landlord investor jan 2016

JANU

ARY

2016

LANDLORD | PROPERTY | INVESTMENT

W R I T T E N B Y I N D U S T R Y E X P E R T S C O V E R I N G A L L A S P E C T S O F B U Y - T O - L E T

UPCOMING TAX CHANGES: TAkINg oNE STEP AT A TImE

how To fIND ThE bEST STRATEgY foR YoU IN 2016

- Tom Entwistle

gETTINg STARTED AS A lANDloRD:fRom AN INSURANcE ANglE

- Steve Cox

- Simon Zutshi

TAxINg TImE foR lANDloRDS:wIll IT gET ToUghER?

C O N TA C T S H A W B R O O K T O D A Y

T 01277 751 112

[email protected]

W W W . S H A W B R O O K . C O . U K

ANY PROPERTY USED AS SECURITY, INCLUDING YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT

S P E C I A L I S T

B U Y TO L E T

S H O RT T E R M LOA N S

& R E F U R B I S H M E N T S

C O M M E RC I A L

I N V E S T M E N T S

T R A D I N G

B U S I N E S S E S

T R A N S P A R E N T

L E N D I N G

Our commitment to sustainability and transparency has delivered over £1bn

in lending to property professionals, investors and SMEs.

Shawbrook helps property professionals succeed:

• Transparent finance underpinned by a responsible lending framework

• Personal, case-by-case approach to funding

• Clarity of fees and charges across all products, at all times

• Broad range of competitive short term and term products

• Lending available for individuals, LLPs and limited companies

MOST INNOVATIVE LENDER

2013 & 2014

BEST COMMERCIAL MORTGAGE PROVIDER

2015

Awards 2014

BEST SERVICE FROM A COMMERCIAL

MORTGAGE PROVIDER 2012, 2013 & 2014

COMMERCIAL LENDER OF THE YEAR

2013,2014 & 2015

www

.bri

dg i

ngandcommercia

l.co.uk

2015

210x297_SB_CM_Transparent_Q2.indd 1 22/06/2015 10:58

lANDloRD INvESToR January 2016

06

2026

1416

2830

18

wElcomE To ThE jANUARYISSUE of lANDloRD INvESToR!Welcome to the fi rst edition of Landlord Investor for 2016, an issue that explores the future for landlords and also gives you an insight into planning ahead for the year.

2015 seemed to go by so quickly, and we are now faced with a new year and for some, a new start. All of us at LIS Towers are looking forward to having another successful year, and with 14 shows, 11 editions of the magazine as well as our very own programme launching on SKY TV, it is certainly going to be a busy one.

This issue features Tom Entwistle from LandlordZONE discussing the widespread talk of demise for the buy-to-let sector in the UK, and shares his insight into what is to come for landlords.

Steve Cox from Alan Boswell is this month covering how to get started as a landlord from an insurance angle by guiding you step-by-step through a case study, showing you how to cover yourself throughout the process.

Of course the new year is all about setting goals, and this month Simon Zutshi from property investors network is discussing exactly that; how to fi nd the best strategy that works for you in achieving them.

We hope you have enjoyed your start to the New Year, and we hope that this issue makes your 2016 a successful one.

C O N TA C T S H A W B R O O K T O D A Y

T 01277 751 112

[email protected]

W W W . S H A W B R O O K . C O . U K

ANY PROPERTY USED AS SECURITY, INCLUDING YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT

S P E C I A L I S T

B U Y TO L E T

S H O RT T E R M LOA N S

& R E F U R B I S H M E N T S

C O M M E RC I A L

I N V E S T M E N T S

T R A D I N G

B U S I N E S S E S

T R A N S P A R E N T

L E N D I N G

Our commitment to sustainability and transparency has delivered over £1bn

in lending to property professionals, investors and SMEs.

Shawbrook helps property professionals succeed:

• Transparent finance underpinned by a responsible lending framework

• Personal, case-by-case approach to funding

• Clarity of fees and charges across all products, at all times

• Broad range of competitive short term and term products

• Lending available for individuals, LLPs and limited companies

MOST INNOVATIVE LENDER

2013 & 2014

BEST COMMERCIAL MORTGAGE PROVIDER

2015

Awards 2014

BEST SERVICE FROM A COMMERCIAL

MORTGAGE PROVIDER 2012, 2013 & 2014

COMMERCIAL LENDER OF THE YEAR

2013,2014 & 2015

www

.bri

dg i

ngandcommercia

l.co.uk

2015

210x297_SB_CM_Transparent_Q2.indd 1 22/06/2015 10:58

3

Industry UpdateTax Advice

Landlord AssociationsInvestment Opportunities

InvestmentLegal

FinancialLandlord Insurance

coNTENTS

Tenants History LTDSouthbridge HouseSouthbridge PlaceCroydon CR0 4HA

Statements and opinions expressed in articles, reviews and other mate-rials herein are those of the authors; the editors and publishers. While every care has been taken in the compilation of this information and every attempt made to present up-to-date and accurate information, we cannot guarantee that inaccuracies will not occur. Tenants History Limit-ed and our contributors will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through the promoted links.

EditorialEditor

Tracey [email protected]

Editorial Contributors

Art Dept.DesignCraig Edmonds

AdvertisingBeverley Meliniotis

contact0208 656 5075

landlordinvestmentshow.co.uk

/LandlordInvestmentShow

@LandlordInShow

Kevin WrightLeadersMike BrownPaul ShamplinaPeter LittlewoodSimon ZutshiSteve CoxTom EntwistleUKLAPWayne Treveil

Tracey Hanbury | EditorLandlord Investor

Tracey Hanbury

January 2016 lANDloRD INvESToR

mEET ThE TEAm Show locATIoNS

If YoU woUlD lIkE ANY INfoRmATIoN AboUT oUR 2015 ShowS, PlEASE gET IN coNTAcT wITh A mEmbER of ThE TEAmoR AlTERNATIvElY, vISIT oUR wEbSITE AT: www.lANDloRDINvESTmENTShow.co.Uk

TRAcEY hANbURYEDIToR & SAlES DIREcToRT: 0208 656 5075M: 07931 308 [email protected]

STEvE hANbURYDIREcToRT: 0208 656 5075M: 07429 683 [email protected]

lES hANbURYDIREcToR

RYAN DENNINgToNSAlES & EvENTS mANAgERT: 0208 656 5075M: 07931 308 [email protected]

bEvERlEY mElINIoTISADvERTISINg SAlES mANAgER

T: 0208 656 [email protected]

cRAIg EDmoNDScREATIvE DESIgNER

T: 0208 656 [email protected]

fRAN RobINSSAlES & EvENTS mANAgERT: 0208 656 5075M: 07950 284 [email protected]

NovEmbER - loNDoN olYmPIA

fEbRUARY - EAST loNDoN

mARch - bRIghToN

APRIl - DARTfoRD

mAY - STEvENAgE

SEPTEmbER - NoRwIch

jUlY - EPSom DowNS

jANUARY - gUIlDfoRD

mARch - colchESTER

APRIl - cRoYDoN

mAY - mAIDENhEAD

jUNE - loNDoN olYmPIA

SEPTEmbER - mIDlANDS

ocTobER - mANchESTER

4

January 2016 LANDLORD INVESTOR

INDU

STRY

UPD

ATE

6

TAlk of ThE DEmISE of bUY-To-lET IS wIDESPREAD, bUT IS ThIS TAlk PREmATURE gIvEN ThE SIzE of ThE INDUSTRY (1.4m To 2m lANDloRDS - ESTImATES vARY) AND ThE PRojEcTED DEmAND foR Uk RENTAl hoUSINg IN ThE fUTURE?Yes, things will definitely get tougher for buy-to-let landlords; what with a 3% landlord stamp duty tax, removal of higher rate mortgage interest re-lief and more rigorous regulations, including the right-to-rent checks being introduced from Febru-ary 1st next - the landlord’s lot is to be more oner-ous. It’s really a three pronged attack on landlords: pay more to get into the market (stamp duty) pay more to stay in (reduced tax relief), and operate to a more professional standard.

The accountants, mortgage lenders and investors are still coming to terms with the changes and until the dust settles we are still unsure how the cards will fall. But it is likely that for the small-scale con-servative investor in buy-to-let, there will be little change. Those most affected will be those who have really “pushed the boat out”; the investors (speculators?) who have built-up large proper-ty portfolios based almost entirely on borrowed funds.

TAxINg TImEfoR lANDloRDS

Tom Entwistle - LandlordZONE

LANDLORD INVESTOR January 2016

INDUSTRY UPDATE

7

The attraction of property as an investment has been its security: the safety and steady appreci-ation of capital, with a good investment income return to-boot. It’s been hard to find comparable safety and returns in any other investment medi-um in recent years. With interest rates and general inflation at near zero, I hardly need to tell you what house prices have done over the past 20 years.

With first-time buyers finding it hard to scramble onto the housing ladder, buy-to-let, with full inter-est relief, proved a one-way ticket to easy street. But it brought a lot of negative media attention and a lot of resentment, no doubt the politicians got a real ear-wigging from young renters and their parents at the election.

Prior to the May 2015 general election the fear was that a Labour victory would lead to their favoured anti-market strategy of rent controls and mansion taxes. So, when the Conservatives emerged victo-rious there was relief all round; only to be followed by gasps of astonishment when the Chancellor’s first post-election budget proposed a financing crack-down.

Some would argue that George Osborne’s at-tack on buy-to-let landlords is worse than Labour would be contemplated, but on closer examina-tion the effects will be selective. The intention is to “cool” escalating buy-to-let lending, both to curb lending excess, which could destabilise the whole economy if there is another economic down-turn, and to slow escalating property prices. This to give home-buyers a chance – Conservative policy fa-vours home ownership over renting.

ThE NEgATIvES foR lANDloRDS INclUDE:� Removal of mortgage interest relief above the basic rate of tax

� Removal of the 10% wear and tear allowance, to be replace by like for like replacement tax relief

� Stamp duty on buy-to-let and second home purchases

� Capital gains tax on sales to be paid within 30 days

� Increased regulation including retaliatory eviction restrictions, right-to rent checks and more stringent rules for section 21 eviction claims, though thankfully and critically the section 21 no-fault eviction process has been retained.

� For those landlords involved with low or no-income tenants, restrictions on Housing Benefit payments will have an impact, though the policy reversal on tax credits helps.

� Buy-to-Let mortgage lending criteria is likely to be tightened - Barclays responded by seeking proof that rental income is at least 135% of the mortgage cost, up from the traditional 125% figure used for years.

� Interest rates will inevitably rise at some point, given that US rates have seen a recent rise. This is bound to put some highly geared landlords under pressure.

The Chancellor’s exemption for substantial and corporate landlords reveals a desire to emulate a US and German style rental market. There, large institutions own and manage large blocks of rental housing, compared to the UK’s near 90 per-cent of properties owned by small-scale landlords; 70% or so with less than 3 properties and at least 50% with no mortgage finance.

The economics for large-scale corporates, up against the latter, is still questionable, as is the strategy of some existing landlords incorporating their businesses to avoid stamp duty, while still re-taining the ability to claim tax relief.


INDU

STRY

UPD

ATE

8

One landlord with 36 properties worth £4m in Car-diff and south Wales told the Guardian newspaper that she makes a £50,000-a-year profit from the rent after mortgage costs, likely to drop by around £10,000 once the 2017 tax changes feed through. What worries her though is the possibility of an interest rate rise which she fears could push her profits to near zero.

However, most UK landlords anticipate that they will cope well with rising borrowing costs, with three quarters saying they foresee no issues pay-ing their mortgage. A survey conducted by YouGov found that the majority of landlords are financially resilient, with 60 per cent expecting that their rent-al income would remain higher than their mort-gage payments. 40 per cent say they have already saved enough money to account for the higher borrowing costs.

CML chief economist, Bob Pannell, has said:

“The reduction of tax reliefs available to private landlords from 2017/2018 onwards, announced by the chancellor in the summer 2015 Budget, will adversely affect the future cash flows for affected landlords. Landlords should be able to mitigate the direct financial impact in a number of ways. In-deed, the YouGov research corroborates our view that the overall impact will be to lift rents higher and to narrow the availability of homes in the pri-vate rented sector.”

Campaigners and tenant groups, as well as first-time buyers, have welcomed the clampdown on buy-to-let, but they have yet to feel the effects of this. Though house prices may stabilise in the meantime, there’s no sign that they will fall, and there’s every sign that rents will increase.

Small-scale landlords, on the whole, are confident they can ride the coming tax changes, even though many may curtail making further purchases. Larg-er landlords are more likely to shelter their prop-erty investments in limited companies in a move to protect themselves from some of the tax, though the economics of this are yet to be fully explored.

Given all of the above it seems pretty obvious that the government is intent on curbing the excesses of buy to let, while at the same time making the landlord operators more professional. There is to be a clamp down on rogue landlords in coming leg-islation, which should make it easier and quicker for local authorities to bring offenders to book and stop them in their tracks, something responsible landlords will welcome.

Meanwhile, schemes will emerge that help land-lords skirt around the difficulties; for example pur-chases below £40,000 are stamp duty exempt, and there are plenty of these types of property yielding £300 per month rent in the north-east of England and some other locations.

Build-to-rent will become a possibility for some landlords: this will not only please the government by adding to the housing stock in in-fill locations, it gives landlords the benefit of no VAT or stamp duty and a new property worth thousands more than the build-cost.

Historically, new builds command higher rents with lower maintenance costs and can deliver better returns. As long as landlords can find and develop land with brand new homes, residential property investment in this way can be relatively easy and safe. One company offering a find, plan, design and build service is Benfield ATT Group.


whAT Do ThE TAx chANgES AcTUAllY mEAN?The mortgage interest relief restriction is probably the most significant change to taxation for land-lords in years. Under this proposal, subject to the passing of the Finance Bill, a restriction on mort-gage interest relief will be phased in over a 4-year period from April 2017. This will apply to all those buy-to-let landlords who are higher and additional rate taxpayers.

This move will gradually reduce the 40% and 45% tax relief for mortgage interest until it is fully re-moved in 2020/21. Landlords will be able to make a claim for a tax credit of up to the basic rate of tax (currently 20%) of their financing costs.

This will be a blow to those landlords who current-ly deduct their finance costs - mortgage interest and fees, interest on loans to buy furnishings etc - from their rental income to arrive at a taxable profit figure. This will no longer apply and will im-pinge on those basic-rate tax paying landlords who are pushed into a higher rate tax band when other forms of income are combined.

The Finance Bill includes measures affecting high-er and additional rate tax payers on income from their residential properties from 2017-18. For tax year 2017-18 finance costs will be 75% of the total, reducing to 50% in 2018-19, 25% in 2019-20, and zero for 2020-21.

Individuals will be allowed to claim a basic rate tax reduction (currently 20%) from their income tax li-ability but only on the portion of finance costs not deducted in calculating the profit as above.

The allowable tax reduction will then be capped at the basic rate (currently 20%) of the lower of: (1) the profits of the property enterprise in that tax year, and (2) the landlord’s total income (excluding savings income and dividend income) that exceeds the personal allowances for that year.

Where there is an excess of finance costs on which basic-rate tax relief cannot be claimed, for exam-ple, where these finance cost exceeded the rental income, these can be carried forward.

Where a landlord has a large highly geared port-folio of properties, and given the possibility that interest rates will rise in the near future, it is quite possible that the individual’s tax liability could ex-ceed the net rental income. In some cases with gearing in the higher range the landlord could ef-fectively be paying tax on this income at over 100% after April 2020.

INDUSTRY UPDATE

9


INDU

STRY

UPD

ATE

10

whAT AboUT ShElTERINg IN A comPANY?Effectively the tax liability in the above situation could be halved if the properties where held in a corporate structure, taking into account the Bud-get changes to the taxation of company dividends. The landlord would get full interest relief for his mortgage interest but would need to factor in the increased accounting and company audit costs.

Any decision to sell currently privately owned properties into a company would likely incur stamp duty and possibly capital gains tax liabili-ties, though under some in circumstances some of these costs could be avoided or deferred until the properties are sold. Anyone contemplating such a move should seek professional advice.

It may not be economically viable to incorporate small portfolios, but other measures such as trans-ferring assets between spouses could be, and when incorporation is a viable option, allowing profits to accumulate within the company long-term makes it even more sense.

According to lenders Aldermore, 42% of their bro-kers have seen a surge in applications for buy-to-let loans from limited companies as landlords pre-pare for tax hikes starting in April. And the latest Buy-to-Let Index from specialist mortgage broker Mortgages for Business found that 38 per cent of its applications by December 2015 were compa-nies. This figure was up from 15 per cent in Octo-ber, the month before the second tax change was announced in the Autumn Statement.

These figures come at a time when Aldermore have reduced their rates and removed the fees on its limited company mortgages in anticipation of this increased demand, but investors need to be aware of the risks and costs involved. This may in-volve landlords in giving personal guarantees and while companies can still get the mortgage interest relief, only businesses with more than 15 proper-ties will be exempt from the stamp duty surcharge. Also, there is also always the regulatory risk that the tax rules may be changed again in the future.

The Chancellor thinks his changes make the tax system fairer by taxing more those landlords with higher incomes, making sure they no longer re-ceive the most generous tax treatment. However, some are predicting that it will be tenants who will really suffer from these changes, through increas-es in rents caused by a reduction in the supply of rental property on the market. ⌂

Tom Entwistle is Editor of LandlordZONE®

®

Professionals Rely on TenantVERIFY®

Established - 1999 - 0845 260 4421 - TenantVERIFY.co.uk

TenantVERIFY®

for Landlords & Letting Agents Credit Checks & ReferencingWe verify thousands of Tenants and Guarantors for busy Landlords & Agents every year.

We pride ourselves on our First Class, Fast & Efficient Credit Checks & Referencing -Residential & Commercial Tenants, Guarantors & Limited Companies.

Basic Credit Checks within 2 hours, full Referencing Checks normally within 2 days, & International Checks within 5 days.

C

M

Y

CM

MY

CY

CMY

K

TV_LALS_v14-2.pdf 1 2/5/2014 9:52:43 AM


INDU

STRY

UPD

ATE

followINg ThE ANNoUNcEmENT fRom ThE homE offIcE ThAT fRom 1ST fEbRUARY 2016, ThE RIghT To RENT SchEmE wIll bE ExTENDED AcRoSS ENglAND.Wayne Treveil, CEO of Tenants Plus Ltd, who provide a property marketing and tenant lead service to the industry, declares that it will have little impact on the private rented sector, but also throws a warning to landlords and agents; “make sure it’s included as part of your comprehensive tenant reference check to ensure you’re being compliant.” Says Wayne.

He continues: “It’s debateable as to what impact the rolling out of this scheme will actually have on the private rented sector; I can’t see it having much at all. Rogue landlords, agents and tenants will continue to operate under the radar with reputable landlords and agents, who fortunately make up the majority, continuing to act in a responsible manner. It will have little or no effect on their current processes and op-eration with a large number of agents already see-ing and copying the prospective tenant’s passport ID and if they are overseas tenants from outside the EU, checking their visa status as part of the pre-tenancy checks.

Having said that, landlords who don’t make the checks could face a hefty penalty of up to £3,000 per tenant if they are found to be renting out a property to someone who is in the UK illegally, so it’s import-ant landlords are aware of the scheme and act ac-cordingly. Letting agents also need to protect their landlord clients and ensure it’s in fact part of their credit check and referencing service.”

Tenants Plus use a specialist referencing provider, Van Mildert, to undertake any additional Right to Rent checks. Wayne says: “All our tenants have undergone the complete pre-tenancy Right to Rent checks prior to viewing properties with letting agents. This gives our registered agents and their landlord’s complete peace of mind that the tenants are legally permitted to rent in the UK.” ⌂

RogUE lANDloRDS, AgENTS AND TENANTS wIll

coNTINUE To oPERATE

Wayne Treveil - Tenants Plus

12

Industry leading and independent buy to let property investment advice

Exclusive offer for the Landlord Investment Show FREE Buy to Let Property & Financial Advice for the first

100 enquiries ONLY* Valid only until 28th February and is filling fast,

so reserve your spot today! Get advice on the following from the experts; • Buy to let property investment fundamentals• The recent budgetary tax changes to buy to let• Our stringent selection criteria for sourcing the most suitable properties• A full portfolio review and a review of your goals to ensure you are on track• A full review of your current finance structures and financing ability• A full review of your estate planning arrangements• Our company structure and areas of expertise, to see if we can help• Answers to all of your questions regarding property investment and financial strategies

*Valued at between £500 & £2,500 absolutely FREE!

Simply text 'Landlords' to 88802

(I 0203 8000 600 Ill [email protected] <ttl www.nova.financial

Download your copy of our Smart Investor Guides now at www.smartinvestorguide.com/free-eguides/

Nova Financial Ltd are authorised and regulated by the Financial Conduct Authority (FCA). Nova Financial Ltd are registered with the Property Ombudsman and the Information Commissioner's Office.

� g+ f in


TAx

ADvI

cE

14

wEAR & TEARTax number 1 you probably know about. The Chancellor is proposing (i.e., it will happen) to re-move the 10% Wear and Tear Allowance enjoyed by landlords of furnished properties.

In a consultation document it is proposed that as from 6th April 2016 the ‘Wear and Tear Allowance’ is to be replaced by a new ‘Replacement Furniture Relief’ (RFR) for all landlords whichever type of property, furnished or unfurnished. The rules al-low for the deduction of costs actually incurred for the replacement of furnishings. The type of items will be limited to those used by tenants.

Certain items are deemed to be part of the fab-ric of the property itself (e.g. baths, toilets, boilers, and fitted kitchens), replacement of these will still be treated as an allowable ‘repair’ to the property itself.

INTEREST TAx RElIEfTax number 2 is the proposed way that mortgage interest tax relief is to be changed over a 4 year period from April 2017. The change is that top rate tax payers will only be able to claim the basic rate of tax - 20%, rather than 45%.

Note that another effect of this is that many land-lords currently paying tax at 20% might find them-selves in the 40% tax band for part of their income.

QUARTERlY RETURNSTax number 3 - Buried deep in the details of the last Budget was the information that landlords making more than £10,000 per annum profit will have to file quarterly tax returns by 2020.

This affects self-employed workers, landlords and small business owners.

If you use an Accountant to prepare, or check your returns these costs will rise as well.

Whilst not stated, is this the first step to landlords having to pay their tax returns quarterly as well?

TAxES, TAxES whEREvER YoU look - 6 NEw TAxES

Peter LittlewoodSouthern Landlords Association


TAx ADvIcE

15

STAmP DUTYTax number 4 - both buy-to-let landlords and sec-ond home purchasers will, from 6th April 2016, find that Stamp Duty will rise by 3%. Example: a £250,000 property purchase could cost £7,500 more in Stamp Duty alone.

At the moment there some exceptions to the extra 3% rule. Firms owning more than 15 properties will not have to pay the increase - but this is subject to a Treasury consultation. Commercial property; house boats; caravans and mobile homes are all exempt (at the moment). So perhaps now is the time to diversify - Buy to Let House-Boat anyone?

cAPITAl gAINS TAx (cgT)Tax number 5 - CGT on profits on property other than the main residence will have to be paid within 30 days of completion of the sale, from 2019.

A (small) silver lining to the extra 3% stamp duty cloud is that currently the increased costs will be claimable against Capital Gains Tax (CGT) when you sell - unless a future budget closes that facility.

INSURANcE PREmIUm TAx (IPT)Tax number 6 - With effect from 1st November 2015 the standard rate of IPT was increased from 6% to 9.5%, and that will reflect in your buildings and vehicle insurance policies and is an increase of over 30%.

Landlords should note this increase, as when they receive their insurance premiums any increase will, in part, reflect this particular tax.

USE AN ExPERIENcED TAx AccoUNTANTIt is vital that you take expert advice on these mat-ters as soon as possible. Don’t put your head in the sand. ⌂

LET US HELP YOU PROTECT YOUR RENTAL INVESTMENT

SLA Members enjoy:

Trade Discount / Unlimited Free Telephone AdviceRegular Newslett ers and E-Bulleti nsAll Appropriate Documents on-line

Automati c Insurance to Cover an Inland Revenue Investi gati onFull, Regularly Updated Website and Much More Beside!

To fi nd out more, contact us on:

SOUTHERN LANDLORDS’ ASSOCIATIONRiverside Centre, River Lawn Road, Tonbridge, TN9 1EP

Tel: 01732 56 56 [email protected] / www.southernlandlords.org


16

lAND

loRD

ASS

ocIA

TIoN

whEThER YoU hAvE oNE PRoPERTY To lET, oR mANY hUNDREDS, IT IS vITAl ThAT YoU kEEP AbREAST of lEgISlATIoN; AND YoU PRoTEcT YoUR INvESTmENT.The UK Landlord Accreditation Partnership (UK-LAP) is the umbrella organisation for the major ac-creditation schemes in the UK and offers a pletho-ra of courses to bring landlords up to letting speed, and then to maintain that competitive edge. They do this through their impressive range of train-ing courses – to be seen on their web site www.londonlandlords.org.uk (the scheme originated in London, hence the London name).

Added to this, UKLAP are just about to run their third biennial awards ceremony, at which those landlords; agents and local authorities who give that extra mile will be recognised. The awards ceremony is to be held in the Grand Connaught Rooms, London on Friday March 18th.

Entitled ‘Your investment & The Law’ the confer-ence has top rated speakers on:

� legislative changes in the PRS;

� finance, and a tax exit strategy;

� mortgages and market regulations concerning your investment.

The main sponsors of this magazine, the Land-lord Investment Show, are proud to be a platinum sponsor of this conference.

Now in it's fourth year, the Landlord Investment Show has grown from strength to strength, sucess-fuly holding over 27 events and reaching 10 coun-ties in over 16 locations throughout the U.K.

So whether you are keen to get the latest informa-tion from the industry’s leading speakers; network with other landlords/agents; get dressed up to the nines; enjoy a top quality meal and a thoroughly memorable night out, then you can do them all at the Grand Connaught Rooms on Friday March 18th.

See www.londonlandlords.org.uk for details. ⌂

YoUR INvESTmENT AND ThE lAw.

UK Landlord Accreditation Partnership


INvESTmENT oPPoRTUNITIES

wokINg - wIllIAm booTh PlAcE£315,000

Two bedroom apartmentEn-suite bathroomFull width balconyUnderground parkingNo Onward Chain

wEYbRIDgE - fERNIhoUgh cloSE£369,950

Two bedroom houseClose to transport linksFitted wardrobesPretty rear gardenParking to front of property

wokINg - mIDhoPE cloSE£299,950

First fl oor apartmentTwo double bedroomsClose to transport linksGas central heatingOver 900 years on Lease

mANchESTER - cITY lofT£197,000

Two bedroom apartmentClose to transport linksEn-suite bathroomCeiling to fl oor windows24hr concierge service

wEYbRIDgE - wEIR coURT£375,000

Two bedroom fl atOpen plan lounge/dinerNo onward chainLift accessParking space

mANchESTER - AlExANDRA RoAD SoUTh£179,950

Duplex apartmentTwo double bedroomsSecure developmentExcellent fi nish through-outOverlooking Alexandra Park

Yield: 4.76%Number: 01483 762 626www.leaders.co.uk






INvE

STm

ENT

oPPo

RTUN

ITIE

S

18



TASmAN RoAD£900,000

A large five bedroom terrace houseSuitably arranged over four floorsGood-sized double bedroomsLoft space and extra storageStylish shower room and separate bathroomEnormous Kitchen and Diner - open planSecluded rear terraceGreat location well served by local amenities

RIgbY cloSE£260,000

Three BedroomsNo onward chainDouble glazingCul-de-sac locationGround floor flatInvestor friendly

EAToN hoUSE£499,000

Two bedroomsFully fitted kitchenStylishly decorated bathroomGood storage spaceDoor entry system

gomShAll gARDENS£245,000

2 BedroomsOwn GardenNear Kenley BRQuiet locationCul-de-sacPriced for quick saleInvestor Friendly

fRANklIN wAY£235,000

Two bedroomsPurpose built flatsCommunal gardenClose to local amenitiesClose to transportLarger than average flat

cANTERbURY RoAD£255,000

2 BedroomsOn-street Free ParkingRear GardenNew lease (optional)Close to local transport and amenities

Yield: 6.00%Number: 020 8683 0012www.top-moveuk.com






19



oNE of ThE bIggEST bARRIERS To moST INvESToRS AchIEvINg ThEIR goAlS IS NoT USINg ThE coRREcT STRATEgY.With so many strategies to choose from it is very easy to become confused and over whelmed or spend too much time chasing shiny pennies trying this strategy, then that strategy, and never really getting any tangible results.

Unfortunately, there is not one strategy that fits all. The strategy you use will depend very much on what you want to achieve, the resources available to you and to some extent your geographical location. The other problem is that most people simply don’t know what they don’t know. How can you work out what strategy is best for you if you are not aware of all the strategies?

This lack of knowledge can be very expensive because it means that you could be leaving a huge amount of money on the table by walking away from profitable deals just because they don’t fit your personal strategy and so you don’t know what to do with them.

In this article I would like to take you through a thinking process to help you start to work out which might be the best strategy for you given the resources available to you. Before I do this, we need to consider what might happen to the UK property market in 2016 as a result of all the changes announced by the Government in 2015. There is no doubt in my mind that the proposed changes to tax relief on mortgage interest, removal of the 10% wear and tear allowance and of course the 3% stamp duty, will put off many amateur investors from getting into property and may even encourage a few long term investors to sell up their property portfolios sooner rather than later.

Simon Zutshi property investors network

At all of the 51 property investor network meetings, around the UK this month, the theme is “How to find the best strategy for you in 2016”. This is such an important topic, especially with all the

changes in the property market over the last six months, that I thought it would be useful to cover some of the main points for you in my Landlord Investor article this month.

how To fIND ThE bEST STRATEgY foR YoU IN 2016

20

INvE

STm

ENT


I think this will cause either a fall in supply (or a slowdown in the increase in supply) of private rented accommodation, which combined with an increasing population will cause rents to rise in 2016. This is of course is good news for landlords but not so good for tenants. I think there will also be a mini boom in the property market before April caused by investors who are keen to purchase before the extra 3% stamp duty charge is applied. To conclude it looks like prices and rents will rise in 2016 so time to get a move on. But what strategy should you follow?

whAT IS YoUR fINANcIAl PoSITIoN?The starting point to work out which strategy is best for you is to look at your personal circumstances in terms of finance. There are two aspects we need to consider here: First of all your ability to get mortgages, and secondly your access to deposit money.

Let’s look at Mortgages first. Can you obtain Buy to Let mortgages? This may seem like an obvious question but I meet many investors who just don’t know if they can get a mortgage or not. It is a very good idea to speak to a fully independent mortgage broker to get a decision in principle (dip) just to check if you can get mortgages or not. Factors that will affect this are your income, your credit score and even factors such as you being on the local electoral register.

Hopefully you can obtain Buy to Let mortgages as this means there will be more opportunities open to you. If you can’t get a mortgage right now, then don’t worry.

It is not a problem as there are still plenty of profitable strategies you can use, such as Rent to Rent or Purchase Lease Options whereby you don’t need a mortgage.

Alternatively you could use strategies such as joint ventures where you put the property into the other person’s name and have a deed of trust put in place by solicitors to protect your interests. This might actually be preferable for the joint venture partner if they are putting all the money in as it may give them more security for their investment.

The second consideration as far as finance is concerned, is how much money do you have. No matter how much money you have or don’t have, you will run out of your own funds at some point so it is good to get comfortable with the concept of using other people’s money (OPM).

The first place to look for OPM is with your family and friends. Don’t worry if your contacts don’t have lots of money in the bank as you can use OPM in the form of equity in properties or even money tied up in other people’s pensions

Most people don’t like to approach their contacts asking for funds because they feel like they are begging for help. If you think like this, no wonder that none of the people you ask seem to have any money, or that they want to lend to you.

A better approach is to offer to share some of your profits with other people and see who is interested in that. Done in the correct way you will have a very different response.

Very often people will only lend money to you if they can see a track record of proven success. If you have enough money for one deposit then you should use your money first and show potential lenders what you have achieved already.

If you don’t have enough for a deposit then Rent to Rent can be a great strategy to start with to build up some track record.

21

INvESTmENT


how mUch TImE To Do YoU hAvE?One of the main reasons many people invest in property is to replace their income so that they can spend their time however they wish instead of having to work for a living.

Sounds great but you do need to put in some time upfront in order to create the income from property to replace what you currently earn. The amount of time you have available will affect the kind of strategy you should use. If you are short of time, then you probably do not want to do a Rent to Rent strategy which is very hands on. Alternatively if you have plenty of time you can focus on finding some fantastic property deals and then find other people to fund those deals.

The important thing to remember here is that, in the same way that you can use other people’s money, you can also use other people’s time through the use of leverage. You don’t have to do everything yourself, in fact that would be a really bad idea. You should focus on the things that you are really good at, where you add the most value and get other people to do everything else for you.

Remember the quote from Robert Kiyosaki’s book, Rich Dad, Poor Dad; “ Poor people spend their time to save money. Rich people use their money to save time.” You really must value your own time. I see investors doing things they really should not do just to save money. An example would be an investor deciding to paint a property themself, rather than get a professional decorator in to do the job because they want to save money.

Yes they might well save themselves some money but what is the opportunity cost of their time? What could they be doing with that time rather then painting a property? A much better use of their time would be finding the next great property deal, which could make them tens of thousands of pounds in profit. All the time they are stuck with a paintbrush in their hands is time they are not out looking for the next deal. This is a very common mistake that I made myself 15 years ago because at the time I did not know any better. There were no magazines like YPN, no webinars, no network meetings, no seminars it really was a case of learning by trial and error! Nowadays you don’t have to learn the hard way on your own.

Do YoU kNow whAT YoU NEED To kNow?The good news for you is that there is so much information available these days. The bad news is that all this information can be overwhelming. When people are overwhelmed they get paralysed into inaction.

The main problem is that you may not know what you don’t know. Reading this magazine and talking to other investors at property investors network meetings is a great way to raise your awareness of some of these strategies, which other people are using right now in your area. Once you have identified what you want to know it makes a lot of sense to invest in your own education to gain the specialist knowledge you need to make sure you get it right, rather that learning the hard way by making mistakes doing it on your own. Education is not as expensive as ignorance.

It is amazing how many people I see making really bad, expensive mistakes with HMO’s, Rent to Rent, Purchase Lease Options and even Commercial to Residential all because they did not want to spend the money to educate themselves properly, and so end up wasting a lot more money than they would if they gained the correct training. These days there is no excuse for not knowing what to do with so much information readily available

22

INvE

STm

ENT


YoU NEED To focUS!When you find the strategy that meets your needs and works with your personal resources you need to educate yourself, do your due diligence, and then keep going. Be persistent and never give up.

FOCUS is an acronym for, Follow One Course Until Successful. I believe you should spend 80% of the time you allocate to investing, focusing on that one main strategy.

15% of your time should be focused on secondary property strategies that can make you money and 5% of your time you need to spend on educating yourself, researching new strategies and learning how to improve on what you are currently doing.

mY INvITATIoN To YoUAs a follow up from the January property investor network meetings at which our Property Mastermind coachers and pin meeting hosts will be talking about “How to pick the best Strategy for you in 2016” I am running a 90 minute, no cost, online training session about how to raise your awareness of some of the other property investing strategies and overcome the overwhelm when you don’t know what strategy to follow.

To join me on this educational online training session just register your interest at this website and we will send you all the login details for this special training.

www.pinwebinar.co.uk/2016 ⌂

View our massive range online at: www.mattressman.co.uk/contract* Orders over £45 qualify for FREE NEXT DAY DELIVERY made before 4pm Monday to Thursday.

With FREE Next Day Delivery* no matter how many mattresses or beds you need!

Call Us NOW for our Best Offers on: 0800 5677625

One of the Leading Suppliers of Beds & Mattresses with FREE FAST DELIVERY ACROSS THE UKWe can supply you and your business with;• Mattresses • Bed Frames • Divans • Pillows & more

TRADE SALESTRADE SALES

Pillows & more

With our

Custom & Special Sizes,

we are con� dent

we can supply You with

the beds you need at a

price that can’t

be beaten!

23

INvESTmENT


A NINjA IS A PERSoN SkIllED IN NINjUTSU, A jAPANESE mARTIAl ART chARAcTERIzED bY STEAlThY movEmENT AND cAmoUflAgE.So a Ninja investor is someone who buys property using stealthy movement and camouflage. In real terms that means someone who knows things that others don’t and is able to do things that others can’t.

The keys to success are knowledge, mind-set and swift action – here are my Top 10 characteristics of a Ninja Investor.

1. They grow their portfolio (and bank balance) faster than most property investors.

2. They don’t tie up their capital in buy-to-let mortgages or limit their ability to buy more properties each year.

3. They have a cash buyer mind-set, so they don’t think in terms of mortgages and deposits. They know that the cash buyer mind-set means they only need thousands, not hundreds of thousands, to buy like a cash buyer.

4. They are able to buy at lower prices with less of their own money in each deal. They often get BMV offers accepted for the properties they purchase.

5. They can buy properties that traditional lenders won’t touch; properties that are unmortgageable – although not necessarily high risk (and they know how to assess the difference).

6. They know how to negotiate crazy deals at well below market value rates and sell properties at a much high price than the one they’ve paid. Bigger profits are a given.

7. They often get any money they’ve invested in the property out on completion, keeping their cash free for the next project.

8. They know that, when buying at auction, the most profitable deals are often those bought pre or post auction, rather than in the highly-charged auction room.

9. They understand that increasing the value of a property doesn’t necessarily mean a refurb – and know how to use the buy/no refurb sell model effectively.

10. They make bigger profits, whether they buy to sell or buy to let.

If you don’t think this is consistently possible, I can introduce you to many people who operate their portfolio exactly like this. People who have:

� Bought a house with less than 10% deposit and made £62K profit in three months.

� Borrowed 112% of the purchase price – and created an additional £37K in equity.

� Bought a property and sold it two months later with a profit of nearly £33K – without a refurb.

� Put in a deposit of £3K and made £51K in three months.

These are all real case studies. Positive Property Fi-nance has a wide range of bridging lenders and will match you up with the right one for your property deal. We can also teach you how to use Ninja Inves-tor strategies on a 2-day workshop. Give us a call on 01206 586586. ⌂

whAT IS A NINjA INvESToR?

Kevin Wright - Positive Property Finance

INvE

STm

ENT

24

DOUBLE GUARANTEE

• If you’re not happy withthe course and tell us bylunchtime on day 1 - you’ll geta FULL REFUND; no quibbles.

• When you bring your first deal toour bridging brokerage; - you’llget the FULL COST OF YOURCOURSE REFUNDED at completion.

Property Mastery : Recycle Your Cash

Is your property investment giving you the results you want?

If you’re finding:

• The best deals slip through your fingers to cash buyers

• You want to recycle your cash but your portfolio isgrowing too slowly because all your cash is tied up

• Financial freedom is still not within your reach

The Ninja Investor Programme will reveal:The Fast Funding Formula™ Discover how to buy propertylike a cash buyer – without a 6 figure bank account

The Negotiation Transformer™ Find out how to makeridiculously low offers – and get accepted

The JV Profit Retainer™ Make sure you don’t give away anyof your profits that you don’t need to

The Rapid Cash Recycler™ Learn how to predict post-refurbvalue accurately, before purchase

And Ninja Investor Strategies™ Transform your mind-set toenable you to transform your property investment.

NEW for 2016 - 2 day format with even more hot tips and smart strategies.Join a Ninja Investor Programme in:

London 16/17 January 2016 Bristol 6/7 February 2016Leeds (new) 27/28 February 2016 Birmingham 19/20 March 2016

Find out more – and book your place07889 526979 • www.ninjainvestorprogramme.co.uk

YourNinja TrainerKevin Wright

28319 Ninja investor A4 ad 12/10/2015 10:22 Page 1

London 16/17 April 2016


ThE hoUSINg AND PlANNINg bIll IS cURRENTlY mAkINg ITS wAY ThRoUgh PARlIAmENT followINg A govERNmENT coNSUlTATIoN oN 'TAcklINg RogUE lANDloRDS AND ImPRovINg ThE PRIvATE RENTAl SEcToR.'They are proposing a blacklist of persistent rogue landlords and letting agents. In response, Paul Shamplina, Founder of Landlord Action, is calling for a blacklist of persistent rogue tenants to be made public.

Some of the consultation’s key discussion points in tackling the worst offenders within the private rental sector include, introducing banning orders and civil penalties of up for £5,000 for rogue land-lords, speeding up repossessions of abandoned properties and producing a rogue landlord/letting agent blacklist. It is currently suggested the black-list of rogue landlords and agents would be avail-able to local authorities and central Government, enabling them to keep track of those who had committed offences.

Paul Shamplina, who was part of this consulta-tion, is calling for the Government to show great-er equality and more openness. He argues that if there is going to be a list of rogue landlords and let-ting agents then it should also include agents that have multiple money judgements against them by landlords for non-payment of rent. Mr Shamplina believes that all associations and redress schemes within the PRS should also put their banned mem-bers on this list. He thinks that the list should in-clude rogue tenants and, most importantly, all the information should be made public.

He explains “We are constantly hearing about ‘rogue landlords and agents’. But to address issues in the private rental sector, we should also consid-er ‘rogue tenants’. Last year there were 161,000 possession claims issued in England and Wales.

lANDloRD AcTIoN cAllS foR A RogUE

TENANT lISTPaul Shamplina - Landlord Action

lEgA

l

26

lANDloRD INvESToR January 2016

At present, there is no central database where pos-session orders with money claims are registered, as the courts do not recognise possession claims with arrears as a County Court Judgement. If they did, this information would show up on tenant referencing. At present, a rogue tenant can move from property to property running up rent arrears and it does not show up on referencing unless the landlord goes to additional expense of trying to enforce the money order. If we are to protect landlords at pre-let stage, in the same way we wish to protect tenants, this should also be made avail-able.”

Mr Shamplina continues “The Government is clear-ly committed to improving standards in the PRS.

One of the greatest challenges is finding a balance between supporting good landlords and agents, whilst cracking down on criminal activity without burdening the sector with unnecessary, expensive regulation. I believe that one of the best ways to do this is by giving the consumer (landlords and ten-ants) access to information. Allowing them to have freedom of choice about who they rent from.”

92% of respondents to the Government survey are agreement that there should be a blacklist of persistent rogue landlords and letting agents. Mr Shamplina says making the information available to the wider public would support those reputable landlords and agents and act as an effective deter-rent. ⌂

lEgAl

We’ll ensure you don’t get complaints from your tenants this winter and safeguard your investment. EnviroVent have helped thousands of households cure condensation and mould...AND have even saved them money.

Call now quoting FREE advice with your local Specialist Ventilation Advisor.

Fed up with your tenants complaining about condensation, mould and ‘damp’?

Lost money re-decorating your properties?

Concerned about a visit from the environmental health officer?

Lost income from your tenants who move?

27


The financials around Buy to Let are a significant part of how mortgage applications are assessed and offered. Lenders are increasingly cautious and their criteria reflects this.

Mike Brown, Director at Crystal Clear Financial Ser-vices, explains: “Whether you are an experienced landlord or new to property investment, lenders want to satisfy themselves that your income, rent-al calculations and portfolio size are right.

“When looking at income, lenders want to be sure that you have the disposable income to support rental voids. Employed applicants often need to supply payslips, and self-employed clients will need to provide their latest SA302 and Tax Year Overviews. Lenders are also keen to see proof of rental income.

“An increasing number of landlords are caught out on rental calculations. With tenants in situ, it is easy to miss regular rent reviews. However, not meeting rental calculations can prohibit refinance and make it difficult to maintain your purchasing power.”

2016 is an important year for landlord investment, with many changes due to take place. If you are looking to invest in property, you may want to con-sider the impact of:

Lender income criteria, Changes to Stamp Duty for second homes and Buy to Let properties, Lender portfolio sizes, Buy to Let regulations and Increas-ing lender rental calculations.

A good mortgage adviser can save you time and money – here at Crystal Clear Financial Services, we make complicated things seem simple. Our fi-nancial experience means we can work with you and a range of lenders to find the best deal and investment for you.

We are a whole market broker. In addition to Buy to Let, we could help you with:

� Let to Buy

� HMO

� A Limited Company purchase

� Bridging finance

� Secure loans.

Crystal Clear Financial Services are proud mem-bers of Checkaprofessional.com and were short-listed in The ESTAS Top 9 Brokers for 2015.

To discuss your situation and mortgage require-ments, call us on 01483 487417 or email [email protected]

You can also visit our website at www.crystal-clearfs.com or find us on Facebook /CrystalClear-Mortgages and Twitter @crystalclearfs ⌂

hElPINg YoU To fINANcE YoUR INvESTmENT

Mike BrownCrystal Clear Financial Services

fINA

NcIA

l

28

LANDLORD INVESTOR TVY O U R S O U R C E O F P R O P E R T Y I N F O R M A T I O N

Landlord Investor TV is a television show dedicated to the world of property, serving the commercial needs of those working in and around the property industry.

Airing monthly on Sky channel 238, LI TV is a show dedicated to education and up-to date information about the property market, investment and legislation covering:

The blend of informative content ensures a wide range of viewers, from the general public to landlords, investors and property industry professionals. This in turn creates brand

authority and offers a unique platform for our clients to showcase their services.

LI TV gives companies the opportunity to advertise and sponsor the show.

For further information and advertising rates please contact a member of the team:

0208 656 5075 www.landlordinvestmentshow.co.uk/LITV

FINANCEDEPOSIT SCHEMES

PROPERTYSOURCING

BUYING ATAUCTION

TAX ADVICE MORTGAGES REFERENCINGLEGALADVICE


whIlST ThE SUPERcARS AND holIDAYS wIll hoPEfUllY follow AS YoU bEcomE A SUccESSfUl lANDloRD, gETTINg ThE RIghT lANDloRD INSURANcE IN PlAcE IS ESSENTIAl.Landlord insurance and associated products are there to protect your property, your investment income, yourself and your tenants.

However there is a big difference between just having insurance and having the 'right' insurance.

gETTINg IT RIghTChoosing the correct insurance comes down to what you are doing with the property and there are a number of questions that need to be thought through:

� Are you going to live in the property while you prepare it for letting?

� Is the property going to be vacant for a period of time?

� Are there major renovations taking place e.g. turning a house into flats?

� What tenant type are you looking to attract: professional couple, students, family?

� Will you be letting out the rooms individually or the property as a whole?

gETTINg STARTEDAS A lANDloRD:

fRom AN INSURANcE ANglE

Steve Cox - Alan Boswell Group

Driving supercars, going on Caribbean holidays, buying landlord insurance and seeing a world cup final. Just a few of the items on people’s bucket lists! Well maybe not all of them are, but if you are

becoming a landlord then one should be on you’re “to do list”... Landlord Insurance.

lAND

loRD

INSU

RANc

E

30


Knowing what you are doing with the property at the start and in the long term is fundamental to purchasing the right insurance and associated products. As a rough guide these are some of the products available:

� Landlords insurance – provides cover for buildings, contents and your liability as a property owner.

� Vacant property insurance – insurance for buildings that are vacant in the mid to long term.

� Renovation insurance – if a property is being renovated, full insurance is essential even if you are not living there.

� Rent guarantee insurance – covers loss of rental income if your tenant defaults on their rent.

� Legal expenses – provides cover for expenses incurred if you enter legal proceedings in relation to your rental property e.g. eviction

� Home emergency – helps with a variety of emergencies in the home e.g. boiler breakdown

� Tenants policies – there are also policies for tenants that provide an additional element of cover for you as a landlord – Tenants Contents and Tenants liability

DoN'T gET cAUghT oUTInsurance products come with a number of exclusions, limitations and conditions or in layman’s terms “catches”. If you don’t get the right insurance product for your property you could find your property plans going up in smoke both physically and metaphorically. Having an expert work with you from day one to understand your short, medium and long term plans is essential as Steve Cox, property insurance expert from insurance broker, Alan Boswell Group outlines:

“There are hundreds if not thousands of products available in the market for landlords from an insurance perspective. It’s our job to hand hold landlords through the process and help them choose the right products.

“New landlords should not be expected to know the in’s and out’s of every policy and what it does and doesn’t cover, let alone the terms and conditions applying.

"We have been working in property for over 30 years and have seen the various paths that landlords take. Over that time we have tailored our products and service to what landlords need. Whether it’s a first time landlord buying a two up two down to rent out, an accidental landlord who has inherited a property or a first time investor looking to develop a property into a House of Multiple Occupancy (HMO), we know what their needs are.”

So I hAvE A PRoPERTY To RENT, whAT Do I NEED To Do?To explain the insurance process we’ll use an imaginary case study.

Mrs & Mrs Green have purchased a property to rent.

Mr and Mrs Green already have their own home and have paid off their mortgage and have received a windfall, which in conjunction with a buy to let mortgage allows them to purchase a property to rent.

STEP oNE: PURchASE lANDloRD INSURANcEThe couple need to purchase landlord insurance for a number of reasons.

bUIlDINgS covER

To protect your investment, the main structure of the property. If the property were to subside, burn down, or be damaged by extreme weather, your buildings insurance policy covers the costs of rebuilding or repair.

loSS of RENT covER

If there is a claim that leads to the property being uninhabitable Mr and Mrs Green could lose rental income. This cover ensures they will receive the income needed to pay their mortgage.

lIAbIlITY covER

In case of injury to the tenants or damage to their property due to the owners negligence.

coNTENTS covER

This will protect the white goods and other fixtures and fittings that the couple have in the property.

lANDloRD INSURANcE

31


STEP Two: TENANT REfERENcINgNow Mr and Mrs Green are ready to rent the property they need to ensure they have the right kind of tenants. This is an important part of the process and can stop problems occurring down the line. Tenant referencing covers the following:

cREDIT hISToRY

A record of the prospective tenants borrowings and repayments.

EmPloYmENT AND AffoRDAbIlITY

To ensure they can aff ord to pay your rent.

PREvIoUS lANDloRD chEckS

To identify if there have been previous rental problems.

STEP ThREE: lEgAl ExPENSES AND RENT gUARANTEEAs long as the tenant has passed tenant referencing or a guarantor has, then the landlord has access to either legal expenses cover or legal expenses plus rent guarantee.

lEgAl ExPENSES covER offERS:

� Legal advice line

� Legal expenses for problems emanating from a property, e.g. smell

� Legal expenses to evict tenant(s)

RENT gUARANTEE INSURANcE cAN oNlY bE PURchASED IN coNjUNcTIoN wITh lEgAl ExPENSES, IT covERS:

� As per legal expenses

� Rental income of up to £2,500 per month

� Cover up to £25,000 or 12 months cover (whichever is exceeded fi rst)

lAND

loRD

INSU

RANc

E

Rent guarantee and legal expenses cover are both very important products, given there is a mortgage on this property it is essential for Mr and Mrs Green that they have paying tenants in the property. In the event of a tenant defaulting on their payments, ‘rent guarantee’ will actually pay you the monthly rent whilst your solicitors are obtaining payment from the tenant. This means you will not be out of pocket during this difficult process. These products also have strict notification periods and it is important that insurers are notified of any problems such as defaults as soon as they occur.

STEP foUR: homE EmERgENcY covERHome emergency cover is ideal for first time or single property landlords who do not want to be on call day or night for any emergencies. Home emergency cover provides the tenant and you with peace of mind in the event of the following:

This cover offers peace of mind if the house becomes inhabitable. There are costs built in to the policy to try and fix the problem or if not possible, it will cover the costs of moving the tenants to alternative accommodation for the night.

� Boiler or heating breakdown

� Utilities failure

� Inoperable toilet (where there is a single toilet)

� Failure or damage to external locks on doors or windows

� Infestations of pests

� Failure of roofing/guttering/piping

� Blockage, flooding or breaking of sewerage

This cover offers peace of mind if the house becomes inhabitable. There are costs built in to the policy to try and fix the problem or if not possible, it will cover the costs of moving the tenants to alternative accommodation for the night.

32


� Working from home – Always clarify the tenants use of the property as working from home does have different consequences for insurance and tenancies dependent on the level of work.

� Right to Rent – whilst a very new legislation for most of the UK there undoubtedly will be an impact on insurance if the Right to Rent legislation has not been followed. From 1st February 2016 Landlords must check tenant’s documents to check they are legally allowed to rent in the UK.

� Damage to rental property – if there is damage to property and it is not rectified there could be liability claims and problems in the future if an eviction occurs. Regular inspections can help restrict these issues.

Being a landlord can be frustrating and challenging but done right can be highly rewarding. Insurance, whilst not the most exciting purchase you will ever make, is a very important element. The world of insurance is always changing. Having an adviser that understands you and your property plans really can make a difference and keep you ahead of the game with any problems you could face with the constant changes in the sector. ⌂

Need advice?

Alan Boswell Group are one of the UK’s leading sources of Landlords Insurance and can help arrange suitable cover for your buy-to-let properties. For further advice contact Steve Cox.

T:01603 218 031 M:07766 715 654 alanboswell.com/landlords [email protected]

lANDloRD INSURANcE

No SUch ThINg AS A "TYPIcAl lANDloRD"This would be a very typical example of a first time landlord. There are of course many other variations with specific needs.

RElocATIoN

This would be where a landlord moves away from their own home but rents it out.

In this instance it is imperative that the landlord changes the insurance from a home insurance to a landlord insurance. Whilst some home insurers will cover change of use there won’t always be the necessary covers and there may be restrictions applied to the property.

mUlTIPlE TENANTS

Initially it could be a couple but they split and a friend moves in.

There are various definitions of what is considered as an HMO and various rules dependent on the council you reside in. If your property may be considered an HMO it is important you speak with your insurance company to clarify you are covered.

ThINgS To wATch oUT foRAs a new landlord you have 101 things to do and the ongoing introduction of new government legislation doesn’t make it any easier. Failure to follow legislation and local rules could leave your insurance invalid so it is important that you adhere to these. Some other areas of caution are:

� AST – Assured Short Term Tenancy agreements are highly recommended and for some insurance companies having these is essential even if it is between family.

33


For more information about the shows and how to register your attendance, visit the website or call us on:

0208 656 5075 // WWW.LANDLORDINVESTMENTSHOW.CO.UK

“Connecting Landlords, Investors and Property Professionals”

LEGALSERVICES

TAX ADVICE INSURANCE MORTGAGES REFERENCINGINVESTMENT

OPPORTUNITIESSEMINARS DEPOSIT

SCHEMESLANDLORD

ASSOCIATIONSNETWORKING

OPPORTUNITIES

A FREE ONE DAY EVENT FOR LANDLORDS & INVESTORS COVERING:

SEMINARS DELIVERED BY

INDUSTRYEXPERTS

WE BRING OUR EVENTS TOBUY-TO-LETHOT SPOTS

ALL ASPECTS OF THE PROPERTY

SECTOR COVERED

WE HAVE ORGANISED 28+ SHOWS IN JUST

TWO YEARS

NETWORK WITH PROPERTY

PROFESSIONALS, LANDLORDS &

INVESTORS

THOUSANDSOF LANDLORDS & INVESTORS ATTENDING

BUY-TO-LETCOMPANIES

SHOWCASING THEIR SERVICES

T H E U. K ’ S F A S T E S T G R O W I N G P R O P E R T Y R O A D S H O W

2016 SHOW LOCATIONSJANUARY 28TH GUILDFORD SURREY

FEBRUARY 24TH WEST HAM EAST LONDONMARCH 2ND COLCHESTER ESSEXMARCH 16TH BRIGHTON SUSSEXAPRIL 13TH CROYDON SURREYAPRIL 27TH DARTFORD KENT

MAY 12TH MAIDENHEAD BERKSHIRE

MAY 25TH STEVENAGE HERTFORDSHIREJUNE 21ST LONDON OLYMPIA

JULY 7TH INVESTOR RACEDAY EPSOM DOWNSSEPTEMBER 21ST MIDLANDS

SEPTEMBER 28TH NORWICH EAST ANGLIAOCTOBER 13TH OLD TRAFFORD MANCHESTER

NOVEMBER 8TH LONDON OLYMPIA

Our shows are supported by:

Guaranteed incomefor Landords

To find out more call 020 8547 5491 or email [email protected]

Are you missing out?Over 800 properties are already on our books. *Guaranteed income available through our fully managed service only

No fees or commission

Incentives paidFully managed or non managed options available

C

M

Y

CM

MY

CY

CMY

K

Banner Advert for landlord zone W190mm x H130mm D2.ai 2 12/11/2015 16:57

accomm

odat i n

g y

ou

r business with all design s

ervic

es

bo

th p

r int

and

di g i ta l •

advertising • branding • brochures • design for printflyers • leaflets • pop-up stands • roller banners

stationery • web design

for all enquiries about design work, print or digitalemail [email protected]

34

For more information about the shows and how to register your attendance, visit the website or call us on:

0208 656 5075 // WWW.LANDLORDINVESTMENTSHOW.CO.UK

“Connecting Landlords, Investors and Property Professionals”

LEGALSERVICES

TAX ADVICE INSURANCE MORTGAGES REFERENCINGINVESTMENT

OPPORTUNITIESSEMINARS DEPOSIT

SCHEMESLANDLORD

ASSOCIATIONSNETWORKING

OPPORTUNITIES

A FREE ONE DAY EVENT FOR LANDLORDS & INVESTORS COVERING:

SEMINARS DELIVERED BY

INDUSTRYEXPERTS

WE BRING OUR EVENTS TOBUY-TO-LETHOT SPOTS

ALL ASPECTS OF THE PROPERTY

SECTOR COVERED

WE HAVE ORGANISED 28+ SHOWS IN JUST

TWO YEARS

NETWORK WITH PROPERTY

PROFESSIONALS, LANDLORDS &

INVESTORS

THOUSANDSOF LANDLORDS & INVESTORS ATTENDING

BUY-TO-LETCOMPANIES

SHOWCASING THEIR SERVICES

T H E U. K ’ S F A S T E S T G R O W I N G P R O P E R T Y R O A D S H O W

2016 SHOW LOCATIONSJANUARY 28TH GUILDFORD SURREY

FEBRUARY 24TH WEST HAM EAST LONDONMARCH 2ND COLCHESTER ESSEXMARCH 16TH BRIGHTON SUSSEXAPRIL 13TH CROYDON SURREYAPRIL 27TH DARTFORD KENT

MAY 12TH MAIDENHEAD BERKSHIRE

MAY 25TH STEVENAGE HERTFORDSHIREJUNE 21ST LONDON OLYMPIA

JULY 7TH INVESTOR RACEDAY EPSOM DOWNSSEPTEMBER 21ST MIDLANDS

SEPTEMBER 28TH NORWICH EAST ANGLIAOCTOBER 13TH OLD TRAFFORD MANCHESTER

NOVEMBER 8TH LONDON OLYMPIA

Our shows are supported by:

Time for change?If you’re letting a property this season, now is the perfect time to consider changing your agent.

For a better lettings service contact us today

leaders.co.uk