to accommodate home working and spending more time at home, and a need for outside space as for many people socializing in the garden is the only way they can see friends and family at home. However, there were some cities where flats and apartments remained the most popular option with Manchester showing the highest demand at 57% so for some major cities, the demand for apartments remains robust. As Scotland returns to some form of normality – which looks like next year at the earliest – demand for flats and apartments should increase, especially in university towns and cities. This will be welcome news for landlords. If you are looking for a house to rent register for property alerts.

Avoiding Potential Void Periods

Wednesday 14th October 2020

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.

Supporting Tenants in Scotland

Wednesday 7th October 2020

There is some good news for private tenants who are experiencing financial difficulties and unable to access certain benefits or support that will help them to meet their rental payments. A sum of £10 million has been allocated to the Tenant Hardship Loan Fund with details of who is eligible and how to apply will be announced soon, with the loan set to be accessible from November. An extra £3 million is being pumped into the Discretionary Housing Payment fund, which has been implemented in order to assist tenants already in receipt of benefits. The Discretionary Housing Payment fund was originally a £60 million budget set up to mitigate the impact of the bedroom tax in Scotland. It has now been increased by £19 million including the latest £3 addition. Scottish Housing Minister Kevin Stewart believes that these measures will ensure no one is left in a position where they cannot access support to meet their rental payments. During the same announcement, the Housing Minister extended the current ban on evictions (due to end on September 30^th) to March 2021. This means that regardless of the type of tenancy, or what kind of notice is served, or for whichever reason, all eviction proceedings will be placed on hold. The only exceptions to this are cases involving anti-social behaviour or domestic abuse. Find out more: Scottish government’s support for tenants.

Covid19 Update - Property Viewings

Monday 28th September 2020

Here at Newton Letting we are keeping a close eye on Government guidelines and have implemented all requirements to ensure the safety of our landlords, staff and tenants.

Anyone looking to view a property with Newton Letting, will need to adhere to the following rules and guidance in line with the Scottish Government.

All viewers must be registered to attend a viewing with Newton Letting and a register will be taken at the viewing prior to going into the property and only the registered viewer will be able to attend.Personal Protective Equipment (PPE) MUST be worn at the property including gloves, mask and hand sanitizer. Please note that Newton Letting will NOT provide this. An allocated time slot will be given for you to attend. If you are late, it’s at our Viewing Representatives discretion on whether or not they will allow you to view. Only one person will be permitted to view the property at a time so please do not bring family members or children with you to the viewing as they will not be able to enter the premises.

Whilst you are in the property we politely request that you limit touching any fittings or furnishings and refrain from opening doors, cupboards and drawers. We would ask that you view the property and ask us any questions after you have left the premises. For further guidance/information on Covid-19, please see the following link:

https://www.gov.scot/coronavirus-covid-19/

We appreciate your cooperation at this unprecedented time and if you have any questions prior to viewing, please don’t hesitate to contact a member of our team.

Investing in Buy to Let During a Recession

Friday 18th September 2020

Since the UK came out of lockdown there have been reports that we are seeing a property mini boom: *Sales agreed data suggests a 13 year high for the market. Year-on-year, the number of sales per branch increased by 44%. *The number of house hunters registered per estate agent branch rose by 13%, increasing from 379 in June to 428. (Zoopla) *In July 2020 in the UK 8% of properties sold for more than the original asking price and year-on-year housing demand is up by a third. (Zoopla) *Year-on-year, housing demand is up by a third. *The post-lockdown housing market rebound shows few signs of slowing despite the UK going into recession, with the number of new sales agreed in August on Zoopla running 76% ahead of the five-year average. (Zoopla) *Buyer appetite since the start of 2020 is now 34% higher than the same eight months in 2019 and, despite the summer holidays, it remains unseasonably strong. (Zoopla) *More homes are coming onto the market, with the flow of new supply over the last month 50% up on this time last year. (Nationwide) *Edinburgh house prices rose by 3% and Glasgow 2.2% *During Q2 of 2020, average rents in Glasgow rose by 1.4% year-on-year to £810. Four bedroom properties experienced the greatest year-on-year increase in rents, rising by 3.1% to £1,858. (Zoopla) *The buy-to-let mortgage market is showing signs of recovery after the number of deals nearly halved during the early weeks of the coronavirus pandemic. The average cost of two-year and five-year fixed rate mortgages have also fallen slightly compared with March, to stand at 2.72% and 3.11% respectively. (Nationwide) How is this possible when house prices crashed in the last recession? It’s possible that this is because the recession we are seeing today has been driven by a health crisis wheras the last recession in 2008 was driven by finance. The Government chose to shut down certain markets whilst implementing measures to support businesses affected by the pandemic with incentives to boost the property market such as a rise in the Stamp Duty/LBTT threshold. So why is it still a good idea to invest in property? House price predictions from Savills shows that prices are expected to grow by an average of 15% by 2024 although London will see with just a 5% increase. Alongside house price rises, rents are also set to increase. Demand for homes is exceptionally high and this supply and demand imbalance is supporting the headline rate of growth with the time to sell a property falling since lockdown. With the stamp duty holiday set to end in 2021 it’s a great time to take advantage of this – although for investors the 3% additional property rate is still in effect. Aside from the financial analysis, socially nearly 40% of millennials are still renting at age 30 and a third of the wider generation are expected to rent into retirement. It’s also believed by the Resolution Foundation that UK renters will outnumber homeowners by 2039. What’s more, the UK population looks set to reach 74 million in 20 years, a sign that the house demand is rising. At present interest rates are low so you can secure a very competitive buy-to-let mortgage rate making the investment process more accessible. Finally, for foreign investors, the weakness of the pound continues to be an opportunity to save money long-term especially where the market here in Scotland is so affordable compared to the rest of Europe. Talk to us if you would find out more about rental values in Glasgow.

Renting Your Property In A Recession

Saturday 5th September 2020

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.

A Bright Outlook for Buy to Let

Friday 14th August 2020

According to the latest House Price Index from the website ‘Home’, we can rest assured that there’s an optimistic outlook for landlords and buy to let investors across the UK. Across the UK there have been reports of rising rent and lack of supply – even though many Airbnb properties have come back to the market following lockdown. For this reason, reports show that supply is up by an incredible 30% compared to the same time last year. Whilst rents are rising across the UK, rent in London is actually falling and is currently down 5.2%. The report shows that in northern regions of the UK, annualised rises are around the 10% mark and this, combined with the capital gains to be had in these sales markets, there is likely to be further BTL investments. At present the value of the pound is relatively low and the Stamp Duty holiday – with the threshold raised to £500,000 in England and LBTT raised to £250,000 in Scotland, is a significant draw to property investors and in particular for foreign investors and expats. The Stamp Duty surcharge will go back to pre lockdown levels from April 2021 and so many people considering investment will bring plans forward and invest in the next six months.

Understanding Capital Growth and Rental Yield

Thursday 23rd July 2020

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.

Are You New to Property Investment?

Thursday 23rd July 2020

Property investment can be extremely rewarding – both on a personal and professional level. It can give you financial freedom, a flexible work-life balance and surprising returns especially here in Glasgow where they are higher than anywhere in the UK. However, it can be extremely daunting so it’s important to do your homework first.

Buy to Let

If you are going to let your property – either privately or via a letting agent, you need a buy to let mortgage on your property. If you have a residential mortgage, you’ll need to talk to your lender about your plans. As a landlord with a buy to let property, you have several legal obligations and responsibilities that you need to be aware of.

Finance

You will need to ensure your finances are in good order and in place before buying an investment property. Talk to a mortgage broker about your plans and find out how much you will need to invest and whether you will be eligible for a buy to let mortgage. They will also set out any additional costs and fees.

Time

Do you have time to be a landlord? If not, can you outsource the management of your property to a letting agent? It’s important to be realistic about not only the time you have to spare, but whether you have the experience and knowledge to undertake the running of your investment property.

Location

When buying a property to let out, it’s important to do your homework and find the right area. Are you going to buy a property where you live or are you going to buy it in a city centre, close to a university or in an area popular with young professionals. The type of property you buy has to marry with the location – there’s no point in purchasing a luxury flat in a student area nor a family home where there are no good schools. You’ll also need to decide on the type of property within that location – new build, off-plan or resale. You may even decide to visit the local auctions – but we strongly advise only doing this if you have had sound advice first. Talk to your local estate agent about rental values, the types of renters in the area, transport links, schooling and amenities. Get the advice from several agents.

Your return on investment

Rental yield and capital growth are the two ways that you can increase your return on investment. Take a look at the differences here. (link to existing blog) If you are a first-time investor, we hope you’ve found this information helpful. If you have any questions, please don’t hesitate to talk to us.

What Landlords Need To Do From Today

Monday 29th June 2020

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.

Opening Back Up For Business

Wednesday 24th June 2020

The property market here in Scotland will officially open back up for business on 29th June as we move to phase two of our roadmap out of lockdown.

This means that home moves will surge ahead with stringent safety measures in place. Here at Newton Letting we believe that June 29th can’t come quick enough - we have many tenants waiting to get the keys to their new home and many more seeking suitable accommodation.

Pent up demand

According to latest reports from Citylets, letting agents have already experienced a huge spike in new tenant enquiries property, with transactions that were put on hold due to the pandemic, finally able to complete. We believe that there will be a big surge in demand as soon as the market opens and that the backlog of tenants that have been unable to move over the last 3 months will no doubt cause a ‘ripple’ effect with people looking to move over the peak summer months.

The importance of finding the right tenant for your property

We are yet to see the full effects of the pandemic on the economy, but with the Job Retention Scheme soon to be phased out, we do have some concerns that some tenants will not be able to meet their financial obligations. Therefore, securing the best possible tenant has never been more important going forward. It’s imperative that tenants stay as long as possible to minimise any void periods and that they are in a secure position to ensure that they can pay their rent month to month.

Keeping clients safe

The Scottish Government has issued new home moving guidance and virtual viewings should take place wherever possible and if viewing in person, virtual tours should be used prior to visiting the property to minimise the time spent at the property. In addition, it’s important to develop effective contactless tenancy moves and to keep any measures in place until the risks are negligible.

Could the market have opened sooner?

Whilst we are all relieved that the market will re open in less than a week, we also question whether the market could have opened sooner, in line with England. We believe that with the correct procedures in place to protect everyone from the risks, the market could have already reopened.

Coronovirus – A Landlord’s Guide

Thursday 4th June 2020

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.

The Rights of Private Tenants

Thursday 4th June 2020

If you are a tenant here in Scotland, you have a number of rights to protect you and the property in which you live. Here are some of the things you should be aware of as a private tenant: You have the right to live in a safe property that is in good condition. You have the right to live in a property undisturbed, without any unreasonable interference from your landlord or letting agent. You have the right to know the energy performance via an Energy Performance Certificate. Your tenancy deposit will be protected in a government approved scheme. It must be registered with Letting Protection Service Scotland, Safe Deposits Scotland or mydeposits Scotland. You have the right to challenge rent increases that you believe to be unfair. There is a strict legal process that governs when landlords can increase your rent. It can be increased once per year, you will need to be served with a Rent Increase Notice which includes a three-month period before the rent is increased. If you feel it is unfair, you can apply to Rent Service Scotland. You have a right to protection from unfair eviction. If you have a private tenancy your landlord can only evict you for a specific reason as outlined here and it must be stated in writing. Your notice period depends on the reason behind your eviction but in some cases, it can be up to six months. If your landlord ends your tenancy and you refuse to move out, your landlord can only recover possession through court proceedings. If you think you’re being evicted unfairly you can defend this action via a tribunal. It is a legal requirement for tenants to receive a written tenancy agreement called the Private Residential Tenancy Agreement and all landlords are required to register with the local council that covers the area where the property is located as part of the Scottish Landlord Register. Landlords are required to provide information on themselves and the letting agent managing the property (if applicable).

Eviction during COVID-19

Updated guidance on evictions during the pandemic has been issued by the Scottish Government. This includes an extension of the notice period for evictions of 6 months. A new law has made all grounds for eviction discretionary, allowing any tribunals to consider the impact of coronavirus before issuing an eviction order or not. If you require any further help as a private tenant, or you're looking for a property to let, talk to our friendly, professional team today.

Fair Rents Bill (Scotland) Bill

Monday 1st June 2020

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.

Rental Demand Up By a Third

Monday 25th May 2020

The return of the housing market has seen demand for rental property boom - with data from Rightmove showing activity in the first week since the lockdown in England eased, with rental demand on the portal registering at its highest ever in its 20 year history. There is a strong possibility that this will happen in Scotland.

According to Rightmove, almost 23,000 new rental listings appeared on the portal since the first day of reopening, down 10% on the same week last year. However, the total available rental stock is now up 13% since before the lockdown in March.Asking rents have risen 2.1% compared to last year, down from an annual rate of 3% before lockdown. On average they are £1,089 per calendar month across all Great Britain. This new activity on Rightmove shows that home-movers have determination to continue with their plans in the coming months. If you are looking for a suitable rental property, talk to us at Newton Letting and register for alerts.

COVID-19 - Rental Market Rebounds in England

Tuesday 12th May 2020

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?

The last few months have been very difficult for letting agents across the UK with a steep decline in completed tenancy applications but these figures have given property owners hope. The level of demand is vital to agents and we will have to adapt to a 'new normal' when it comes to marketing property to let. It is predicted that over the next few weeks we will see a significant rebound for the market in England once restrictions on moving house are lifted further paving the way for how things could play out here in Scotland. Many moves are on hold at present so we believe that demand is building up each week. Sales will be hit harder than lettings, as people delay getting their foot onto the property ladder and remain renting instead to see how the market is affected over the next six months. Talk to us at Newton Letting if you would like advice, whether you're a tenant seeking a property or a landlord looking to maximise your investment.

The New Normal?

Sunday 10th May 2020

The Government has issued guidance to estate agents, buyers and sellers that more activity should be done online if possible. The new guideline document states "The process of finding and moving into a new home will need to be different given those involved in the process will have to adapt practices and procedures to ensure that the risk of spread of Coronavirus is reduced as far as possible” This 'new normal' will including much of the home seeking and viewing process taken online, including virtual initial viewings. The document also states that “We encourage people to do the majority of their property searching online … To support this agents may ask home occupiers to conduct virtual viewings.” In relation to new-build property sales it advises: “Where possible, developers should promote virtual viewings.” And for conveyancers the guidance says: “Conveyancing should aim to conduct as much of their business remotely as possible. The rest of the guidance concerns social distancing, surface-cleaning and hand-washing, including agents being requested to avoid contact with clients showing symptoms or having been advised to self-isolate, appointment viewing systems, stopping open-house viewings, enforcing 2m social distancing between individuals, clients making their own way to appointments, providing hand sanitising facilities and increasing ventilation by keeping all internal doors open during viewings. See the full guidance. At Newton Letting we will be undertaking all relevant changes to our business practices to adhere to the new rules that will come into force here in Scotland.

Landlord Emergency Loan Scheme Announced

Tuesday 5th May 2020

On May 5th, the Scottish Government revealed details of the PRS Landlord (non-business) COVID-19 Loan Support scheme. It is now open for applications.

The scheme is open for opened for applications for members of SAL (Scottish Association of Landlords). This scheme is a repayable loan rather than a grant it will go some way to help those in need and has enabled landlords to access government support. The loan scheme is only open to landlords of five or fewer properties and the loan can be applied for just one property within their portfolio, even where more than one property has a COVID-19 related loss. The rationale behind this is based on the fact that 95% of Scottish landlords own between one and five properties and that those with more than five properties can spread the risk of non-payment of rent over the larger portfolio and are less likely to require a loan. This is a welcome first step but SAL believes the scheme should be opened up to help every landlords with portfolios of more than five properties if they are financially dependent on rental income and where their tenants are unable to pay their rent or properties are unable to be let due to the COVID-19 crisis. Without support, landlords will be forced into difficult decisions on disobeying lockdown guidance over viewings and move ins or losing their business, thus removing essential housing from an already short supply. SAL continues to make several points to the Scottish Government: Find out more.