Author Archives: George Painton

Why landlords should sign up to the London Rental Standard

6995992417_9fa9e9cb12_mBoris Johnson launched the London Rental Standard this week, a voluntary accreditation scheme for letting agents and landlords. Those who comply with the scheme’s standards (outlined here) and take a one day course will receive their ‘Boris Badge’ of accreditation.

It is similar to existing schemes but the hope is that the weighty backing of the Mayor and greater publicity will make this the norm across the capital and a scheme which could ultimately be replicated across the country.

The London Rental Standard should improve the situation for landlords, tenants and agents alike. Healthy competition will be fuelled by an increasing awareness among tenants that there is a specific standard to which landlords can be held. The complaint that there should also be a tenant accreditation scheme, while an interesting idea in itself, is slightly beside the point when considering the benefits of the landlord and agent scheme. Good landlords have nothing to fear and bad landlords will be shown up and forced to make improvements. And there is a further point that well-intentioned landlords who happily sign up may well discover there are ways to improve their business. This can only  be a good thing.

It is also worth considering that if the scheme does ultimately improve standards, it should fend off much more onerous regulation, such as rent control and compulsory licensing.

Some critics have suggested that as a voluntary scheme that only reinforces good landlords, it will do little to help vulnerable tenants suffering at the hands of rogue landlords. This is not a legitimate criticism of the London Rental Standard, but of policies addressing rogue landlords in general. If the scheme gains enough momentum, lax landlords will have to improve. Out and out rogue landlords, who target vulnerable tenants with ‘beds in sheds’, are a different kettle of fish, requiring separate and more specific action.

The overall success of the scheme hinges on enough people signing up for it to become the norm among landlords and letting agents in London. Here are the official providers (you only need to choose one!):

If you are already a member of one of these accreditation schemes, you will not be automatically transferred to the London Rental Standard but it will be much easier for you to sign up. Simply speak to your provider!

“Boris Johnson chairing meeting” by Stephen Lock is licensed under CC

Private renting will help ease housing crisis – and help itself in the process

iStock_000006788420SmallAlthough opinions may differ over the precise nature of the UK’s housing crisis, it is clear that there is a significant problem of supply which private renting will have a major role in helping to solve. 18% of the population (around 10 million people) are housed by the private rented sector, double the proportion of 2000. Furthermore, a year ago the average age of a first time-buyer was 37 but here at Rentify we are noticing more and more renters of that age not just continuing to rent, but renting in shared dwellings and HMOs. It is therefore clear that there is now not just a huge squeeze on the home-buyers’ market, but on the rental market too.

The failure of successive governments to increase the UK’s housing stock is at the root of this. The positive to take, however, is that as it continues, demand for private rented accommodation will increase. This in turn will have a positive knock-on effect for landlords: as renting becomes the norm, people don’t just grow accustomed to it, but in many cases come to prefer it. The more housing that private landlords can provide to ease the crisis, the greater the cultural shift will be in favour of renting. This in turn means that landlords should be reaping the rewards long into the future.

It is clear that calls for excessive regulation such as rent controls should be ignored in the current climate. The government should be aware it desperately needs private renting to make up for the lack of housing. The RLA’s chairman Alan Ward has indeed made some interesting suggestions for how to ‘mobilise the small army’ of private landlords to help ease the crisis even further. There will need to be a balance between these individuals and institutional investment by private housing companies in private renting. And a good place to start would be with the wasted space and unused buildings in cities (even if you subscribe to the theory that there is a crisis of under-occupation rather than a housing shortage). The larger of these inner city projects should interest private companies, while the smaller could be developed by individuals (as long as planning rules are relaxed).

Renting in Rio or Letting in London?

3184875811_86796e87b9_mWith World Cup (and Olympic…a bit) fever building, the cost of renting in Brazil – and Rio especially – has sky-rocketed, even before either have started. Its status as a growing economy has also fuelled a 144% increase in rental costs over the past 5 years. Residents have sensibly taken to sub-letting to visitors just to cover their own rental costs. Even football star Ronaldinho, having been axed from the Brazil squad, is taking advantage of the situation by renting out his Rio home for over £9000 a night during the World Cup! This is an effect we are familiar with here in the UK after the London Olympics. So just how do the two compare now?

1.) Despite the increases, renting is still on average significantly cheaper in Rio than London, anywhere between 42% and 58% cheaper, according to various estimates.

2.) So, as a rough guide, the average rent in London is around £1,500 per month. In Rio it is about £730.

3.) Rental yields are, however, very similar. According to the Global Property Guide, average rental yields in Rio are 4.63%, compared to 4.80% in London (although yields are even lower in central London).

4.) The law is more favourable to tenants in Brazil. For example, it is common to agree that the tenant can leave the property before the end of a contracted term without penalty, provided they have lived there for more than a year (most tenancy agreements are for 30 months).

5.) So don’t all rush to invest in Brazilian property at once! If the financial and legal points weren’t off-putting enough, it seems as though crime is on the increase in the lead up to the World Cup. A big drive has significantly reduced the murder rate (down 37% since 2008), but street muggings are up 44% in the first quarter of this year and homicides are creeping up in the suburbs too…

“Rio de Janeiro” by Mike Vondran is licensed under CC

Rentify Survey: Are you certain that you are completing your self-assessment tax return correctly as a landlord?

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It’s good to see that the majority are certain that they are fully complying with tax regulation and have a good understanding of what they can and can’t claim as expenses. However, the percentage of those who are less than certain is significant, and perhaps larger than expected. Rentify urges all of those who have any doubts to seek expert advice from an accountant. You should also take a look at HMRC’s online tutorial for landlords.