the_landlord by xuyuzhu

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									                                                                                        SPRING / SUMMER


                                                                                 2012
                       THE LANDLORD




WE’RE GOING DIGITAL!
    THE REGULAR NEWS UPDATE FOR PARAGON MORTGAGES AND MORTGAGE TRUST CUSTOMERS

    PRS TRENDS Q4 2011

    MEET YOUR MORTGAGE SERVICING TEAM

    FEATURE EAST MIDLANDS TOPS THE YIELDS TABLE
      HELLO
      WELCOME TO THE LANDLORD
      It has been a busy start to the year with landlords reporting
      increasing tenant demand and intermediaries seeing a rise in
      buy-to-let mortgage applications. Data published by the Council
      of Mortgage Lenders (CML) also revealed that the final quarter of
      2011 saw a 40% increase in the value of buy-to-let lending, a sure
      sign that we are well on the way to recovery.
      In this edition you will find a mix of industry news, key facts from our
      research reports, the latest yield figures and an exclusive reader competition.
      Also, as of 2013 The Landlord will be going digital! So to continue to receive
      your copy register your details at www5.paragon-mortgages.co.uk
      Enjoy the issue and if you would like to send me your views on any of the articles
      email thelandlord@paragon-group.co.uk *
      John Heron
      Director of Mortgages

 *Please note this email address should only be used for comments relating to The Landlord, any
 other enquires should be directed via the channels below.
 CONTACT




           PHONE        0845 849 4040 (Paragon Mortgages)              0845 849 4055 (Mortgage Trust)
           EMAIL        pmlenquiries@paragon-group.co.uk               mtenquiries@paragon-group.co.uk
           INTERNET www.paragon-mortgages.co.uk                        www.mortgagetrust.co.uk




ONE IN FIVE HOMES WILL BE RENTED IN 2016
A report published by estate agents Savills, shows that rents will continue to rise as competition for rented homes
increases. Forecasts suggest rents are set to rise by 20.5% by the end of 2016. This growth is more than three
times the growth predicted for house prices, which sits at just 6% over the same time period.
The report also forecasts a rise in the number of privately rented homes saying they will account for one in five
households by 2016. With demand for rented properties showing no sign of slowing down in the next five years, it
is unlikely that there will be sufficient supply to meet this level of demand.
Julian Rance, Sales Director, said: “It is not surprising rents are forecast to rise in the next five years as tenant
demand is increasing at a rate never experienced before in the PRS. In order to help meet this demand lenders
need to make it as easy as possible for landlords to access a variety of mortgage finance options that suit their
individual needs.”




    WE’RE GOING DIGITAL!
    From 2013 The Landlord is going digital. To
    continue to receive your copy register online
    at www5.paragon-mortgages.co.uk
PRS TRENDS Q4 2011
66% of landlords think arrears levels will remain stable in 2012




37% of landlords                Q3
saw an increase in
rental income in Q4             Q4
                               Landlords’ porfolios increased from 12.7
                               properties in Q3, to 14.3 properties in Q4




                                              39%
                                                                                                                                     FEATURE EAST MIDLANDS TOPS THE YIELDS TABLE
                                              average gearing

                                                                                                 MEET YOUR MORTGAGE SERVICING TEAM



                               2.9 weeks
                               average void period for Q4
                                                                            PRS TRENDS Q4 2011




50% of landlords said tenant
demand was either ‘growing
or booming’
                            ENERGY BILL IS PASSED
                            From 2016 landlords will not be allowed to refuse
                            reasonable requests from tenants for energy efficiency
                            improvements, and from 2018 it will be illegal to market or
                            let properties with an energy efficiency rating of F and G.
                            Under the new Energy Bill, the Government has also announced a target of all properties
                            being rated A by 2030. By setting a 2018 deadline, the Government has given a degree
                            of regulatory certainty to the sector and enough time for landlords to make improvements
                            during periods when the property is unoccupied.
                            Landlords will be able to apply for a loan through the Green Deal which will then be
                            repaid as a levy on utility bills – which are usually paid by the tenant. It is anticipated by
                            the Government that the new changes will improve efficiency across the PRS, reduce
                            landlords’ maintenance costs and improve the quality of properties for tenants.
                            Despite initially being met with a level of caution across the industry, figures released in
                            2011 by the NLA revealed that two thirds of landlords would consider taking advantage
                            of the Green Deal to improve properties in their portfolios.
                            However, landlords who fail to act upon a reasonable request by a tenant for efficiency
                            improvements after 2016 can be ordered to do so by local authorities and could face a
                            potential fine.
                            The Department for Energy and Climate Change is also looking to present secondary
                            legislation before Parliament, which will be followed by industry guidance being prepared
                            in early spring. The first Green Deals are due to appear in the early autumn.

                            For more information on the Energy Bill visit www.decc.gov.uk


We’re going green too!
From 2013 The Landlord will be going digital. To continue to receive your
copy register at www5.paragon-mortgages.co.uk




FLOOD OF WATER DEBTORS
The non-payment of water bills has been hitting the headlines, with a reported £1.6 billion in unpaid water charges
in the UK. Currently, the occupier of the property is liable to pay the water bill, however, the majority of water
debtors are tenants in rented properties.
The story is causing some debate amongst landlords as new leglislation was passed in 2010 meaning that
landlords in England may be required to pay for water charges unless they can prove someone else is liable.
However, landlords are not duty bound to provide water companies with tenant’s details, and many are concerned
with breaching the Data Protection Act.
If a tenant is experiencing financial difficulty which is contributing to water bill arrears, they should talk to their
landlord and seek independent advice from a service such as Citizen’s Advice.




   The NLA is currently responding to this issue on behalf of its members,
   visit their website for more details www.landlords.org.uk
MEET YOUR MORTGAGE SERVICING TEAM
The servicing team look after Paragon Mortgages and Mortgage Trust
customers and are your first point of contact for any information relating to
your account.

Our team can assist you with a variety of tasks
including:                                                        Who is the longest serving
                                                                  member of the team?
  Producing and sending out statements - you can also do
  this online at www5.paragon-mortgages.co.uk                     Louise Boden - she has been with
  Managing your payments                                          the company for more than 20
                                                                  years!
  Liaising with your solicitor about complex legal transactions
  Changing your personal details on your account                  Who is the newest member?
                                                                  Andrew Pitchford who joined us
About the team                                                    six months ago
The team is led by Benn Chatt, from New Zealand, who              Fun facts about the team:
has been with Paragon for five years and is responsible for
managing and overseeing the team’s work.
                                                                  We have a black belt in Tae Kwon
                                                                  Do, a New York Marathon veteran,
Benn said: “My team are the first people to pick up the phone to   and one member who has climbed
our customers when they call. We are able to help with a wide
                                                                  Mount Kilimanjaro! We’re an active
variety of tasks and would encourage customers if they have a
query or need some information about their account to get in      bunch!
touch, we’re always happy to help!”



CONTACT THE TEAM
For Paragon Mortgages’ enquiries call 0845 849 4060 or email pmlcs@paragon-group.co.uk,
and for Mortgage Trust call 0845 849 4050 or email mtlcs@paragon-group.co.uk




                                                                                                                                           FEATURE EAST MIDLANDS TOPS THE YIELDS TABLE
                                                                                                       MEET YOUR MORTGAGE SERVICING TEAM
    HAS YOUR TENANT LOST THEIR JOB?
    As unemployment levels remain high across the UK, landlords continue to be
    affected by tenants who lose their jobs.
    It can however, make more business sense to find a way to keep an existing tenant in the property, and avoid extra costs
    of advertising and prolonged void periods.
    Landlords are also advised to keep in regular contact with their tenants to ensure that if there is a problem it can be
    highlighted early and measures put in place to protect both the tenant and the landlord.
    Tenants who lose their jobs and are experiencing financial hardship may be eligible to claim Local Housing Allowance
    to cover their rent. Landlords can advise their tenants to contact their Local Housing Authority to find out whether they
    are eligible to claim support.



      For more information visit:

      Local Housing Authority                                                           www.direct.gov.uk
      Citizen’s Advice                                                   www.citizensadvice.org.uk
      National Landlords Association                                             www.landlords.org.uk




TOP TIPS FOR MINIMISING RENTAL ARREARS
Rental arrears in the buy-to-let market have remained stable in recent months, even
declining slightly in 2011 compared with the owner-occupied market. But what
should you do if you are worried about a tenant falling into arrears? Take a look at
our top tips on how to help minimise the risk.
1    Professional tenant referencing – get to know a tenant before you let the property to them

2    Have a good rental guarantee in place

3    Good quality tenant and property management - happy tenants tend not to go into arrears!

4    Be sympathetic to tenants with temporary payment issues, helping them find a solution helps everyone involved

5    Understand and know how to access housing benefit for tenants in difficulty

6    Make realistic provision for voids and rental arrears when considering mortgage affordability

7    Most importantly, keep the lines of communication open! Talk to your tenants, identifying a potential issue sooner rather
     than later can save everyone time and money




Q4 survey of ARLA members revealed 39% of tenants were in some level of rental arrears in 2011
EAST MIDLANDS TOPS YIELD TABLE
Independent research commissioned by Paragon Mortgages, revealed that rental
property in the East Midlands generated an average yield of 6.4% during quarter four
2011. The region has taken first place from their West Midlands neighbours - which
dropped to eighth place in the yield league table.
The South East (excluding London) came in second place
with a yield of 6.1%, followed by the South West with a yield
of 6.0%. The high yields generated in the South reflect the
strong level of demand for rental property in these areas.
Paragon Mortgages worked with independent researchers
BDRC Continental in conjunction with the NLA, to survey
more than 500 landlords during the last quarter of 2011.
Paragon customers who took part in the survey reported an
average yield of 6.9% for Q4 - higher than the market average
of 5.9%.
The survey also revealed that the highest yielding property
type is a detached house, generating an average yield of
6.6%. This was followed by a terraced house and HMOs
(House in Multiple Occupation) which generated yields of
6.1% and 6.0% respectively.
John Heron, Director of Mortgages, said: “It is interesting to
see the shift in the regions taking the top spots in the yield
table.
“As we progress further into 2012, I suspect we will continue
to see changes in yield patterns and how different regions
fair against each other. With demand still at a peak I believe
landlords will continue to achieve healthy yields in the coming
months.”

                                                                  11




                                                                                                             FEATURE EAST MIDLANDS TOPS THE YIELDS TABLE
  1      East Midlands                               6.4%                      12
  2      South East (excluding London)               6.1%
                                                                           5
  3      South West                                  6.0%
                                                                                        10
  4      London (outer)                              5.9%
  5      North West                                  5.9%
                                                                                        1
  6      Wales                                       5.8%
                                                                                    8                    7
  7      East of England                             5.7%
                                                                       6                         9
  8      West Midlands                               5.7%
                                                                                             4
  9      London (central)                            5.6%
                                                                                                     2
  10     North East                                  5.2%                      3
  11     Scotland                                    5.2%
  12     Yorkshire and Humber                        5.2%
     EXCLUSIVE COMPETITION!
     REGISTER FOR ONLINE SERVICES AND
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     Did you know you can now access your
     account online? This new service helps you
     save time and makes managing your account
     much easier.
     By signing up for online account services during April,
     we’re offering one lucky landlord the chance to win £500
     Amazon vouchers!* All existing Mortgage Trust and Paragon
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         Already registered for the online account service?
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     *The winners will be chosen at random, terms and conditions apply, full details
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                                                                                                                             Paragon Mortgages
                                                                                                                                 t 0845 849 4040
                                                                                                                                 f 0845 849 4041
                                                                                                              e pmlenquiries@paragon-group.co.uk
Calls may be monitored and recorded for training and security purposes. Call charges apply to UK                 w www.paragon-mortgages.co.uk
landline destinations. Mobile phone users should contact their service provider for information about
call charges.

The information provided in this magazine is designed to keep readers abreast of current developments
                                                                                                                                 Mortgage Trust
but is not intended to be a comprehensive statement of law. No liability is accepted for errors or opinions
it contains. Any legal analysis or other information in this magazine are matters of opinion only, should                        t 0845 849 4055
not be taken as a definitive statement of law or a recommendation and should not be relied upon. You
should seek detailed legal or other advice on any of the issues raised.                                                          f 0845 849 4051
All the external internet site addresses and telephone numbers featured in this magazine are here to          e mtenquiries@paragon-group.co.uk
help you achieve your goals, whatever they may be. However, inclusion of companies or organisations in
this magazine does not constitute an endorsement of their products and services. Accordingly, readers                  w www.mortgagetrust.co.uk
are advised to satisfy themselves as to the suitability of any organisation mentioned in this magazine.

Paragon Mortgages St Catherine’s Court Herbert Road Solihull West Midlands B91 3QE.
                                                                                                                                    FMNL6178 (02/2012)

								
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