Yes we consider our landlords to be our friends, they make it possible for us to continue to do the good work we do, and like all good friends we like to help out as much as we can!
It’s a difficult time to be a landlord. Some of the problems they are facing seem to be coming from all angles. Our portfolio is made up of landlords who have been with us for over 5 years. They have stuck with us through these difficult times and we think it may be because we try and tailor our business and make our landlords experience part of our decision making process.
So when we recently reviewed our gas plan which has remained at the same price since 2009, an increase was on the table. In these times we are also looking to offer value for money but with increasing prices for parts and labour and the cost of services we offer it was a legitimate way of recouping some of our costs. Obviously we are a charity and so we don’t aim to make profit from our business for financial gain however we are conscious of the heavy cost of running Temporary Accommodation and as a responsible housing provider it was something that could make us more comparable and give us a small increase in our income. However in our conversations with landlords, we understand the pressures they are under with taxation changes, rent smart wales, maintenance costs increasing and static rents, we felt an increase would be the proverbial straw. We therefore decided to keep our gas plan fixed for this year.
Here are the other ways we try and mitigate some of the heavy burden some of our landlords are carrying
The article in the property reporter indicated that ‘Currently 62% of landlords in the UK are experiencing tenant arrears and with rents predicted to rise faster than house prices over the next five years due to landlords coming under pressure to increase rents to offset tax increases in from April 2017, this situation is set to worsen’. http://www.propertyreporter.co.uk/landlords/what-will-be-the-biggest-issues-facing-landlords-in-2017.html
Granted our rents are set at around 10% lower than local housing allowance. These rents are set as something we can sustain for our landlords taking into account the cost of running the scheme. However, of some consolation is the Guarenteed rent we offer our landlords on our leasing scheme. With rent being paid contractually every month, without fail, 12 months of the year so long as the property is in a lettable condition we take some of the heat off our landlords who can relax just a little knowing that there is a steady, regular and reliable income coming in each month. In times where welfare reform is rolled out and tenants incomes can make renting unaffordable, many landlords are seeing frequent delays in payments as tenants circumstances change and tenants navigate the new benefit system. With the increasing popularity of zero hour contracts and the implementation of Universal credit many landlords are feeling nervous. Our scheme takes some of the uncertainty out of the equation.
A Hit on income
With the 3% stamp duty, buy-to-let tax changes resulting in tax being paid on income rather than profit and it becoming increasingly difficult to borrow and increased costs associated with registering and licencing under rent smart wales. Landlords are facing a squeeze on their finances. Our landlords who place all their units with us are exempt from the need to licence as a lessor you need only register with rent smart wales as we are a certified licencee. With no set up fees, agency fees, deductions for management fees the lower rent we offer is not looking so unworkable when factored in with the no stress and worry that when tenants circumstances change and rent payments stop or decrease. Our landlords can sleep at night knowing their mortgage payments are secure. http://www.bbc.co.uk/news/business-42989391
The cost of maintaining properties and keeping up with regulations.
Large repairs can be extremely costly and difficult to co-ordinate, finding a reputable contractor who will give you a good price and be able to do the work on your time frame is a big ask. Added to this is the roll out of regulations putting additional duties on landlords to ensure stock is to a good standard. Most recently, from 1.4.18 any new properties to be let must have an Energy Performance Certificate rating E or above. While expensive works do not usually come out of the blue in the current economy it is difficult to have the required sinking fund to cover costs of replacement roof, flooring and heating systems. We inspect our properties at least once a year and with an average tenancy of around 8 months our voids team are in your property making it re-lettable almost twice a year. We pick up any landlord repairs and have a dedicated property management officer to do the running around for you, co-ordinating repairs from quotation to completion. Of course many of our landlords like to arrange work themselves however for those out of town or without the necessary contacts this can be a great relief knowing that for an admin fee of £100 we can arrange works and recharge these against rental payments, giving a workable payment plans for work we carry out spreading the cost of expensive works when they are needed. We ensure that all our landlords are made aware of any regulation changes and that compliance is adhered to ensuring the correct certificates are obtained when old ones are due to expire.
In this time of post-Brexit economic uncertainty we hope you will consider us for your next investment project. 51% of our landlords have been with us over 5 years, 75% being with us over 4 years which we hope speaks for itself.