The Magazine of The ScoTTiSh aSSociaTion of LandLordS landlordfocus issue 3 | scottishlandlords.com Tenancy deposits WhatÕs in store for us? The big issue Local authority work on homelessness Dundee going strong City looking good for the private rented sector In association with finance | Policy | Local housing allowance | Update | helpdesk | Training Welcome online www.scottishlandlords.com Funny students, serious issues best returns so we look after them. outlines some of the initiatives. judith We are part way through our autumn series of local branch Whether you are now a loyal reader of Landlord Focus or this is dunn meetings. It’s always great to get the first time you’ve picked it up, editor out and about, speaking direct to we do aim to provide articles and members. Last week I met the first information to interest and inform class to take part in the SAL Port- you. Our articles are all specific I ’m delighted to introduce the able Appliance Testing course. I’m to Scotland – we believe this to be new issue of Landlord Focus, glad to report a 100% pass rate for crucial with the political and legis- the magazine of the Scottish these Glasgow members. lative landscape differing so from Association of Landlords (SAL). At the time of going to press we the rest of the UK. We support our Autumn’s here and for my letting have just had the unwelcome news members from all over Scotland by business we are just over student that the Scottish Government does campaigning, lobbying, informing, move-in time. There is usually plan to go ahead with a tenancy assisting and advising you as you something we can laugh at. This deposit scheme here, against the run your huge variety of property time it was sending my plumber wishes of many organisations businesses. From those letting a to repair the “toilet that did not fill involved in the consultation. John single city flat to the managers of after we flushed it”. Blackwood, our policy and par- the largest portfolios – we’re here He reported that it was an easy liamentary affairs specialist offers for you. repair – simply turning the water his comments. We invite member back on at the mains. The resi- feedback on this and the other is- With best wishes dents, in their first time away from sues we face together as the regula- Judith Dunn home or halls had “accidentally” tions become ever more onerous. turned it off. Same young tenants Soon 2012 will be with us and Please email us on info@scot- the next night “had no heating or Scotland’s local authorities will be tishlandlords.com if you have hot water” – turned out they had expected to have met tough targets any comments or ideas for your turned that off at the control panel on homelessness figures, including magazine. Updates to information too, having carefully watched my engagement with us, the private will always be emailed to mem- demo of how everything worked. rented sector. Landlord Focus bers and available on our website Still, students in HMOs give our looks at the progress to date and www.scottishlandlords.com Landlord Focus Scottish Association Contents: Issue 3 of Landlords 22 Forth Street 05 Finance renting out his own flat and is Edinburgh EH1 3LH Experts offer their views on now a successful developer 0131 270 4774 property finance email@example.com 25 Keeping track 06 Policy Get utilities bills to the right Editor Judith Dunn Deposit scheme that’s good for place with iammoving.com Design Gavin Munro neither landlords nor tenants Advertising Kirstin Norrie 27 Landlord training 07989 227994 09 In focus: Dundee The training needed for a firstname.lastname@example.org Private rented sector professional approach prospects look good in the city Printed by Scottish County Press. by the Tay 29 Update Views expressed in Landlord Rental law, holiday lets, the Focus are not necessarily 10 Local authorities 19 Seascape South Ayrshire proposed building regulator those of the Scottish Association How councils are planning to One charity’s frustration with of Landlords. meet homelessness targets the local housing allowance 33 Helpdesk www.scottishlandlords.com Tenants’ insurance, 15 Cannabis threat 20 Membership information blocked sinks, Cover Photograph: When your rented property is The benefits of belonging to TV licences VisitScotland Angus & Dundee turned into a drugs farm an organisation that puts your case and fights for your rights 34 AB Group 16 Carbon monoxide Cannabis Spreading awareness of the 23 Landlord story farming – the dangers to tenants David McLennan started by warning signs issue 3 | Landlord focus | 3 landlords... relax with guaranteed rent Our new letfirst scheme urgently requires 1 BED properties for our large bank of waiting Tenants We also have demand for central 2, 3 & 4 bed properties Call today... 0131 553 0088 orchard & shipman Finance Subject of great interest Members report that suitable finance is becoming harder to find. Landlord Focus asked Edinburgh mortgage broker Gonalo Mateus and Kennedy Foster, policy consultant, Scotland, for the Council of Mortgage Lenders for some answers W ith the low base rate, why are buy-to-let (BTL) rates 5% or more with huge arrangement fees? Gonçalo Mateus (GM): Much past BTL lending, particularly in 2007, was reckless therefore some BTL mortgage The Bank of Where are rates going over the next six, to rise too. This is not expected in the books have defaults and repossessions England holds 12 months and what will they be in five rest of 2009 but probably during 2010. above the average. the fate of all years? Interesting to note that the low rates are The funds banks borrow are more borrowers in its GM: Rates will be the same for the next why repossessions have not yet reached expensive than before. To balance lend- hands 12 months, even if the base rate rises the predicted high levels. ers’ mortgage books, the higher funding (something I don’t believe will happen costs, the lack of competitiveness in the any time soon). In five years, the bank Will the current 75% loan to value BTL market and the need to recapitalise base rate will be higher for sure, as with (LTV) maximum for BTL become the after huge losses; these all consequently the expected recovery of the economy norm? affect the rates. the Band of England will need to control GM: This is caused by the housing Kennedy Foster (KF): There is a really inflation and keep savers happy. slump. Lenders were and are afraid good crib sheet on this on the British However, the rates will be fairly similar. of negative equity. BTL properties are Bankers’ Association website: www. When the recapitalisation of the banks thought more difficult to sell in case of bba.org.uk/content/1/c6/01/66/09/ has happened, the profit margin on a repossession, and they can incur losses Cost_of_Funds_BankFact_-_FINAL.pdf. mortgage should return to the more when sold. This will be the norm for a Basically, lenders are having to pay more normal level of between 0.15% and 1% while until the property market stabilises for their money and this is reflected in whereas currently with London Inter- and prices rise again. the rates they are lending out at. Lenders bank offer rate so low, the spread is now KF: Likely to be yes because the lend- do not want people to be able to break between 2% and 5%. ing criteria have tightened so much as a out of the agreed fixed rates. Supply This will affect the rates in five years consequence of the shortage of funding and demand have become much more as the banks will reduce their profit last year. Again, there are some signs of equal now, whereas before demand was margins as they will no longer need to easing such as recent indications that outstripping supply. recapitalize, maintaining the same rates HSBC has some additional money to I believe this will change but it is not or slightly higher but probably with be loaned into the home buyer market. going to happen overnight and I am not no-one would lower arrangement fees. Property prices appear to be stabilising going to predict the future. What I can make a five- KF: I will not be making a forecast and that has an impact. say with confidence is that I would be year interest but and no-one would make a five-year very surprised by a sudden return to the prediction Ð interest prediction – obviously there is What can be done to ease lending? conditions existing in 2007 where credit no way rates can go down. What will GM: Not much more can be done, we was so very cheap and in such ready obviously there happen will depend on the Bank of Eng- are seeing some easing but the lenders supply. Any improvement will be a is no way rates land’s measures taking effect. If inflation gradual easing. can go down begins to show a rise then rates are likely Continued on page 25 issue 3 | Landlord focus | 5 Policy Sledgehammer to crack a nut! The proposed Scottish tenancy deposit scheme is more trouble for landlords and little help to tenants john blackwood Policy and Parliamentary aFFairs T he report on the Scottish Gov- ernment review of the private rented sector states: “A significant minority of tenancy deposits appear to be withheld, whether legitimate or not.” It goes on: “Evidence from the statutory schemes in England and Wales suggests that between 40% and 50% of complaints by tenants are unjustified and the landlord had acted reasonably by withholding their deposit. If this figure was similar in Scotland, then it would suggest that the actual amount of wrongly withheld deposits may be between £2.2 million and £3.6 million per annum, due to between 8,000 and 11,000 tenants.” The research estimated that landlords in Scotland have around £64 million What our members say about the introduction of a tenancy deposit scheme in tenancy deposits, so as a proportion, i couldnÕt believe the news as a landlord with property 8-10% and not charge a de- SAL hardly thinks that this is a signifi- when i heard it! What was that in england as well as scotland i posit. this way iÕll get to keep cant problem. We have always argued all about when the minister know that many landlords donÕt the extra income and not need against such a scheme on the basis that addressed salÕs conference use the schemes south of the to use a deposit scheme. i hear further regulation of private landlords and said he recognised that border and nobody does any- landlords can sell this to their would be disproportionate and actually the majority of landlords did thing about it. new tenants as Òno deposit re- do little to safeguard tenants from being a good job and then goes and John Muir, Arbroath quiredÓ offers in their adverts ripped off by unscrupulous landlords. introduces yet more costly leg- which is attractive to many Despite all of this, in September, the islation that only good landlords looks like i will follow what people who donÕt have all the Scottish Government announced its will sign up to? many english landlords already money upfront. decision to press ahead with introducing Ann Brown, Livingston do Ð put up the rent by around Gill Hastings, Inverness a national tenancy deposit scheme. So now landlords in Scotland will soon face yet another set of regulations affecting out the sector altogether. As we know, schemes that we know a minority will our landlord practice. landlords in England have been operat- never sign up to? Sadly the ultimate Our concern is that once again we will ing under a tenancy deposit scheme victim is the tenant who in order to let see legislation to tackle the minority of since 2007. Although a formal review from the good landlord will have to landlords who operate unlawfully or at of the scheme has yet to be undertaken, pay higher rents and probably opt for best operate bad practice, to the cost of SAL understands that only 75% of ten- the alternative: rent from the landlord those of us who pride ourselves in pro- ants’ deposits are covered, indicating who is unregistered, not signed up to a viding a good landlord service and take that rogue landlords are still operating in tenancy deposit scheme and probably our legal responsibilities seriously. England and Wales and tenants’ deposits not interested in carrying out repairs SAL fears that as with landlord regis- are, in those cases, still unprotected. but who, without these added costs, can tration, little will be done to enforce the charge a lower rent. legislation. Despite the good intentions Tenants are the victims SAL members are only too aware that of politicians and tenants’ lobby groups, The fear for the future of the private there is bad tenancy management out the risk is that tenants’ deposits will rented sector in Scotland is that good there and that some rogue landlords not be any better protected by such a landlords will see yet further regulation are only too willing to rip-off tenancy scheme. What matters to as a sledgehammer to crack a nut. They deposits. At the risk of sounding cynical, SAL tenants is what may opt to leave the sector altogether, However on listening to our tenants’ argues that the way to tackle bad land- the rent is going leaving the way open for rogue opera- tales of past experiences, we know that lord practice is to enforce the legislation to be and where tors seizing their opportunity to prey what really matters to them is what the we have rather than introduce yet more they want on vulnerable tenants and continuing rent is going to be and where they want bureaucracy on law abiding landlords. to avoid any form of regulation. In to live. It is those factors that will make Landlord registration offers an appro- to live – not tough economic times how can we them decide on where to set up home priate vehicle not only to tackle rogue protection for justify spending more of our own and – not that their tenancy deposit is pro- landlord practice but also to force them their deposit taxpayers’ money on introducing more tected by a tenancy deposit scheme. 6 | Landlord focus | issue 3 in focus: dundee Dundee lettings are booming hans Musil What do the next few months hold for the lettings market in ScotlandÕs fourth largest city: Dundee? Landlord Focus offers some pointers H eld back by the current national credit crunch and on-going housing slump, many movers who would usually have bought their own properties in Dundee are now renting. “There are two universities and a teaching hospital in Dundee so there is no shortage of tenants,” explains proper- ty management agent Nick Horan from Belvoir Dundee. “This in turn means there is a significant shortage of all types of rental property in Dundee – especially one and two bedroom flats. “We have tenants waiting and we get more enquiries for these types of property every day,” he continues. “For example, despite all the building going on, one of the universities called us this week to say that all their accommoda- tion was full and that they had 300 students they were going to send us this weekend.” Looking to invest? With a lettings market characterised by more tenants looking for accommoda- tion than there are properties available number of new purpose-built student Dundee and the experienced any significant voids yet. to house them, what properties should flats may start to have an adverse effect Firth of Tay from “I am gradually moving my portfolio Dundee landlords invest in to best cash on the letting of older HMO [house in Dundee Law from furnished to unfurnished lets and in on the growing demand? multiple occupation] properties,” says this doesn't seem to be having any ad- “The general rental market has Richard. “However, there is evidence verse effects. Feedback so far seems to be remained healthy, with good qual- that some students shy away from these positive in that they can put their own ity tenants being available for well properties, feeling that they are too mark on the property and make it feel presented properties,” says landlord institutionalised – effectively student more like home.” Richard Burnett. Areas currently in residences by another name.” demand by tenants are the West End and Landlord Maria Di Ponio of MDP Ninewells, as well as properties close to Properties shares her experiences of hav- At a glance the universities and accommodation in ing a property portfolio in Dundee... Dundee ... at a glance What is the average the waterfront developments. “Broughty “I feel that the lettings market in Dun- by Belvoir lettings expert rental return for a one/two- Ferry is also still an easy area to let in, dee is a strong as ever if you are willing Nick Horan bed? Anywhere between having performed consistently well for to provide good quality properties with £400 and £700 for a two- many years,” adds Richard. However all the modern essentials. Which areas are cur- bed, depending on location. as with many property professionals, “Tenants have raised expectations rently in demand by ten- A one-bed would achieve the banks so necessary for business to now. This is a good thing all round and ants? Central, West End £300 to £450 on average prosper are reluctant to lend, much to hopefully, along with landlord registra- and Ninewells per month the frustration of landlords. tion and accreditation, the quality of Nick of Belvoir Dundee adds, “We find rental housing will improve and with What sort of properties Which area is likely to that furnished and unfurnished proper- this, public opinion of our sector in are letting easily? One and show the most growth? ties are popular in Dundee but we tend general. two bedroom flats and Probably the East End to find that smaller properties attract “I mainly let to young professionals small houses tenants who want their accommodation and my properties are all tenement flats. Which area furnished, whereas tenants looking for These seem to still be very popular and and, to what sort is likely to larger properties just want white goods.” each ad is still receiving an acceptable of tenant? Students, slow down? So, is the high demand for lettings in level of enquiries. I do find that tenants young professionals Possibly Dundee likely to continue? are perhaps taking slightly longer to and small families Hilltown “In the centre of town the large decide on a property but I have not issue 3 | Landlord focus | 9 local authorities Help for the most vulnerable Targets for moving towards a new homelessness regime in Scotland have been missed but many councils are engaging with the private rented sector I n 2005, ambitious plans to revolu- The Scottish Government has put tionise homelessness legislation in forward proposals to the Treasury – so Scotland were unveiled by the Scottish far without success – which may encour- Government. By 2012 all unintention- age more building of PRS homes. These ally homeless people in Scotland would include tax breaks for real estate invest- be entitled to a permanent home. This ment trusts and venture capital trust would abolish the “priority need” test schemes, and for smaller scale landlords, which has been central to homelessness temporary reductions in VAT to 5% for assessment since the 1970s, under which housing repairs and renovations. most single people and childless couples have no right to permanent housing. Vulnerable and risky Edinburgh Coun- such strategic development work is The half-way point in the process has So, what are Scottish councils doing to cilÕs Waverley ongoing, and there is scope to help shape been reached and figures from the Scot- engage with the sector and encourage Court offices. local activity in relation to the PRS. SAL tish Government show that in 18 of our landlords to let their accommodation to The authorityÕs is happy to work with councils and put 32 local authority interim targets have a tenant group often perceived as vulner- private sector across the views of our members. not been met. able and financially risky? engagement, Aberdeenshire Council has been work- If targets are to be met, services to Key areas where local authority may including Let- ing with the PRS for some time and prevent homelessness and measures to become involved are; wise, is widely it recently launched an accreditation increase the supply of affordable housing • Information to landlords, tenants and acclaimed as best scheme in partnership with Landlord need to be stepped up. A major house- agents; practise Accreditation Scotland. The council is building programme by local authorities • Practical services to landlords and considering options to further use the and registered social landlords was agents – forums, seminars, conferences, PRS for those in housing need. central to this vision, but imminent landlord days, discounts from suppliers; Glasgow’s Rent Deposit and Support government spending cuts, cuts already • Landlord accreditation schemes; Scheme (GRDSS) is a charity funded by made to housing association grants and • Reassurance to landlords through city council and the Scottish Govern- a shortage of finance because of the contact points for housing benefit/local ment. It helps those who are homeless or credit crunch has left serious doubts that housing agreement (LHA)enquires, potentially homeless access high quality this can be achieved. tenant referencing services, vulnerable private rented accommodation, working Graeme Brown, director of Shelter tenant support and dispute resolution/ with landlords in the private sector. Ini- Scotland, the homelessness charity, mediation; tially a six-month short assured tenancy warns that: “The responsibility placed • Using private lets as temporary accom- is offered, renewable for a further six to on councils is not being matched by modation, in particular, private sector 12 months if all goes well. About 240 progress on the building of the 10,000 leasing (PSL) schemes (see panel, right), Where the ten- tenancies are created each year and there new affordable homes to rent that Scot- and as settled, longer-term accommoda- ants are unable are plans to expand the scheme. land needs.” tion, particularly through rent deposit to pay me a Most tenants are vulnerable and have This makes the contribution of the and guarantee schemes (see page 13). deposit, if the support needs (provided by GRDSS) privately rented sector (PRS) all the There are numerous examples of good tenancy has and in most cases LHA is paid directly more important. The sector provides 8% practice, but there are also councils for to the landlord. Tenants are encouraged of the housing stock, almost as much as which looking at the whole of the hous- been running to save for a deposit, but generally, if the the social rented sector does at 11%. In ing market is relatively new and engage- well, thereÕs no Edinburgh the PRS is 17% of housing. ment with the sector minimal. For most, reason to end it Continued on page 13 10 | Landlord focus | issue 3 Quick guide Private Sector Leasing Schemes To increase their provision of ods, management and advertis- homeless accommodation, coun- cils are increasingly looking to ing fees are taken into account this can level out. Many DIY Are Rolling Out The lease properties from private landlords. They let these on to landlords with good management would not normally expect to lose Red Carpet Out For You! homeless applicants until a set- 15% so it may not offer such a tled housing solution can be good deal. As with all business Landlord Focused found. Such schemes are usually decisions, do your sums before Residential Property Management formal and can be run in-house deciding whether PSL is for you. by the council, by the voluntary The cost of PSL to the public sector or by a commercial firm. purse is high, though it works out Professional Service at For landlords there is the cheaper than bed-and-breakfast Very Competitive Rates! advantage of a long contract, and is more appropriate for fami- usually three to five years with lies. The schemes are financed No Let No Fee! a guaranteed rent, often in ad- wholly or partly through housing vance. Void periods, if they arise benefit. The average cost per have no effect on income. In ad- month for a two-bedroom proper- Satisfaction Guaranteed! dition, day-to-day management is ty can be around £900 including taken over by the leasing scheme rent to the private landlord plus For Expert Property Management Visit: and at the end of the leasing pe- service and management charg- riod the property is reinstated to the condition it was taken on in, es. This raises important issues of affordability for those who are www.abacusproperty.co.uk 0131 661 5769 apart from normal wear and tear. employed on low incomes, who The downside is that rents are will face significant challenges typically 10-15% below market escaping the poverty trap while levels, although when void peri- staying in the PSL home. You Can Count On Abacus! issue 3 | Landlord focus | 11 16 LANDLORDfocus Relax has it covered Citylets is the premier rental network for property advertising in Scotland & Northern Ireland. 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Since 2004, following deposit, if the tenancy has been running recommendations from the well there’s no reason to end it.” Homelessness Task Force, all local Sandy Middleton, who lets six proper- authorities have had a duty to ties said: “I look for three things; the rent provide access to such schemes, is paid, the place is looked after and the and about 28 are in place in some neighbours are happy. I see no reason not shape or form. to continue with a tenant if it’s going well.” They can be run by local authorities, voluntary organisations Support service or private companies. Orchard & Shipman, the property Schemes do vary, most give services company, manages PSL schemes landlords some financial security on behalf Edinburgh, Midlothian, East against damage or theft and some Lothian and Scottish Borders councils cover non-payment of rent: with just under 2,000 short to medium Some act as independent term lets to people in housing need. The bodies, safeguarding the money on scheme is the largest in Scotland – the 14 behalf of the tenant and landlord. other PSL schemes, mostly managed by Flats at Shettle- of mind that the tenant is supported. Although not strictly about local authorities, have about 500 tenan- ston in Glasgow. Over the past four years Falkirk Coun- improving access, they could lead cies between them. The Glasgow Rent cil has worked with the PRS through a to increased confidence in the The schemes use housing benefit to Deposit and Sup- landlords’ forum, delivering informa- sector, making it more attractive help fund rental, service and manage- port Scheme is a tion and training on new legislation and as an option for both tenants and ment costs. Landlords are paid the charity backing private sector tenancy law and develop- landlords. agreed rent, typically 10-15% below the vulnerable ing a voluntary landlord accreditation Others provide the deposit LHA levels, quarterly for the term of the homeless scheme. It is committed to developing a money to landlords directly and agreement, usually three to five years. PSL scheme. Clackmannanshire Council should any of the deposit not Andrew Morrison, director of policy have recently partnered with SAL to be returned, a loan covering the and business development said: “PSL is provide various landlord services. An- amount withheld is then repaid by hugely attractive to landlords as their nouncing this, Susan White from Clacks the tenant to the scheme. properties are managed professionally Council said: “We are delighted that SAL A bond guarantee covering and their income is guaranteed” has come on board to help us improve the equivalent of a monthÕs rent Orchard & Shipman’s most recent support to local landlords in this unique may be given to the landlord and initiative, Letfirst, aims to prevent home- venture”. should any part of the deposit lessness by increasing the availability of For landlords housing these clients, need to be withheld, a claim is accommodation in Edinburgh for those there are still a number of key areas of made against the fund. on benefits and without access to a de- concern: Some schemes also provide posit. Landlords are offered six months’ • Many are private individuals, often a tenant-finding service, guide guaranteed rent, minimal void periods with only one or two properties financed landlords on their rights and and professional support to the tenant. If via buy-to-let mortgages. For all land- responsibilities, provide tenancy the tenancy works, it can be renewed as lords but for them especially, receiving support and ensure benefit most tenants are looking for long-term rents on time is crucial and direct pay- claims are vetted by trained staff, homes. The management fee is 15%. ment of LHA in most cases rather than minimising delays in benefit Letfirst targets landlords with one and exceptionally would do much to encour- payments. two bedroom properties as this is where age landlords to house homeless clients. There are numerous examples most of their demand is. • More needs to be done to encourage of well organised, successful Orkney Islands Council has measures the Department of Work and Pensions schemes, but overall the in place involving the PRS. Recent to relax the rules on direct payment and contribution of such schemes has developments include Orkney Lets, local authority housing benefit depart- been considered modest and the where landlords can advertise vacancies ments should deem more claimants to Scottish Government established free. It also run an in-house rent deposit be vulnerable, allowing direct payment a working group which has been scheme to prevent homelessness. It pays from the start of the tenancy. looking at various options for a the deposit to the landlord and the ten- • Rent deposit schemes where landlords national scheme. It is anticipated ant repays what is in effect an interest- PSL is hugely receive the deposit up-front rather than that a discussion paper will follow free loan to the council. as a guarantee bond are also preferable early in 2010. First signs from an evaluation just attractive to to many landlords. begun of Dundee’s Homefinder Rent landlords as • The need for a landlord to have a des- Deposit Guarantee Scheme are positive. their properties ignated point of contact for all enquiries Funded by Dundee City Council and are managed to councils is increasing. managed by Dundee Cyrenians, it offers profession- landlords an initial assessment as to the What is your experience? suitability of the applicant, reference ally and their How is your local council doing? checks, all lease documentation, a bond income is Any comments please email guarantee for a month’s rent and peace guaranteed firstname.lastname@example.org issue 3 | Landlord focus | 13 Comprehensive Full Management package available from Professional JUST 9%(+VAT) Property Management Let Only options starting at JUST £250(+VAT) www.click-let.com Personal, proactive 0131 555 1704 service, specifically designed to meet YOUR Click-let Ltd needs! 123 Leith Walk Edinburgh EH6 8NP Friendly, professional team boasting over 50 years combined industry experience Edinburgh ● Fife 14 | Landlord focus | issue 3 cannabis threat Risks of being grassed up… Criminals are renting properties to convert them into cannabis farms C annabis growing is big business and organised criminals are doing this right here in Scotland. We have reports of this from members in Perth and Glasgow including one mem- ber’s story as below. The main problem is that the person basis, and will often void the policy. See p38 for I arranged a routine inspection – my who views the flat, pays the deposit and It is worth noting that even with a insurers advice husband and I both went to the prop- so on can seem completely respectable. successful claim, insurance companies on this. erty. Nothing seemed amiss. Periodically Many of us judge potential tenants posi- do not pay for the removal of growing when I was in the area I would check the tively from the first impression. These equipment or soil – classed as the ten- exterior of the house, front and back, can be a “front couple” who are not ant’s contents. They will also not pay for for any signs of extra ventilation having necessarily the people who come back to damage to the doors if the police, with been added or covered windows. grow the illegal drug. an arrest warrant, have forced them. Out of the blue about 10 months into Properties can quickly be converted to Therefore, it pays to protect yourself the tenancy, I had a call from the police suit large-scale production of cannabis. with thorough tenant vetting and regular asking me to go to the property to make This can even include removal of walls inspections. good the door that they had smashed and damage to the electricity installation If you are a landlord suspicious that when they raided the house and found and supply. this could be happening in your prop- a cannabis farm in the attic. I had not Claims executive Andrew Higgins of erty, it is advisable to contact the police checked the attic during my inspection – Alan Boswell Insurance explains: “The first before taking any action. why would I?! most shocking fact about landlord’s I was glad that I had not found the properties being used for professional GLASGOW CASE STUDY: farm as I might have been in danger. drug growing is that a house can be Anne Halsey SAL director It transpired that neighbours had no- completely stripped so it is unrecog- and West of Scotland branch ticed a large amount of compost being nisable as a home, and two crops of representative taken into the house but no work being cannabis can be harvested in six months. Some time ago, a SAL member email done in the garden and, having become Before a landlord has even noticed a mentioned the cannabis farm problem suspicious, had contacted the police. problem, the tenants are out, leaving the and gave a contact for more information I gave a statement to the police. One landlord to restore the property ready from the police who provided guidance man was found in the attic – not one of for the next tenants.” to landlords. the tenants. Fortunately, although the Damage can be substantial. The insurer This advised landlords what to look electricity meter had been bypassed and states that the average claim amount to out for as pointers that they may have a few small bits of damage had been date is £17,777. The largest claim paid been approached by tenants who want to done in the upper hallway, the house out since January 2008 was £49,000 and operate cannabis farms from the rental was not badly damaged. The police the largest claim to date was £74,088 in property. had cleared the attic before we were 2003. When I saw this advice, I realised that given back the house so our losses were Boswells adds that a huge problem for I had tenants who fitted the description The police kept not great although we lost a couple of landlords with claims like these is that the police gave – they were young, paid telling me that months rent while we got access back they often state on the proposal form upfront in cash and were renting a four- we were lucky to the house, tidied up the damage and that they take up financial and employ- bedroom house. The tenants I had were as they had re-advertised. ment records, but they have not done so a young family with children but the fact This could have been a lot worse. The in the case of the cannabis growers. that they paid in cash to the bank, not by seen massive police kept telling me that we were lucky This is classed as a material fact, and standing order, and that they were rent- damage to as they had seen massive damage to insurers will decline the claim on this ing a house made me suspicious. some properties some properties. issue 3 | Landlord focus | 15 co awareness & home reports Tenants & CO: the risk Landlords need to know the dangers of carbon monoxide neer’s card to see the photo matches the the leaflet from the news section of www. A charity that supports victims and person in front of them and that the card scottishlandlords.com. their families who have been killed is in date. Turn over the card and make by or are suffering the long-term sure the engineer is allowed to work on CO alarm giveaway health effects of carbon monoxide (CO) the appliance they have called about as CO detector manufacturers are kindly poisoning is calling on landlords to provide not all engineers are allowed to work on offering free CO alarms to the first five detectors in their rental properties. all gas appliances. readers to email. Announcing Carbon Monoxide The provision of CO detector alarms is To win a Fireangel CO alarm please Awareness Week from 16th Novem- required for landlord accreditation and email email@example.com. Find ber 2009, Lynn Griffiths president of should be considered best practice for all out more about Fireangel products at the charity CO-Awareness explained: landlords in all their rented properties. www.fireangel.co.uk. “Carbon monoxide is the most common To win a Kidde CO alarm please email poison in the UK today. The best thing Action: firstname.lastname@example.org. Find any landlord can do is to ensure that • Fit CO detectors in your properties if carbon out more about Kidde products at www. both their service providers and tenants they are not already there; and monoxide is the smoke-alarms.co.uk. Please include your are aware of the dangers of exposure to • Give your tenants a CO awareness most common full contact details and type ‘Landlord carbon monoxide”. leaflet and the contact details of poison in the Focus CO alarm’ in the subject box. The company/engineer that the land- CO-Awareness. UK today. lord employs to carry out their work on Tenant leaflets and information CO Awareness Week event: gas should be registered with Gas Safe. are available free to landlords from Tenants must Thursday 19 November 2009 at the CO-Awareness advises all landlords and LynnCoAwareness@aol.com or call be aware of The Merchants House of Glasgow, tenants to make sure they check the engi- 07715 899296. You can also download the danger West George Street, 10.30-12.30 pm. Market slowdown blurs the picture on home reports Mixed view of effects of from solicitors who believed that the ScotlandÕs house price data home report would damage the property new regime on prices market by discouraging people from Quarter Average Price (£) Number Of Sales H ome reports came into use on putting their properties on the market 2007 (Q4) 158,360 N/A 1 December 2008, mainly to because of the additional cost. With 2008 (Q1) 150,257 27,501 address the issue of potential the housing market and economy as it buyers paying for many surveys on prop- is, it seems to be difficult to point with 2008 (Q2) 155,691 31,026 erties they did not subsequently buy certainty to any adverse impact the home 2008 (Q3) 160,155 25,042 under the “offers over” system. Currently report might have had on Scotland’s there are far fewer properties for sale at house prices and market. 2008 (Q4) 153,623 19,240 “offers over” with the market slowdown Some SAL members report that lenders 2009 (Q1) 140,318 11,800 so it is tricky to assess their true impact. require a second valuation, paid for by 2009 (Q2) 145,553 16,231 Jim Gibson, chairman of RICS Scot- the buyer, and some say that the reports land said: “While there was some cyni- do not always give enough useful infor- Energy Savings Trust data indicates that between 6,000 cism over the introduction of the home mation. Others like the convenience of and 8,000 home reports have been lodged every month report, as there often is when systems downloading them before a viewing. with a total of 62,311 from 1 December 2008 to 13 change, the large majority of feedback September 2009. from vendors and buyers is very positive. Please tell SAL about your experience The full RICS briefing note on home reports that was Home reports make things far more on this topic. MSPs are keen to have prepared for MSPs is available in the news section of transparent for all parties and ensure feedback and the issue was recently www.scottishlandlords.com both sides have realistic expectations.” discussed at the cross-party group on Source: Registers of Scotland There was much criticism of the system housing. 16 | Landlord focus | issue 3 BATTERY Protecting your tenants FireAngel’s 7 year sealed for life and your carbon monoxide alarm will help you meet your ‘Duty of Care’. Vitally, reputation they are reliable, easy to install and cost effective. www.fireangel.co.uk To make sure you are using the market leading safety products call 024 7623 18 | Landlord focus | issue 3 6600 or e-mail email@example.com seascape ayrshire LHA problem? What LHA problem? The new housing benefit system for people on very low incomes works for neither tenants nor landlords GeorGe rose landlord liaison oFFicer seascaPe T he standard response by poli- cymakers to landlords’ protests against the new local housing allowance (LHA) system of direct housing benefit payments to tenants seems to be that there is no problem. There are claims from many that this is decreasing the supply of much-needed rental properties and, as a result, incr- easing homelessness as more and more landlords suffering rent arrears refuse to let to benefit claimants. The DWP, however, is claiming that the system is working well. Both sides are adamant that they are right. I think that I am in a unique position to claim impartiality in this debate – I work for Seascape – a registered charity that operates a deposit guarantee scheme in South Ayrshire. It’s my job to help those in housing need find a suitable private let so the vast majority of our clients are benefit claimants. We therefore have the tenants’ best interests at heart and work to sup- port them in their new tenancies. So far, Seascape’s deposit guarantee covers government meet its 2012 target to make the evidence that the new LHA system is rent arrears as well as damage caused homelessness a thing of the past. failing both landlords and the homeless during a failed tenancy but we have This is not to say I think that all ten- situation is quite compelling. managed to keep our claim rate just ants on housing benefit cannot be trust- The notion that paying housing benefit below 15% of all our tenancies. ed to manage their own finances as the directly to the tenants is supposed to This is only because we build a government hoped they would – after empower them is having a seriously personal relationship with our tenants all, how many normally law-abiding adverse effect and it is sad to witness. from the outset and meet them weekly citizens could be trusted to avoid falling As Seascape’s landlord liaison officer I to help keep them on the right track into tax arrears if the Inland Revenue am finding it increasingly difficult to during the initial tenancy. We also aim, suddenly decided we should receive our persuade landlords and letting agents wherever possible, to claim vulnerability wages gross rather than have our tax to let to LHA claimants because of the for our tenants so that the payments go deducted at source? high risk that they will lose the first eight directly to the landlord. We are largely The government has seriously under- weeks of rent if the tenant decides to dip Paying housing successful although a number of our estimated the temptation for tenants on into it rather than forward it on. benefit directly tenants do not meet the vulnerability very low incomes to dip into their rent One agent advises that 45 out of 50 criteria and some of our applications money and, when such a tenant does of their landlords who previously took to the tenants are knocked back for lack of supporting this, it is almost impossible for them to benefit claimants will no longer accept is supposed to evidence. make up that shortfall again, putting them, because they have either experi- empower them There is, in our experience, a serious them into arrears and a serious risk of enced rent arrears or been warned off by Ð its having lack of clarity about the way vulner- eviction. fellow landlords. One landlord whom we a seriously ability is assessed, not just locally but We can only hope that the LHA system deal with directly is currently leaving six nationally. It is clear that changes need to will be overhauled before too much of his 14 properties empty as he says it adverse effect be made to improve the system. Maybe more damage is done to the private is not worth the hassle of taking on any and it is sad to then landlords will make their proper- rented sector and the tenants it was sup- more LHA tenants. witness ties available again and in turn help the posed to help the most. issue 3 | Landlord focus | 19 Membership Welcome to SAL Enjoy your free copy of its own legal system and devolved parlia- Landlord Focus stePhen ment, we at SAL took on the challenge of becoming Scotland’s national land- magazine! Peasnall lords’ organisation. To date, SAL is the chairman only grouping of landlords that offers members a specialist Scottish landlord On becoming The Magazine of The ScoTTiSh aSSociaTion of LandLordS landlordfocus issue 3 | scottishlandlords.com legal advice helpline and represents the a member, you Tenancy deposits A WhatÕs in store for us? The big issue Fighting for Local authority work on homelessness s chairman of the Scottish As- interests of Scottish landlords at central will receive a sociation of Landlords (SAL), I and local government levels. free subscrip- welcome your interest in joining With branches throughout Scotland, Dundee tion to the the rights of going strong City looking good our campaign to fight for the rights of we offer you the opportunity to discuss magazine for the private rented sector In association with finance | Policy | Local housing allowance | Update | helpdesk | Training landlords throughout Scotland. issues of common concern through Landlord Focus, which landlords Our success so far as an association stems from a group of landlords from across Scotland getting together to your local branch meetings and training sessions, co-ordinated by your branch representative. offers news, views and fea- tures on a variety of topics of interest to landlords in in Scotland. establish a landlords’ organisation that truly reflects the needs of landlords While our campaigning successes are well documented,we still have a lot of Scotland. Our policy and parlia- operating in Scotland. work to do. We need you to help us by mentary affairs department Don’t delay, In 2001, recognising that Scotland has joining today. ensures that members’ views and concerns are expressed join today! it is hard to believe that this time last year we were at the very highest levels of government. Members receive a under so much stress because of our hMo licensing subscription to our email messaging service, regular problems. Thanks to your work on our behalf with the Scottish updates on legislation and government, that is water under the bridge. details of events taking place near you – delivered directly Jennifer Caola, Edinburgh member landlord to your email inbox. Insurance discounts – and much more I n addition to our free helpline, elec- tronic newsletters and magazine, members can access exclusive dis- counted deals on insurance products through our broker, Alan Boswell. SAL arranges a variety of discounts and offers from companies supplying goods and services to landlords – find these in our website's Member Deals sec- tion. Information and training is high on our agenda and our head office houses Scotland’s only dedicated landlord infor- mation resource centre. Whatever information you require on residential letting, we can provide it via our website or by post. For those inter- ested in gaining a professional qualifica- tion, SAL landlord training can lead to a Certificate in Housing (PRS). • Campaigning at local and Supported by Scottish Association • FREE landlord legal advice helpline national level on your behalf of Landlords • Competitive members-only insurance • Networking with other landlords. 22 Forth Street, scheme • Email updates and messaging service Edinburgh EH1 3LH • Local meetings • Access to members’ area of SAL 0131 270 4774 • Local seminars and workshops website. • Annual national conference • Information Resource Centre www.scottishlandlords.com • Training programme • FREE leaflets firstname.lastname@example.org • FREE magazine and newsletters • Peace of mind 20 | Landlord focus | issue 3 online www.scottishlandlords.com Telephone 0131 270 4774 Landlord training all of the programme and paperwork for the tenancy legal advice helpline was signed B y becoming a member, you can up using SaL be secure in the knowledge that resources. We if you need free, unlimited ad- felt confident vice, you can call our landlord helpline, staffed Monday to Friday, 9am to 5pm, and our new with evening surgeries available on re- tenants were quest. SAL offers the only landlord legal impressed advice helpline dedicated to Scottish as well as Benefits of unity amazed at housing law. This, combined with our coveted landlord training programme, delivered through our sister organisa- how detailed tion Landlord Accreditation Scotland, S AL organises branch meetings opportunity to network and attain it was ... gives Scottish landlords a head start in throughout Scotland. Our 12 additional skills, regardless of how many keeping up to date with new legislation branches meet in major towns properties they own or how long they thanks for all and good practice models. and cities from Inverness to Dumfries, have been in the business. your help The members-only area of our website offering support to landlords in both National Landlord Day is the largest allows members to download and adapt urban and rural Scotland. With mem- gathering of landlords in Scotland and Sandrina Gilligan, all the documents required for their bers from Shetland to Stranraer, land- offers some unique opportunities to hear Ayrshire member letting business and offers many other lords can always benefit from member- from the leading experts in the field of landlord handy resources. With ever-changing ship wherever they live. residential letting. Members benefit from legislation, can you afford not to join? SAL events offer all landlords the free and discounted fees for all SAL events. John Blackwood, Director TO JOIN, PLEASE FILL IN THIS FORM AND SEND IN WITH YOUR CHEQUE FOR THE FEE MADE PAYABLE TO SAL, to: Membership Department, SAL, 22 Forth Street, Edinburgh EH1 3LH. Alternatively, join online with your credit or debit card at www.scottishlandlords.com Membership application form Please use BLOCK CAPITALS Local authority area(s) where properties are I wish to become a member of the The following details will only be used located (optional) Scottish Association of Landlords. for the records of this association. Please see our website for the Code of Main telephone Practice all members agree to abide by Title (or call 0131 270 4774 for a copy). Alternative telephone Signed Forename(s) Email Surname Date How did you heard about SAL? Company name (if any) Please call if you are in any doubt which Address Individual Membership £90 per annum. membership you require. Please note that Suitable for individuals, families and your SAL membership fee is fully tax couples at the same address where only the deductible. named individual or partner will use SAL member benefits. For SAL office use: Receipt Corporate Membership £250 per annum. Database Suitable for companies or organisations Membership card Postcode where more than one staff member will Bank use SAL member services. Membership number issue 3 | Landlord focus | 21 LANDLORDS URGENTLY REQUIRED!! REAM are currently experiencing a shortfall of available property for letting and are urgently seeking owners considering letting out their property for the next year or two until the sales market picks up. With over 200 properties under their managed belt, REAM have a wealth of experience in the letting industry and only specialise in letting property. Predominantly their market is in unfurnished properties throughout Edinburgh, the Lothians, Fife and the Borders. They have a few furnished properties available at this time and are seeking to expand their range into the City Centres. Anyone considering letting out their property should give Maureen Wallace a call, the Managing Director of REAM for a very informal discussion – a special rate is offered to clients signing up on production of this advert. Quote code 03 Ream Ltd. Letting Agents, Edinburgh REAM LTD, THE MATRIX, 66A NEWHAVENand Fife, Scotland ROAD, EDINBURGH EH6 5QB Registered Office: The Matrix Business Centre, 66a Newhaven Road, Edinburgh EH6 5QB t: 0131 561 8285 f: 0131 561 8263 e: email@example.com w: reamltd.com 22 | Landlord focus | issue 3 landlord story ‘My strategy? Provide good accommodation and communicate with tenants’ Frank Gilbride continues funds from this allowed me to start a our series on successful small property development company. I bought flats and shops and converted member landlords sharing them. their Ôproperty journeyÕ. For instance I converted a bakery into This time he speaks to an office and two-bed flat and I also con- David McLennan verted a hairdresser’s into a two-bed flat. What’s the most important lesson you D avid McLennan, 49, is a successful have learned? property investor/developer and Cashflow is king. Mortgages need to be landlord. His property journey paid, so you need the rent coming in. began in 1985 when he decided to rent Voids can make a huge dent if you are out his one-bed flat as he and his girl- not prepared and budget for them. friend were moving into a bigger flat together. He soon caught the bug and Greatest challenges? from there went on to run successful At the moment it’s trying to refinance letting agencies in Edinburgh and build in this market. My bank told me I was a up his own property portfolio. gilt-edged customer and then told me to go elsewhere to remortgage. It’s not the What is your background? business it once was. I was born and raised in Edinburgh. I left concept was that I contacted the parents school with five O grades and joined the of all the first-year students coming to Worst experience ? civil service. I left after three years and Edinburgh University and offered to When a friend of a tenant died in a house then joined then police where I stayed source a flat for them which would pay fire after candles set light to curtains. It for five years and after I left I fell into for itself, the idea being that the student was the property I had converted from property. would buy it with the parent acting as a hairdresser. I was later told that if guarantor and then pay the mortgage by the redevelopment had not been done How did you get into property and renting out rooms to friends or fellow properly, the fire would have claimed the become a landlord? students. whole building. In 1985 I had my own one-bedroom flat The hope was that when they had fin- on the Meadows in Edinburgh. After my ished their studies, they could sell the flat What are your biggest frustrations at then girlfriend and I decided to move having paid little or no rent during their the moment? into a bigger flat, I decided that I did not time at university. It was very successful. The industry seems to be so pro-tenant. want to sell it. So I advertised for people I made my income from the sourcing fee The amount of legislation and bureauc- to rent my flat and I got a huge response. for finding the property and also a pro- racy that has been brought in such as I realised there might be a business curement fee from the Bank of Scotland, HMOs [licences for homes in multiple opportunity here, so I kept hold of the the mortgage provider. occupation] and landlord registra- names and addresses of the people who This gave me the funds to start buying tion is frustrating especially as there had been inquiring about my flat and properties and I started buying shops doesn’t seem to be any will to chase bad then matched them up with landlords and converting them into flats. In total landlords. with one-bed flats. I converted 17 shops into flats in the The amount of That was how my first lettings agency, Edinburgh area. I cashed in on the Edin- legislation and What’s your strategy to ensure you Flatfinder, was formed. I initially ran it burgh property boom by just rolling and survive the credit crunch? bureaucracy from my flat and did all my work on the flipping these developments and I also To provide good quality accommodation kitchen table. I then moved to a small started to put together my own portfolio. that has been and make sure there’s constant commu- office and shortly afterwards relaunched The business continued to do well brought in is nication with tenants on repairs. Make the business as Greyfriars Property Serv- and at one time we were managing 300 frustrating espe- sure good tenants are kept happy by ices. Greyfriars quickly became a huge properties for landlords. But I sold the cially as there responding promptly to their requests. success after I moved to a bigger office business in 2000 when I got divorced. doesnÕt seem at George IV Bridge and started taking I took time out after selling the busi- What are your long term goals ? on staff. ness, and then got back into property to be any will Sustain the present portfolio as long During this time I devised a scheme when I bought a piece of land and man- to chase bad as possible and use property as my called the Faraway Scheme. The basic aged to get planning permission. The landlords pension. issue 3 | Landlord focus | 23 The Money Centre expands its product range and services to offer…. ‘The Complete Solution for Landlords’ W ith the financial markets taking a very sudden turn To assist our customers we have diversified into selling during 2008 The Money Centre, known as one of insurance products via The Money Centre (Financial Services) the UK’s largest buy-to-let and commercial brokers, Ltd trading as Living Trusts, to mitigate such risks.“ quickly realised that with their market knowledge and property investment expertise they could be offering their Additional services via recommended suppliers includes: customers so much more than just a mortgage. Property insurance Property sourcing By rebranding to become ‘The Complete Solution for Estate management Landlords’ The Money Centre have extended their own Innovative property management and letting solutions. product range by incorporating The Money Centre (Financial Services) Ltd t/a Living Trusts along with bringing new The Money Centre are also offering a FREE portfolio and risk recommended suppliers on board to offer a full range of review to ensure landlords are making the most out of their landlord essential services, some of which are exclusive to investment. The Money Centre clients. Many investors are struggling to refinance due to the lack of For further details call The Money Centre on 0800 374 611, mortgage availability and falling property values. The or email firstname.lastname@example.org constant lowering of interest rates has been heaven sent for some landlords on tracker rate products but many could be facing a very different set of problems. Managing Director The Money Centre (Financial Services) Ltd t/a Living Trusts is and Co-founder, Mark Alexander, said: “We are seeing some an appointed representative of Home of Choice who are directly of our landlords become much more cash flow positive, but in authorised with the Financial Services Authority. the event of a financial crisis they may struggle to refinance or sell their properties to release equity. If their income were to cease due to events such as redundancy, illness or even death, their families could be left in financial difficulty. 24 | Landlord focus | issue 3 keeping track We know where you live… Make sure utility bills go to tion tool for letting agents, property man- agement companies and private landlords. tenantsÕ new addresses It allows the property manager to notify all utility companies and local authorities F ed up with lengthy calls to council of a change of tenancy electronically, tax and utility call centres when making the process of closing or opening you have a change of tenants? accounts simple, quick and effective. Then iammoving.com is definitely for The property manager benefits from you, writes Anne Tyler, of member agent the iammoving.com relationship built Gladstones. over a period with every local council We have used this system for the past and energy company, meaning that if few months and we believe it has made there are any billing issues relating to a a marked difference to the time taken to change of tenancy they will be resolved advise a change of tenancy and accuracy by iammoving.com and the agent will of the related invoices. never need to be involved – hence no So what is iammoving.com all about? need for long-winded follow-up calls for It is an online change-of-address lost letters or faxes. Simple! service giving home movers a secure and convenient way to notify more than Since utilitell.com started to be pro- 1,500 companies ranging from local moted in mid-2008, more than 400 councils, water and energy companies to letting agents have signed up to use the DVLA, TV licensing and Boots advantage tool with more than 22,000 change of card that they have moved address. tenancy notifications sent each month. After feedback from the rental sector For more information on the utilitell iammoving.com launched www.utilitell. service, please contact iammoving.com com, an online change of tenancy notifica- on 01244 505805. Mortgage availability – and other questions of interest Continued from page 5 transparent and improve the grim view More GM: When clients ask for a no-deposit the analysts have of BTL mortgages. information: deal. The only legal way to do a no- are playing hardball. What could help Landlords need to have in place the www.fsa.gov.uk; deposit deal is expensive. The customer is if the government, through Northern resources to pay the mortgage should the www.cml.org.uk would have to use bridging finance for Rock, RBS, Lloyds Group and Mortgage tenants default on rent. The best way to six months and then remortgage using a Express, launched competitive products, ensure this is checking affordability. BTL mortgage. However, the cost of the making other lenders follow suit. KF: All mortgage lending will continue bridging may negate the discount given. KF: It will be interesting to see the FSA to depend on individual circumstances The best way is to have the deposit, consultation on mortgage market regu- and some of those who reach any maxi- raised through savings, remortgage of lation which should be published by the mum numbers of loans with lenders the residential property or BTL property, time this magazine comes out (www.fsa. should still have options with commer- secured loan, and so on. If a client comes org.uk). Potentially mortgage product cial finance. to me and asks for other ways or systems regulation may have an effect. of doing this, I will be blunt and advise LTV and loan-to-income restrictions Where can landlords look for finance that we do not deal with illegal schemes may be brought in as well as the pos- just now? and it is in the best interest of the client sibility that BTL mortgages will enter the GM: The lenders’ criteria policies not to pursue those routes. The end regulatory regime that they are currently are tougher than before and changing result of utilising many no-deposit outwith. There is also a possibility of almost daily. For many properties, such schemes available can be prosecution for using insurance to balance the risk for as HMOs, finance can only be secured fraud by the lender. borrowers seen by lenders as higher risk. through commercial mortgages. There- KF: I hate to be asked questions which fore, the best option is a good mortgage attempt to lay the blame for the current Is it true that landlords now need an broker with knowledge of the BTL market crisis solely at the door of the lenders. employed status as well as rental in- and access to different ways of funding. There are others to share any blame and come? What will happen in the future? KF: As ever, you need to look round remember that irresponsible lending was GM: No, it is not true. Whether you are for the best deals out there, approach not as prevalent in the UK as the US. employed or self-employed (with two to existing lenders as well as new. The lack The best option My worry is that we need to be careful three years self-employment) you have of wholesale funding is the problem, is a good that there is not an over-reaction to the access to the same products. However, not always that any particular lender is past 12 months which results in over mortgage self-certification BTL mortgages are hard unwilling to lend. regulation and does not actually help the to find nowadays. I actually agree with broker with sector in the long term. the disappearance of self-certification Now please answer the question you knowledge of Nothing in this article is given or intended as it will make the BTL mortgage more most dislike being asked at present the BTL market as personal investment advice. issue 3 | Landlord focus | 25 “I should like to place my appreciation of the work “I would like to thank you once put in your team in advising me and finding a again for all your hard work- the flat tenant so quickly for my property. I approached a now looks splendid and we couldn’t number of letting agents before deciding on JVR and it was your professionally yet friendly manner have turned it around in such small together with your clear price structure, which was time frame and at the cost without ably explained to me, which persuaded me to use you. Your efforts are truly your firm” Mrs F, Longniddry appreciated” Mr R, Edinburgh C.K. STRACHAN LTD. Fire Safety Solutions Full installation and commissioning of fire safety detectors Arrange a maintenance contract with every install All detectors come with a ten year manufacturers warranty Telephone: 07958 266009 Email: email@example.com Unit J 1 Muirhall Road, Larbert, Falkirk, FK5 4RF 26 | Landlord focus | issue 3 landlord training Landlord training SAL members can refresh their professional skills free at LAS training courses T he landlord training programme for SAL members is now delivered by sister organisation Landlord Accreditation Scotland (LAS). You do not need to be an accredited landlord to attend training and the three core standards modules are available free of charge to SAL members. See www.land- lordaccreditationscotland.com for dates and venues. Core standards training The programme (Level 1) comprises three independent sessions. Landlords Session 2: Training for landlord peer groups and agents can attend any or all of the Tenancy Management A group of landlords or letting agents sessions, in any order. • Communication with the tenant. can approach LAS to develop a training • Equality issues, complaints and disputes. session or a series of training sessions to Whom do you contact? • Pre-letting procedures. address specific local issues. Landlords or letting agents may find • Complaints handling. themselves faced with: • Dealing with disputes. Letting agent (and landlord) • Unexpected demands. • Dealing with anti-social behaviour. training and services • The sudden emergency in the middle LAS have developed services for letting of the night. Session 3: agents and landlords. These include: • Changes in legislation. Tenancy agreements and notices • In-house letting agent training: you can • The list is endless ... • Different types of law (contractual, buy in the core standards training or the What is the right (and legal) thing to statute and common). specific course for letting agents, Rep- do? How do you remain assured you • Contractual tenancies. resenting Landlords Responsibly, to be are pursuing the best course for both • Types of tenancy. delivered in your own or the LAS office. yourself and your tenant? Through • Assured tenancies. • Specific in-house letting agent train- attending LAS training sessions, you • Short assured tenancies. ing: LAS officers assess the training can be sure that your knowledge • Introducing the model agreement. required by the business and check and awareness of changes in the documents and procedures. A training private rented sector are up to Executing the short assured audit can be carried out. Agents can date. tenancy agreement. gauge gaps in their knowledge and • What happens when notices are served? these can be addressed through tailored We offer: • Grounds for repossession of assured training. • Core standards training sessions. tenancies. • Business health check: LAS officers will • Individual landlord training • Notice to quit. spend a minimum of half a day with an • Training for landlord peer groups. • Notice of proceedings for possession. organisation or landlord to review poli- • Letting agent training and services. • Recovery of possession of short assured For further cies and procedures. Recommendations tenancies. information on are made on how aspects of your opera- Session 1: • Unfair terms in consumer contracts the training pro- tions can be amended and enhanced. Property condition and regulations. vided by Landlord property management Accreditation 2009 content of the letting agent • Minimum property conditions. Individual landlord training Scotland, please training Representing Landlords • The tolerable standard. Building on the core standard training contact Elspeth Responsibly • The repairing standard. sessions, a member of LAS staff can Boyle, Develop- • Agents’ responsibilities. • Providing clear statements and detailed look over specific aspects of your practic- ment Manager, at • Risk assessments. inventory. es for example your lease, moving-in and the LAS office on • Compliance issues. • Repairs and maintenance. moving-out procedures and recommend 0131 553 2211 • Fees and premiums. • Carrying out repairs. where changes or improvements could or email elspeth@ • Marketing and advertising. • Energy efficiency, insulation and heating. be made. The minimum amount of time landlordaccredita- • Repairing obligations. • Health, safety and home security. that can be bought-in is one hour. tionscotland.com • Dealing with disputes. issue 3 | Landlord focus | 27 0131 665 4653 • CONTACT@ARCSERVICES-SCOTLANDLTD.CO.UK Arc Services Scotland Ltd is a an established reactive maintenance company specialising in both the private rented and social housing sectors. We cover all aspects of maintenance both reactive and planned. We cover the following disciplines: ■ Gas/Heating repairs and installations ■ General Building repairs ■ All Domestic Plumbing repairs and Installations ■ Full Joinery service ■ Drainage clearing service ■ Glazing service ■ Roof repairs ■ PIR & PAT Certification ■ Bathroom installations ■ Gas Safety Certification ■ Shower Repairs/installations ■ Energy Performance Certificates ■ Electrical repairs ■ All Fire safety Certification and testing WINTER SAVER DEAL !! As most boilers have been on limited use over the warmer months we recommend a service before they are used heavily over the winter period to minimise any costly repairs that may crop up. A service and appraisal on your boiler £50 and if your gas safety is due we can add this in for an extra £15 when carrying out the service. All prices are excluding VAT. We cover East, West and Midlothian and the Borders. Our service is backed up by a professionally staffed office with a unique and specially designed data management program to allow job allocation and tracking to ensure each and every job is progressed quickly and effectively through to completion. We carry out all safety certification work for the rental market and offer a complete Landlords/Letting Agents service Letting Agents - Our software system allows us to produce daily and or weekly updates on all jobs undertaken so that you have the updates and job status before you are asked. We also advise tenants by way of a job report card left in the property if the tenants are not present. Landlords - No job is too small and our pricing structure is highly competitive. 0131 665 4653 CONTACT@ARCSERVICES-SCOTLANDLTD.CO.UK ARC SERVICES SCOTLAND LTD, UNIT 4 BLOCK 4, INVERESK INDUSTRIAL ESTATE, MUSSELBURGH, EH21 7UL Update for the latest news check out www.scottishlandlords.com Solutions for Modernising rental law landlords A fresh approach to all aspects of property ownership is offered by the Property Network Scotland, The Housing Bill aims to Issues under consideration which • Allowing councils to charge a group of professionals com- update and standardise may be of particular interest to landlords a fee for adding details of mitted to customer satisfaction private landlords are: an agent to the registration. for all domestic or commercial rented sector legislation property related services. Every Landlord Registration HMO Licensing member company has been rec- T he draft Housing (Scotland) • Giving councils powers to obtain • Changing the definition of an ommended for membership by Bill aims to safeguard social information about people con- HMO to include some short term another member then vetted, to housing for future genera- nected with a property, to enable and holiday lets; and maintain the highest reputation. tions and improve value for ten- or assist them to exercise their • Where planning permission is From finding the right home or ants and taxpayers by reforming functions; required, making it a requirement site, raising finance or carrying the right to buy and introducing a • Increasing maximum fines for for the grant of an HMO license. out repairs, the Property Net- legislative framework for a mod- landlord registration offences in work Scotland has the solution. ernised Scottish housing regulator. line with HMO licensing; To view the consulta- Call 0844 873 3487 or see Also included are proposals to • Including information in the reg- tion document relating to the propertynetworkscotland.com support responsible landlords and ister on refused and deregistered private rented sector, go to help to maintain good physical applications and on those awaiting www.scotland.gov.uk/Publica- standards in private sector housing. approval; tions/2009/07/06160610/0 Considering adding to your portfolio? The stamp duty holiday for all property costing less than £175,000 has been extended until the end of 2009 Regulator to give peace of mind The Construction Licensing Executive (CLE) has been set up to give greater peace of mind to those looking to employ a trades- man and has been developed by Scottish Building, SNIPEF, SELECT, the Scottish Decorators’ Federation and National Special- ist Contractors Council. Learn more, or find lists of CLE tradesman at www.clescotland.com Changes to holiday lets tax Get appliance testing off PAT The tax treatment of furnished and inheritance tax will also be The first set of dates for portable some this could mean an opportu- holiday lettings(FHL) changes withdrawn. appliance testing (PAT) courses nity for considerable cost savings. from 6 April 2010. FHL rules now apply only to UK are filling up and we will add more Please bear in mind when costing Income from holiday lets will properties but they will include all dates until we have met the de- this for your own business that be treated like any other rental properties within the European mand. Attending the one-day train- you would still need to buy (about income and losses can only be set Economic Area from next April. ing will give members the required £300) or hire (about £60 a week) a against rental profit rather than This is a complex area, so as with knowledge to carry out their own PAT testing machine to carry out general income as at present. Other other tax matters, seek professional PAT testing and, depending on the the tests on your appliances. reliefs in place for capital gains tax advice if in doubt. number of properties you have, for More information on our website issue 3 | Landlord focus | 29 update Credit crunch sees Help with energy questions lending fall further Figures from the Council of Mortgage Lenders show that P rivate landlords and their new buy-to-let lending fell for tenants could benefit from the seventh consecutive quarter, the Scottish Government’s though the small fall may signal Energy Assistance Package, funded that the decline is beginning to by the Scottish Government and slow. There were 21,600 new delivered through the Energy Sav- loans in the second quarter of ing Scotland advice network, man- 2009 after 22,400 in the first. aged by the Energy Saving Trust. The overall value of gross It can help make energy inefficient advances was £1.9 billion after properties easier to heat. £8.9 billion a year earlier. If landlords pass the information For more information visit about the package to their tenants www.cml.org.uk and suggest they call an advisor from an Energy Saving Scotland advice centre, tenants will be able to find out if they qualify for assistance. Member resources: By calling the freephone number 0800 512012, or visiting www. more deals planned energyassistancepackage.com ten- Work will begin soon on new ants can find out about the offers members’ resources and on ex- that may be available to them, panding the deals available to from advice on how to save energy SAL members from suppliers of and increase their income, to free goods and services. insulation, or for some, even a new Any suggestions? E-mail heating system. firstname.lastname@example.org Ian Naismith 2 Brodie Place, Stonehouse Larkhall, ML9 3NN LANDLORDS LANDLORDS Domestic and Commercial EPCs Look No Further For Professional Look No Further For Professional Property Management Property Management Discount for SAL members Also distributor for utilities • • Experienced Team With Experienced Team With (Utility Warehouse) Extensive Local Knowledge Extensive Local Knowledge Please mention SAL magazine • • Personal Tailored Service Personal Tailored Service when you contact me • • Prominent High Street Presence Prominent High Street Presence 07711 266558 • • Free Rental Valuations Free Rental Valuations email@example.com www.glasgow-dea.co.uk • • Competitive Rates Competitive Rates To Arrange Free Appointment To Arrange A A Free Appointment Tel: 01307 463657 Tel: 01307 463657 Fax: 01307 467667 Fax: 01307 467667 Visit www.letangus.co.uk Visit www.letangus.co.uk We cover all areas of Angus and Tayside 38-40 East High Street, Forfar, Angus DD8 2EG 30 | Landlord focus | issue 3 Market your Property to millions and ﬁnd Tenants fast. Tenant Find Service from £49 Over 36 Million Views From The Uk’s Leading Property Portals Why Pay Large Letting Fees When You Don’t Have Too Full Management Service From Only 6% No Fees Passed On To The Tenant Call 020 8697 0984 www.discountletting.co.uk All fees are subject to VAT at the prevailing rate. SG PRO Cleaning Ltd Property Cleaning Service Our aim is to provide landlords with an honest, professional and standards driven service backed up with excellent customer service. Our service includes: • Full inventory • Move out report • Maintenance analysis reported back to the landlord • Minor maintenance service • Window cleaning • Specialist kitchen, bathroom and carpet cleaning • Removal of unwanted items Our full and comprehensive service is available across Central Scotland including Glasgow, Edinburgh, Stirlingshire, Perthshire and Fife Unit 9, Carsebridge Court, Cooperage Way Business Village, Alloa, FK10 3LQ Tel: 01786 343444 E-mail: firstname.lastname@example.org issue 3 | Landlord focus | 31 Helpdesk online www.scottishlandlords.com Blocked drains Flood damage Recently my tenant reported that the kitchen sink was blocked and not draining prop- R ecently the property I let Unfortunately this is a common erly. On inspection, it appeared was flooded. As a result, my problem where tenants fail to take that the blockage was external tenants had to be out separate contents insurance for to the property. Surely the ten- re-housed and considerable dam- their own belongings. ant should be liable to pay for age was caused to the structure As you know, your insurance this as it is due to their use of Tenants’ of the property which thankfully was all covered by my insurance policy. policy will not cover such claims but it is advisable that you include a clause in your tenancy agreement the property? Importantly, the landlord insurance, However the tenant has now come back asking me to pay for advising tenants to take out insur- ance cover for their own belong- has a duty in the repairing standard under the Housing unblocking damage caused to his belongings which, of course, are not covered by my policy. ings. Without this, they have no claim. You are not liable for loss or damage to their property. (Scotland) Act 2006 to ensure that the drains are in working order. However, under com- sinks, mon law, and perhaps your tenancy agreement, the tenant has a responsibility not to cause energy blockages. The primary responsibility certificates, will be on the landlord to main- tain the drains but you may be able to recover costs from the the TV tenant where the blockage can be proven to have been caused licence … by the tenant. You ask, we answer TV licences I let furnished flats which of- ten have televisions. In such cases, is it my responsibility as the landlord to purchase a TV licence? If you let your property and you provide a TV for tenants to use, it is usually your responsibility to make sure that the address has a valid TV licence. However, you can state in your lease that the tenant is responsible for purchasing a licence. The Television Licensing Au- thority states that both you and your tenant are responsible and either of you could face pros- ecution and a fine up to £1,000, for failure to pay the annual EPCs when renting rooms only licence fee. All helpdesk queries to: For further Landlord Focus I am an HMO landlord renting only required for dwellings, not details, go to Scottish Association rooms under separate tenancy parts of a dwelling. www. of Landlords agreements. Do I need to get an If the area let was a self-contained tvlicensing. 22 Forth Street, energy performance certificate unit, then an EPC would be co.uk Edinburgh EH1 3LH (EPC) for every room? required. If the lease is for a bed- 0131 270 4774 room and shared facilities then The Scottish Building Standards an EPC is not required. To down- Email Agency produces a fact-sheet for load a copy of the factsheet, go to: landlordfocus@ landlords setting out the require- http://www.sbsa.gov.uk/pdfs/EPC_ scottishlandlords.com ments for EPCs. Simply, EPCs are FAQ2.pdf issue 3 | Landlord focus | 33 ab Group insurance Cannabis – the growing danger used for this purpose? See p15 for insist on payment via your bank; robert Graver From information taken from our claim files, the following characteristics stand background details of the spread of • Be wary of short lets without under- taking rigorous vetting of the prospec- out which may suggest that a property cannabis farms in tive tenant; alan boswell insurance could be used as a cannabis farm rented homes • Ensure you inspect the premises regu- • Short term let of three or six month larly, if possible with internal viewing; duration; • Do not allow sub-letting; The dangers if your property • Rent is paid in cash, sometimes in full • Consider employing a letting or man- is used as a cannabis farm or for a significant period of the let; aging agent to manage tenant vetting • Not vetting tenants sufficiently; and provide an inspection service on – and the warning signs • Accepting a telephone number from your behalf to identify any misuse of the the prospective tenant purporting to be premise early on; O ver the past year there has been a last landlord as a reference; • Take a copy of photo ID for appli- surge in the number of landlords • No background checks undertaken cants, for instance passport or driving making insurance claims, because other than seeing the passports of pro- licence; tenants have destroyed properties whilst spective tenants; • Ensure their identification is genuine; using them to grow cannabis. • Not getting bank details checked as • Watch for telephone, water, gas, and Alan Boswell Group landlords' rent is paid in cash; electricity accounts in different names; insurance specialists have dealt with ap- • Promised references not being • Require more than one type of identi- proximately 50 of these claims in the last provided; fication for joint applicants; year and it is evident landlords insurance • Lack of visits to the property under- • Check prospective tenants’ current is vital. taken and, if done, external only or address; limited internal only; • Obtain prospective tenants’ mobile What is the issue? • A pungent smell is produced which numbers and car registration numbers; An increasing number of residential may be noticed through the walls of • Carry out reference and credit checks landlords are suffering claims because adjoining properties; on all prospective tenants; their properties are being used by the • Window blinds, blacked-out windows • Lastly, be vigilant – taking these simple tenants to grow cannabis. or curtains always drawn to prevent steps may result in your premises being The cultivation process of cannabis anyone seeing what is going on; safe from the damage caused by this causes damage to the property for • Sub-letting being allowed, with no practice. various reasons including: control of sub-tenant activities; Be vigilant — • Fires starting because the tenants • No particular location issues, some For further details of the above and bypass the electricity meter; very respectable premises/areas have taking these any other insurance cover you may need, • Holes being made in walls to pass been involved; simple steps please contact the Alan Boswell Group cables through; • No managing or letting agent em- may result in on 01603 216399 or email • Large quantity of water leakage from ployed to manage the property or vet the your premises email@example.com. buckets and pipes; and tenant details. being safe from Or if you prefer, visit our web site • Tenants starting fires to cover their www.alanboswell.com/landlords or write tracks before police raids. What can I do to prevent this happening? the damage to us at The Landlords Dept, Harbour Take the following reasonable precautions: caused by this House, 126 Thorpe Road, Norwich, How will I know if my property is being • Do not accept payment of rent in cash, practice NR1 1UL. 34 | Landlord focus | issue 3 www.belvoirlettings.com Supporting you every step of the way Building a strong portfolio requires solid foundations and the secret of solid foundations is good support. With many years experience, knowledge and expertise we can make sure you’ve got all the support you need. For further details call or email one of the offices below: Aberdeen 01224 645707 Glasgow 0141 337 3395 firstname.lastname@example.org email@example.com Dundee 01382 228437 Kilmarnock 01563 546811 firstname.lastname@example.org email@example.com Edinburgh 0131 447 2020 Paisley 0141 848 0333 firstname.lastname@example.org email@example.com Falkirk 01324 623523 Stirling 01786 464607 firstname.lastname@example.org email@example.com Belvoir Property Management (UK) Ltd is authorised by the Financial Services Authority Let. us do all the work! Does your property stand out for the wrong reasons? The switchover to digital TV has started. If your property is not ready to receive a digital TV signal, you could find that nobody wants to move in. Make sure it is ready for the digital TV switchover. For more information visit digitaluk.co.uk/propertymanagers or call 08458 455 455*. *Calls are free for BT customers within inclusive calling plans. Call charges from other providers may vary. The standard business hours for Digital UK’s contact centre are 9am to 7pm Monday to Friday and 10am to 4pm on a Saturday. Opening hours will be extended during the switchover in each area.