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UNFURNISHED LETTINGS: WHAT FEATURES DO TENANTS PAY MORE RENT FOR?

The average age of a first-time buyer has risen to 32, and tenancies are lasting longer than ever. Not all national trends apply to lettings in Leeds, but this one absolutely does.

With renting no longer seen as a temporary measure, tenants are looking for a sense of permanence combined with more comfort. This means surrounding themselves with their own belongings in a well-presented and well-equipped home.

While most people want to live with their own furniture, the term ‘unfurnished’ doesn’t mean entirely bare. There are certain fittings that everybody expects, and others that some tenants will pay extra rent for. 

Longer lets at higher rents are every landlord’s dream, so this week’s blog is all about answering the following questions: 

  • What are the advantages of unfurnished lettings?
  • What makes the perfect unfurnished home?
  • Which kitchen appliances are essential, and which are optional?
  • Which bathroom fittings attract a higher rent?
  • Do energy-saving measures and luxury touches affect demand and income?

In short, all you need to know about what tenants pay more rent for so you can optimise the profitability and popularity of your buy-to-let.

THE BENEFITS OF UNFURNISHED LETTINGS

There are plenty of reasons why unfurnished homes are better for landlords and tenants alike. Take a look at our ten top benefits: which ones would make the biggest difference to you? 

  • Spare yourself the time and expense of buying, repairing or replacing items of furniture.
  • Use the savings to invest in upgrades to your property that improve its sale and rental value.
  • Forget the need to keep up with changing safety standards around fabrics and textiles.
  • Avoid trying to appeal to changing tastes and fashions.
  • Remove the hassle of storing any furniture your tenants don’t want.
  • Say goodbye to checking for broken crockery, missing cutlery or worn-out towels and bedding.
  • Make your tenants feel more at home surrounded by their own things.
  • Reduce tenancy changeovers and vacant days because moving home with furniture is expensive and time-consuming
  • Pay less for inventories and landlord contents insurance.
  • Find it easier to decorate, renovate and repair between tenancies.

A truly successful unfurnished letting is a home that tenants compete for and never want to leave. How do you do that? Keep on reading!

THE PERFECT BLANK CANVAS

To get the highest rent, think about creating a stylish, durable and neutral backdrop. One that’s ready to move into with minimal fuss and that works with anyone’s furniture and style.

  • Fresh paintwork – use a high-quality washable emulsion on your walls so your property stays smart without the need for complete redecoration.
  • Carpets or wood flooring? Hardwood engineered floors make a property look more expensive than carpet. They reflect the light, are easier to clean and are more durable. Oak is a safe, stylish and popular choice. Tenants are happy personalise a space.
  • Although they look better than bare bulbs, you don’t need to supply lampshades. But there should certainly be a working lightbulb in each fitting; preferably low-energy with a warm white light.
  • Remove the need for tenants to drill into your walls. Landlords are generally expected to provide window treatments because they are attached to a property and seen as essential. Timber blinds look great in most homes and are a complete style solution that helps empty rooms look more finished. If you’d rather avoid buying the treatments themselves, at least fit sturdy curtain poles (rather than cheap tracks that are susceptible to breakage).
  • Avoid creaky and wobbly handles. Make sure they’re securely fitted, working properly and look great on cupboards and doors. These are often opened on viewings and create an impression about the quality and feel of a home.

WHAT DO TENANTS WANT IN A KITCHEN?

Good quality kitchens and appliances can help you achieve a noticeable uplift in rental income. They last longer, are more efficient, cost less to run, require fewer repairs and attract discerning tenants, whether they’re Bake Off wannabes or not.

  • Install enough cupboards and shelves to comfortably store your tenant’s food, crockery and pans.
  • Fit high-quality work surfaces for preparing food. In larger spaces, a breakfast bar can add that sociable and sleek chef’s-kitchen quality.
  • Include a stainless steel or black fan oven, fast hob (gas, halogen or induction) and extractor hood.
  • Supply an efficient fridge/freezer and a washing machine with at least a 7kg load size.
  • For families and professional tenants, a dishwasher can be a real dealbreaker. A well-designed half size model is fine in homes with no more than two people, otherwise go full-size.
  • Lay durable and contemporary tiles, vinyl and linoleum that don’t swell like wood can. 

Don’t worry about small appliances like kettles, toasters, microwaves and coffee makers:  tenants don’t expect them.

BOOST YOUR BUY-TO-LET’S BATHROOM

Never underestimate the power of a magnificent morning routine! Give your tenants a great start to the day with our essential checklist to a blissful bathroom.

  • Choose high-quality taps for the bath and basin in a low-maintenance metal finish like chrome or brushed steel. 
  • Provide a decent-quality loo seat that’s fitted correctly – you’d be amazed how many tenants look for this from traumatic previous experiences!
  • Install a powerful, thermostatically controlled shower for an everyday reminder to your tenants of how happy they are to live at your buy-to-let.
  • Does your shower enclosure or bath have a screen? If not,  install a good quality rail as an inexpensive and thoughtful gesture. While tenants are happy to add their own sense of style with a shower curtain, the lack of a rail looks cheap.
  • As well as tiled floors and splashbacks, fully tiled walls look really smart and stay looking great. As a minimum, tile up to ceiling height around the shower or you’ll be forever dealing with peeling paint. Keep an eye on the grouting and sealant to keep it tidy and effective against water damage to the floor or ceiling below.
  • Fit a bathroom cabinet & mirror above the basin to keep everyday essentials like toothpaste, lotions, potions and creams out of sight, under control and free of dust. Go for the biggest size the space can take.
  • Ensure effective ventilation. Even in bathrooms with windows, an extractor fan ensures moisture doesn’t turn into condensation and mould. Check the decibel level: you’re looking for a subtle hum rather than a disturbing grind.
  • Include a caddy or shelf for shower  products. This looks so much better than piles of bottles on the floor or around the bath that are annoying and messy.

It’s all about having a sleek, showroom style that’s easy to maintain for an enjoyable experience every time.

 

ECO EXTRAS & LITTLE LUXURIES

Stand out from the competition with eco-solutions and touches of opulence at your buy-to-let. 

Energy-saving measures are a hot topic that’s here to stay, while extra comfort and convenience are the aspirational qualities that attract affluent tenants.

Try these examples for inspiration, then talk to us about the most appropriate options for your rental property.

  • Brushed steel or powder-coated metal power sockets and light switches
  • Wired-in multi-room audio speakers
  • Smart thermostats and designer heated towel rails
  • Mood lighting under kitchen wall units and behind bathroom mirrors
  • Water-saving flow restrictors on taps, shower and loo
  • Solar-powered outdoor lighting to the garden or balcony
  • Integrated slide-out bin in the kitchen with compartments to separate recycling and rubbish.

What’s your next step?

Do you want to turn your buy-to-let into a market-leading rental home? We love showing landlords in Leeds how to increase their income and improve their business.

Call us on 0113 460 2416 or email us at info@silverspringlettings.co.uk for a chat about the local rental market and how we can help you grow.

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COST OF LIVING CRISIS: WHAT CAN LANDLORDS DO?

We’ve all seen the headlines: inflation at its highest point in almost 30 years; interest rates are rising, and the energy cap is about to lift. Everyone’s on tenterhooks to see what it will mean for their bank balance, and of course, landlords and tenants are going to be affected.

Nobody quite knows how things will turn out, but the forecasts are stark. It’s estimated that 7 million people will fall into financial difficulty after the energy cap lifts on April 1st, rising to 14 million with a further expected price rise in October, just in time for winter.

So, what can landlords do to get ahead of the problem? The short answer is “act now”. The longer answer is “actually quite a lot”.

To get you started, this week’s blog is chock-a-block with practical tips on how you can work together with your tenant on making things easier for them while still protecting your income, investment and costs.

Remember that you’re always welcome to get in touch about life as a landlord. Call us on 0113 460 2416 or email us at info@silverspringlettings.co.uk – we’re here to help.

START WITH A HEART-TO-HEART

Checking in with your tenants to find out where they’re at will prevent an uncomfortable silence from brewing. You can solve a lot with a friendly chat, and you could nip a problem in the bud before it ever escalates.

Aim for an easy and open conversation; a good-natured fact-finding exercise to see where things stand. Don’t assume your tenants have thought of everything around reducing their energy costs – you may be able to help.

  • Are they worried about their personal situation?
  • Do they have an idea of what their energy bill is likely to be?
  • Is there a better energy deal out there for them?
  • Are there any opportunities for them to manage their bills?

The key is to listen with an understanding ear. When your tenants feel free to be completely upfront, you can work together on the best way forward for both of you.

MAKE YOUR BUY-TO-LET CHEAPER TO RUN

Having explored how your tenants can reduce their energy consumption and costs, now is a sensible time to review the energy efficiency of your buy-to-let. 

As well as softening the impact of rising utility bills, energy improvements can increase the value of your investment, future-proof its place in the market and give you a head start on any further energy-saving legislation.

Even the tiniest draught can cause a noticeable drop in temperature and comfort. Windows, doors, letterboxes, keyholes and chimneys are all potential gateways for heat loss, yet plugging draughts is one of the most cost-effective measures you can take with instant benefits and minimal disruption.

The same is true of flow restrictors on taps and showerheads, and fixing or replacing leaky fittings. The less hot water they use, the lower the energy bill.

Are any older appliances due for renewal soon? Replacements are tax-deductible, and A+ rated models are highly energy-efficient, particularly from brands like Bosch, Neff and AEG. 

Finally, never underestimate the power of a well-placed note for creating new habits. Friendly reminders on the washing machine, dishwasher and heaters with eco-friendly tips will ensure your tenants get the maximum financial benefit.

CAN YOU BE FLEXIBLE OR PIVOT?

The race for space to get a garden or an extra room to work from home saw many tenants stretch their budgets during the pandemic, but some may need to review their choice as they look to reduce their outgoings.

If it’s clear your tenant will run into financial difficulty, there’s little point in forcing them to stay and waiting for arrears to build. Demand for rental property is still extremely high, so you could strike a deal with your tenant to keep the place tidy for viewings in exchange for leaving early once you find a replacement.

This could be an opportunity to have more income-earning tenants who split the bills. For instance, couples or sharers for a two-bedroom apartment rather than a single person using one of the bedrooms as a workspace.

Stay open-minded – the most important thing is that your property is rented to people who 

pay the rent and take care of your investment.

THINK ABOUT RENT STABILITY

If the tenancy at your buy-to-let is either approaching or past the end of its initial fixed-term, you could be wondering whether to keep things as they are, announce a rent increase, or end the tenancy.

According to the research team at Hamptons, record-breaking rental growth in 2021 saw the average UK household spend 42% of its net income on rent (rising to 54% in London) – the highest ratio since Hamptons began keeping records in 2010.

Most tenants won’t have budgeted for a surge in food and energy prices, and the rising cost of living is expected to translate into slower rental growth in 2022 as disposable income dwindles. Zoopla forecasts an average rise of 4.5%, compared to last year’s 7.5%.

Landlords value stability, and although annual rent reviews are par for the course, we’re in very unpredictable times. If you’ve got a fantastic tenant who’s punctual with payments, takes care of your property and wants to stay, would it be wise to keep them on at the same rent?

You wouldn’t be alone in that choice: the buy-to-let consultancy GetGround surveyed hundreds of UK landlords and found that 69% wanted to help their tenants through the cost-of-living crisis, including temporary rent freezes.

Before you make any decisions, talk to your letting about the current rental value of your property, then factor in the upfront costs of finding a new tenant, the possibility of vacant days between tenancies, and what you feel in your heart and your head. Then you can decide what makes the most sense for you.

PROTECT YOUR INCOME & INVESTMENT

Even if everything’s running smoothly with your buy-to-let, the cost-of-living crisis could bring unwelcome news. For example:

  • energy prices rise again
  • inflation keeps going up
  • mortgage interest rates increase further
  • the rent stops being paid
  • you incur legal costs to gain possession

If you have a buy-to-let mortgage, a quick look at your existing deal compared to current offers will tell if you can make a saving. Even with a fixed rate that’s still got a few months to go, you could lock in a new deal to start when the old one ends.

Taking steps to protect your income and investment is particularly wise right now. Although we aren’t experiencing problems with the homes we manage, we’re keeping an ear to the ground, and arrears are on the rise.

A recent article in the Telegraph states: “Between October and December 2021, the average time between a landlord repossession claim and an eviction was 68 weeks”. That’s a long time to be without rent.

As a safeguard, you could take out insurance to guarantee your income if your tenant stops paying. A legal protection policy will also cover you in a worst-case scenario of needing the courts and solicitors to gain possession of your property.

Given the forecast for the difficult road ahead, paying a small percentage of your rent for complete peace of mind might feel like an attractive option. Feel free to get in touch to see how our landlord clients are protecting themselves and what could be the best option for you.

What’s your next step?

Being positive and proactive through all that’s going on will help you stay ahead of potential problems, enhance your rental properties and maintain their profitability. That’s always our approach, and why our landlords are so happy!

Would you like the same care and commitment? If you’re a landlord in Leeds, give us a call on 0113 460 2416 or send us a message to info@silverspringlettings.co.uk – we’d love to show you how we can make a difference to your buy-to-let business today.

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LETTING AGENT DIARY: BEHIND THE SCENES OF A TYPICAL WORKING WEEK

To describe this job in a single phrase, it would have to be ‘never a dull moment’. Aside from opening the office, making a coffee and checking new messages, no two days are ever the same. 

Meeting new people and being out in the neighbourhood are two of our favourite things, but the icing on the cake is handing over the keys on moving day. It’s such a moment of joy for everyone – the landlord, the tenants, us – as a whole new chapter begins.

The lettings world moves much faster than sales, but agents have far more paperwork and responsibility. With no solicitors checking contracts, it’s down to us to get everything right, and all while keeping up the pace.

There’s a lot more happening than showing people around beautiful homes, so join us for a glimpse behind the scenes to see how it all comes together.

VALUATIONS & NEW LISTINGS

A big part of our week is meeting new landlords. Seeing new properties is one of the job’s best qualities, and getting them ready for the market is even more exciting.

Lettings used to be a complete free-for-all with multiple agencies instructed on every home, but more and more landlords want to work with a single agent they can trust. We need to fill them with confidence to win the business!

Taking along examples of other homes we’ve let and manage nearby shows landlords that we get results and that our advice makes sense, so a lot of time goes into preparing for every appointment. 

While we’re on a valuation, we always look for ways to improve a property to achieve the highest rent and the best tenants. We’ve built up a fantastic list of local contractors over the years, and it’s really rewarding to see our recommendations come to life while managing the projects.

Once we’ve got a landlord’s go-ahead and the keys, speed is of the essence. We don’t wait until the photos and description are uploaded to the portals; we get straight on to our list of potential tenants to start booking in viewings. 

It’s all about minimising void periods and keeping our clients’ income flowing.

ENQUIRIES, VIEWINGS & OFFERS

There are numerous new enquiries every day, either by phone or email, but not every viewing request is a good fit. Before we take anyone to see a property, we make some basic checks with every potential tenant to avoid booking wasted appointments. These include:

  • ensuring the property matches what they’re looking for
  • confirming their timescale around a moving date
  • clarifying their budget
  • checking their employment status
  • asking how long they’re looking to stay somewhere 

There can be a lot of coordination in getting everyone who intends to live at a property to come on the viewing. The lettings business is very fast-paced, and if someone is missing from the first appointment, their housemates may not get the chance of a second look.

Offers are always good news, but before recommending them to a landlord, it’s good practice to double-check the facts to ensure the tenants are suitable. That means getting all the details confirmed in writing by email, so nothing gets forgotten or assumed.

TREMENDOUS TEAMWORK

Although we all have our individual roles, everything anyone does affects the whole team, so constant communication is crucial. 

As well as updating each other immediately on all the new listings and offers agreed, we get together at least once a week to discuss all the goings-on:

  • feedback from viewings to keep landlords informed
  • upcoming moving-in days
  • notices given by tenants or served by landlords
  • potential and actual disputes
  • maintenance issues and recommended works or improvements
  • changes in legislation and latest lettings news

Together with everyone working here, our landlords are also part of the team. We’re all working towards the same goal, and keeping in touch with them every week ensures they feel connected and valued.

We always aim to get in a drink at the end of the week to celebrate the wins!

PAPERWORK PERFECTION

There’s a lot of paperwork involved in lettings, and there’s no room for error: it’s absolutely vital to make time in our week to keep up with the latest news and changes in the law.

Most tenancies end amicably, but plenty of landlords come unstuck through an understandable lack of knowledge around the ever-changing legislation.

Each tenancy needs to start on a solid footing, so every application goes through the following process:

  • detailed application forms
  • employment and landlord references
  • credit status check
  • proof of identity
  • signed tenancy agreement
  • payment of first month’s rent 
  • completed standing order mandate
  • comprehensive inventory signed by the tenants
  • security deposit paid, registered and protected

Any amendments during a tenancy also need to be handled correctly. From a change of tenants in a shared house to formal renewals and serving notices, everything needs to happen in the correct order, with accurate wording and at the right time.

INSPECTIONS, MAINTENANCE & EMERGENCIES

As well as viewings and valuations, our diary has a lot more going on. Every rental property needs looking after because they only ever get older, which means regular check-ups, conscientious management and a hint of diplomacy.

Interim inspections

Visiting a property every six months during a tenancy helps us spot and rectify any potential problems early on. It’s also an opportunity to catch up with the tenants, ask how they’re enjoying their home and see if they’re planning to stay or move out. This helps us to schedule any future works and keep the property in mind in case a potential new tenant gets in touch.

Maintenance

As well as general upkeep and repairs, we need to keep an eye on legal compliance (400 pieces of legislation and counting!) In particular, valid certificates for gas safety, electrical installations and energy performance are essential to ensure every property complies with the law, so these all go in the calendar in good time for their renewal.

Emergencies

Fortunately, emergencies are few and far between when properties are managed correctly. But whenever the unexpected does happen – rarely at a convenient moment! – it can be an extremely fine line between a genuine emergency and an urgent repair. We need to balance that with keeping tenants assured that we’re on the case, and landlords confident that we’re managing their investment correctly. Not always easy!

Would you like to meet?

Now you know all about us, we’d love to know more about you. It’s always a highlight to meet new landlords and help them get their buy-to-lets working harder and smarter: after all, that’s the whole idea!

If you own a rental property in Leeds and you’d like to know if it could perform any better, why not get in touch? Call us on 0113 460 2416 or email us at info@silverspringlettings.co.uk for some friendly and expert advice that could seriously improve the value and yield of your investment.

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RENTABILITY REVIEW: DOES YOUR BUY-TO-LET TICK THE RIGHT BOXES FOR THE RIGHT TENANTS?

There’s a book by Simon Sinek called Find Your Why, and it’s all about identifying your reason for having a business: why do you do what you do?

The same question can be applied to your rental property: why would a tenant choose your buy-to-let instead of another one? Why would they pay you more rent? And why would they stay beyond their initial contract?

Asking yourself these questions helps you appreciate everything that’s already great about your rental property, and to seek out areas for improvement. It’s an integral part of owning a successful buy-to-let, both when it’s empty and while it’s occupied.

It’s also why we carry out interim inspections – not just to identify repairs, but also to ensure our landlords’ lettings portfolios keep up with the local market and ahead of government legislation.

So let’s look at how you can review the rentability of your own buy-to-lets to keep them performing at their peak and pulling in the crowds.

IS YOUR TARGET MARKET CLEAR?

Every business has an ideal customer, but the most successful ones are those that correctly identify their perfect client and make a real connection. If you think of any brands you have an affinity for – perhaps Apple for technology; Tesco for groceries; John Lewis for home furnishings – there’s almost certainly something very specific that draws you to them.

The lettings market is no different, and is made up of several target audiences:

  • Singles
  • Couples
  • Sharers
  • Families
  • Professionals
  • Students
  • Corporates

If you look at your buy-to-let, is it obvious who you’re looking to attract, and are you in step with the neighbourhood? Schools get better or worse; transport connections develop; shops and businesses evolve with changing demographics.

Take a moment to review the local market: does your student-let have a more profitable future with professional sharers, or could your family rental make a perfect HMO?

Unsure how to fine tune your buy-to-let for its most suitable  audience? Drop us a line at info@silverspringlettings.co.uk for some useful tips – we’re here to help you get it right.

IS ANYTHING LOOKING TIRED?

When you think about checking into a hotel room, do you want to be reminded of the previous guests? They’re literally the last people you want to think about when you jump in the shower, and it’s exactly the same for tenants.

Empty rooms show up every flaw, but not everything that looks dishevelled needs replacing. In fact, there are plenty of superficial jobs that require minimal expense but make an enormous difference to the overall impression.

Among the many removable signs of wear and tear from previous tenancies are:

  • painting out scuffs on walls and woodwork (including the front door)
  • dissolving limescale on taps, showers and wastes
  • removing mould on grout and sealant
  • steam-cleaning carpets 
  • washing curtains and re-aligning blinds
  • fixing wobbly handles and hooks
  • weeding gardens and jet-washing balconies and pathways

Wondering if you’ve missed anything? Get in touch for a chat about

DOES EVERYTHING IMPORTANT WORK?

Your tenant’s first few hours and days in your buy-to-let form the foundations of your relationship. Little niggles make big impressions, and moving into a property with a fiddly door lock or heating that doesn’t work is simply not a good way to start things off.

Ultimately, anything that’s broken will need fixing at some point. Nothing improves or repairs itself, so delaying is simply holding off the inevitable while risking a showdown. 

Use the following checklist to give your buy-to-let an eagle-eyed audit. Once you’re done, you can be absolutely certain that everything works as well as you think it does.

  • Boiler or hot water tank
  • Washing machine
  • Dishwasher
  • Fridge/freezer
  • Oven, hob & extractor
  • Doorbell or entryphone
  • Locks & keys
  • Electrical sockets
  • Light switches
  • Radiators and heaters
  • Shower and taps
  • Gutters, downpipes & drains

Knowing that everything works means you won’t be wondering when the phone will ring after your tenants check in. 

IS IT TIME FOR UPGRADES?

The lettings market has become far more sophisticated in recent years and renting a home is now a long-term lifestyle choice for many people. There was a time when tenants demanded far less than buyers, but we’ve seen that change a lot.

The good news is that people are willing to pay higher rents for better homes, so treat every departure of a tenant as an opportunity to make an upgrade, even if it’s a tiny one.

  • The cheapest appliances are often hopelessly unreliable and equally unpopular among our contractors. You’ll thank yourself in the long run by choosing respected mid-range brands like Neff, AEG, Bosch and Siemens: they’re a hit on viewings and they’ll give you and your tenants years of service.
  • We still occasionally encounter mixer taps with leaky shower hoses, unpredictable water pressure and fluctuating temperatures. These should be consigned to the past and replaced with a modern, thermostatically controlled shower fitting.
  • Rising fuel bills are a massive conversation right now, and tenants are scrutinising running costs like never before. Look for gaps in your buy-to-let’s energy-efficiency, then plug them.
  • Replace any unsalvageable carpets or peeling laminates with engineered wood floors.

If you’re uncertain whether your buy-to-let is falling behind the times, let us guide you

IS YOUR MARKETING MAGIC?

Once your buy-to-let is looking all ship-shape and pristine, it’s a shame if all that hard work goes to waste with poor-quality promotion.

When choosing a letting agent, run a spot check on how they work. To ensure you get the best result, it’s essential for the marketing of your property to include: 

  • up to date photos that reflect what tenants will see today, rather than ones your letting agent took a few years ago when you first met;
  • multiple images that show off the best angles of the rooms and highlight close-up details and features;
  • an enthusiastic and evocative description that sells the finer points of your property along with the highpoints of the neighbourhood to attract your target audience;
  • inclusion on a major property portal to ensure you capture a wide range of potential tenants;
  • an active social media presence where the agent shows a knowledge of using the platform to promote their listings;
  • a pricing strategy that’s designed to get you the best possible rent without losing enquiries through overvaluing or guesswork.

What’s next for you?

Conducting a regular review of your buy-to-let for its presentation and place in the market will keep your investment looking great and in high demand among your ideal tenants.

Keeping our landlords’ rental homes current and competitive is our top priority, and we’d love to show you how we can do the same for you. Give us a call on 0113 460 2416 or drop us a message at info@silverspringlettings.co.uk for a friendly chat

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LEVELLING UP LETTINGS: SHOULD YOU SELL OR UPGRADE YOUR BUY-TO-LET PORTFOLIO?

 

What a time to be a landlord! No sooner are we past the phasing out of mortgage interest relief than the Government announces new areas of expense.

 

The Levelling Up white paper released on February 4th aims to make the Private Rental Sector in England and Wales more eco-friendly. It’s all part of a drive to reduce carbon emissions as part of the UK’s target to be net-zero by 2050.

 

While everybody agrees that energy-efficient homes are a good thing, the white paper has left landlords in Leeds and around the country with more questions than answers. 

 

  • How much will it cost to upgrade your buy-to-let?

 

  • Will you get that money back through higher rent?

 

  • Is funding going to be available?

 

  • Are you better off selling up and buying a more energy-efficient property?

 

  • Should you stop being a landlord altogether? 

 

There’s plenty to unpack in there, and our blog this week does just that, so you can make a plan that’s best for you.

 

 

EVALUATE YOUR EPC

Every rental property needs to have a valid EPC (Energy Performance Certificate). 

Here’s a quick refresher of EPC facts:

 

  • EPCs are valid for 10 years

 

  • Since 2018, all rented properties must have a minimum EPC rating of E

 

  • From 2025 the minimum EPC rating requirement raises to C

 

  • The current penalty for not having a valid EPC is £5,000

 

  • From 2025, the penalty rises to £30,000

 

Before you make any decisions about selling or upgrading your buy-to-let, check your EPC for its current rating and expiry date. If the rating is already C or higher, you can relax.

 

If the EPC rating is D or E, there’s work to be done, and a good place to start is by looking at the suggestions on your certificate for improving your buy-to-let’s energy performance.

 

HOW MUCH WILL IT COST TO LEVEL UP YOUR BUY-TO-LET?

If your buy-to-let already has an EPC rating of D, the work required to reach C might be less than you think. A few relatively simple upgrades could tip you into the higher rating without major disruption or expense.

However, let’s look at how the numbers might work for a typical rental home.

 

The Government recommends a fabric-first approach, which means insulation to roofs, walls and floors. The Impact Assessment estimates the average cost of reaching an EPC rating of C to be around £4,700. 

 

According to the Homelet Rental Index, the average monthly rent in the UK for a new tenancy is £1,064.

 

If we spread the estimated cost of improvements over the 34 months between now and the end of 2024, the monthly cost comes to £138, about 13% of the rental income.

 

For existing tenancies where the deadline could be another three years away, that monthly cost reduces to £67, or roughly 6.3% of the rental income.

 

Yes, we’re talking averages, but given that it’s good practice to keep 10% of the monthly rent aside for maintenance and repairs, those figures really aren’t so tragic.

 

COMPARE THE COST OF LEVELLING UP VS SELLING

The big question on the lips of every landlord is whether to:

  • keep and upgrade an existing buy-to-let;

 

  • sell it and reinvest in a more energy-efficient property

 

  • walk away from lettings altogether.

 

Some of the answers will come from the physical age of a rental property, and whether it’s owned by an individual or through a limited company.

 

If you’re a landlord with a well-insulated and modern buy-to-let, the likelihood of major works is probably quite small. But if you own a less energy-efficient older property, you might be tempted to sell up.

 

So let’s look at three factors that may affect your decision:

 

  1. Energy prices are a real hot potato right now, not least among homebuyers. Although there are no regulations around the EPC ratings of owner-occupied properties, the market for inefficient homes will be affected. This could mean less interest from buyers, or lower prices to cover the cost of upgrades.

 

  1. Selling investment property attracts Capital Gains Tax (for individuals) or Corporation Tax (for limited companies). You’ll also need to add in legal fees and estate agents commission.

 

  1. As well as regular Stamp Duty, buying investment property attracts a minimum of an additional 3% in the form of the Second Homes Supplement.

 

If you own multiple buy-to-lets through a limited company, you might choose to sell one of them to fund the renovation of others. Any profits kept in the company will escape corporation tax, and you can claim back the cost of any improvements as a legitimate business expense.

 

For individuals, it’s a different story. All your profits will be taxed, regardless of whether you intend to reinvest in another property. So it may turn out that keeping and upgrading your buy-to-let is the more profitable option.

 

WILL THERE BE GOVERNMENT FUNDING?

Within the Government’s white paper, the phrase “where practical, cost-effective and affordable” appears. Exactly what that final caveat means we don’t yet know, but it suggests that some rental homes may be given a bit of leeway.

However, the official line right now is that most of the costs are expected to be borne by landlords, and the Government is citing improved property values as one of the benefits.

 

Whether landlords will have to foot the entire bill on every buy-to-let remains to be seen, and plenty of lobbying lies ahead to push the Government into backing its commitment with some kind of funding. Perhaps the 2024 General Election will provide the impetus for landlord-friendly manifesto pledges.

 

So, if your buy-to-let is performing well, it may be worth sitting tight for now. Grants may become available, and the current pressures on energy prices may relax to make them less of a talking point for buyers and tenants.

 

PHASE YOUR LEVELLING UP IMPROVEMENTS

If you decide that upgrading your existing buy-to-let is the best option, having a planned programme of works will make the cost of improvements more manageable.

By getting ahead of the deadline and setting aside some of the rental income each month, you can avoid the following hiccups and hassles: 

 

  • the financial impact of paying for everything at the same time

 

  • a last-minute crunch of landlords trying to beat the deadline at the end of 2024

 

  • potential increases in labour costs when demand reaches such a peak

 

  • the stress of trying to find available contractors at a time when so many other landlords are looking

 

  • having a property standing empty because it doesn’t meet the new legislation

 

Minor works can be done while your tenants are present or out at work. For major projects like replacing windows or insulating walls and floors, you could time them around your tenant’s holidays to minimise disruption.

 

What’s next for you?

Do you have more clarity over the best course of action for you? If you’ve still got some questions, give us a call on 0113 460 2416 or drop us a line at info@silverspringlettings.co.uk 

 

To ensure our landlord clients meet the deadline, we’ll be managing energy improvements to their buy-to-lets with our trusted and expert local contractors. So let’s get talking, and perhaps we can do the same for you. 

 

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RENTAL ARITHMETIC: SHOULD YOU BE A PRIVATE LANDLORD OR A LIMITED COMPANY?

Landlords in Leeds are an essential part of the local rental market – there simply aren’t enough new homes being built and demand from tenants is stronger than ever.

 

Ever since the Chancellor began phasing out mortgage interest relief in 2017, landlords have been wondering whether it’s still possible to have a profitable buy-to-let business.

 

It’s a concern for landlords in Leeds as much as anywhere else. Some have chosen to exit the buy-to-let market altogether, while others have decided against expanding their portfolio.

 

We’d like to reverse that trend by talking about one of the biggest shifts in the property market: landlords switching from owning their buy-to-lets privately to buying them through a limited company.

 

It isn’t an option that’s right for everyone, and if you only ever intend to own one or two rental homes, you’re probably better off staying as a private landlord. But if you’re a higher-rate taxpayer and you’d like to build a sizeable portfolio, there can be significant advantages to owning your rental homes through a limited company.

 

So this week’s blog is all about cutting through the noise to see if being a private landlord or owning your buy-to-lets through a limited company is right for you.

 

 

BUY-TO-LET MORTGAGES FOR INDIVIDUALS AND LIMITED COMPANIES

The market for buy-to-let mortgages for private landlords is packed with multiple products from almost every high street lender, and some have interest rates that are almost on a par with standard residential mortgages.

By comparison, buy-to-let mortgages for limited companies are less common. The market is growing as lenders play catch up with landlords setting up limited companies, but rates and fees are still higher.

 

For example, at the time of writing, fixed-rate buy-to-let mortgages for companies start at around 3% APR, while private landlords can find deals for less than half of that, as low as 1.31% APR.

 

Buy-to-let mortgages for companies and individuals share the same 75% loan-to-value cap, and variable rates are about the same.

 

Money.co.uk is an excellent source of information on the latest and best buy-to-let deals for private landlords and limited companies.

 

 

ADMINISTRATION & ALLOWANCES

There are differences in the amount of paperwork and tax allowances between owning a buy-to-let as a private landlord and as a limited company. Here’s our roundup of the main distinctions.

Private landlords

As a private landlord, the level of administration is very low. You simply include the profit from your rental income with your tax return.

 

However, you are taxed on 100% of your profits each year, regardless of how you intend to use them. The basic rate income tax for 2022/2023 is 20% after the first £12,573 and up to £50,270, but any income above that is taxed at 40%.

 

Mortgage interest relief for private landlords has now been phased out and replaced by a tax credit. Fixed at the basic income tax rate of 20% of the mortgage interest repayments, the new rules effectively exclude higher rate taxpayers from claiming the credit.

 

When it comes to carrying out works to their buy-to-lets, private landlords are also limited to claiming back the costs of repairs. Property improvements are not an allowable expense for income tax.

 

 

Limited companies

Setting up a company is a very simple procedure. Just log on to the Companies House website, then start the process. It takes less than 15 minutes.

 

Owning a company does come with extra administration and you’ll need to pay corporation tax on your profits and file annual accounts that are separate from your regular tax return. Of course, you can outsource that work to an accountant.

 

The real benefits come from allowable expenses, which include mortgage interest relief and making improvements to your property.

 

Mortgage interest is considered an allowable business expense, which means you can claim for your entire monthly mortgage payment on an interest-only loan.

 

For profits left rolling up in the company, you’ll only pay corporation tax at 19%. This makes carrying out improvements extremely tax-efficient as well as increasing the value of your portfolio.

 

You’ll pay personal income tax on any dividends you take, but you can time your payouts to make them more tax-efficient, including spreading them over more than one tax year.

 

 

INCOME OR INVESTMENT

There’s no doubt that the buy-to-let market is moving further and further away from short-term yield, and more towards long-term capital growth.

The days of immediate high yields of 10% and more are mostly behind us, particularly with recent tax changes. But rental property is still a sound long-term investment that produces far greater yields than savings accounts. Coupled with capital growth and the security of bricks and mortar, buying to let can be an effective route to a financially-free future.

 

One obstacle to expanding your portfolio can be the need to find a 25% deposit for each purchase. And paying income tax on 100% of your profits against a background of reduced allowances can leave dwindling returns.

 

But a limited company can be extremely tax-efficient if you intend to use the profits from your buy-to-lets to expand your portfolio. That corporation tax rate of 19% leaves far more to play with than the higher-rate income tax of 40%.

 

When you add up the savings on mortgage interest relief, income tax and increased allowances for improvements, it’s not hard to see how much faster your pot for expansion can build, and with less and less needed from your savings.

 

And as any mortgages are paid off, you’ll have plenty of options to explore with your tax adviser over how to make the most of your portfolio’s income in your retirement, either through share dividends or selling all or part of the company.

 

 

PROPERTY SALE & TRANSFER

At first glance, it’s not entirely obvious whether you’re better off as an individual or limited company when selling your buy-to-lets. But as you’ll see, there is one bargaining chip that only companies have.

Selling a privately owned buy-to-let immediately attracts Capital Gains Tax (CGT) which is currently 28% for higher-rate taxpayers and 18% for basic rate taxpayers.

 

Everyone has a tax-free Capital Gains Tax allowance of £12,300, so you only pay CGT on profits above that. But with the gain added to your income for the year, it could push you into a high-rate band for income tax.

 

Limited companies don’t pay Capital Gains Tax. All their profits, regardless of whether they come from rental income or selling a property, attract corporation tax which is currently 19%.

 

You can also claim back purchase costs like stamp duty and legal fees along with any capital improvements you’ve made to the property (although a limited company would probably have already claimed against those improvements as they were made).

 

So far, so unclear.

 

However, and as made famous fairly recently with Tony & Cherie Blair, purchasing the shares of a company with assets including property attracts Stamp Duty of just 0.5%.

 

On a sizeable portfolio that could be quite a saving for the buyer, and may give you valuable bargaining power to sell your company and portfolio for a higher price than you might have achieved by selling each property individually.

 

 

INHERITANCE PLANNING

An aspect of buy-to-let that rarely gets any attention is inheritance tax.

The way you own your investment properties can have profound effects on the amount of tax paid by your beneficiaries. If you intend to keep your buy-to-lets as a business to pass on to your children or anyone who isn’t your husband, wife or civil partner, owning them as a limited company can have a real advantage.

 

Inheritance tax is currently 40% and is payable on anything over the tax-free threshold of £325,000 (this rises to £500,000 for passing into your children or grandchildren, and for estates worth over £2,000,000.

 

But with a limited company, you could choose to make it a real family enterprise by making your beneficiaries shareholders whose controlling interest grows over time. And if more than 50% of your business includes buying land to build rental homes on (the build-to-rent sector is most definitely worth exploring), the company may also be eligible for Business Property Relief. This can reduce Inheritance Tax on qualifying assets by 50%.

 

Tax is a supremely complicated area and what’s right for one person or company isn’t necessarily right for another, so we recommend speaking to a tax adviser about your own situation.

 

 

Final words

For portfolios larger than two properties, owning them as a limited company can be an excellent long-term holding solution. With significant tax advantages during your ownership and for inheritance planning, there’s plenty to consider if you’d written off buy-to-let as no longer worth it.

 

We’d love to help you start, grow and manage a successful buy-to-let business. So if you’re a landlord and you’re looking to begin or expand your lettings portfolio in Leeds, call us on 0113 460 2416 or send us a message at info@silverspringlettings.co.uk to talk about your ideas, plans and the future.

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PREMIUM LETTINGS: HOW TO ATTRACT HIGH-EARNING PROFESSIONAL TENANTS

Landlords are always asking us how they can make their property more attractive to professional tenants, and no wonder. It’s a lucrative market of high-earning people who’ll pay a premium rent for the right home. But what exactly do they want?

 

Professional tenants often work extra-long hours, so their free time is particularly precious: whether they’re staying home alone or entertaining friends, they want to truly savour where they live.

 

They also expect a professionally managed home where they can be sure of being well looked after, with a 24-hour number to call in case of emergencies. And with time a precious commodity, finding a home fast is also a priority, which means your buy-to-let should be listed on a major property portal and not buried in classified ads.

 

If you already own a buy-to-let, our blog this week will help you identify improvements you can make to reach a new audience. And if you’re starting or expanding a lettings portfolio, you’ll find tips on what professional tenants look for in potential homes and locations to pay a premium rent.

 

 

LOCATION

Either side of a long and busy day, professional tenants want an easy commute and an enjoyable lifestyle that’s close to home. In short, the perfect work-life balance.

Singles, couples and sharers have entirely different wish lists than families when choosing a location. Instead of Ofsted ratings for the best schools, they’ll be looking up places to meet up with friends.

 

So when you’re considering whether to add a home to your lettings portfolio, use the following checklist to see how the lifestyle matches up:

 

  • easy (10-15 mins max) walking distance to transport
  • grabbing a coffee
  • somewhere for brunch
  • a great local pub with food
  • seeing a film
  • going shopping
  • heading to the gym
  • staying in with a takeaway
  • a decent dry cleaner
  • buying groceries
  • open green space

 

Having a fulfilling lifestyle doesn’t require living in the most expensive streets. Professional tenants don’t prioritise family-friendly avenues or the most exclusive position; they’re looking for convenience and connectivity to enjoy the best of the neighbourhood.

 

 

ACCOMMODATION

Successful people want a home that reflects and rewards the effort they put into their working day.

By offering accommodation that’s comfortable for everyone to live in, you’ll attract professional tenants who’ll pay a premium rent.

 

  • Whether the living room and kitchen are separate or a single open-plan space, there should be plenty of room for a dining table and sofa(s) that comfortably seat at least the number of tenants.

 

  • Each tenant or couple will expect a bedroom that’s big enough for a full-size double bed, nightstands and wardrobe without it feeling like a squeeze. Single bedrooms get a lot of tenant turnover, which is unsettling for a household and requires time to find a new housemate – time that professional tenants either don’t have or would rather spend on something more fun.

 

  • You can add value, space and convenience to a small bathroom by replacing a tiny tub with a large shower. And if you have more than three sharers, an extra shower room will relieve many-a morning rush and the accompanying frustrations.

 

 

SPECIFICATION

Professional tenants are happy to rent either newly-built or traditional homes, but they care about living in a style-conscious and modern environment. A place where everything works, and that makes them feel good.

Decoration

Make sure the paintwork is clean and bright. Many marks and scuffs will wash off, and for those that won’t, treat them to a fresh coat of warm white.

 

Windows

Bare windows are a no-no, even in unfurnished lettings. Choose Venetian timber blinds in birch or oak to go with any style of property and furniture.

 

Bathrooms

A good shower is absolutely essential, along with an extractor fan that works properly. Replace a regular radiator with a heated chrome towel rail for a market-seducing and cost-effective upgrade.

 

Kitchens

With so much of modern life revolving around the kitchen, the way it looks and functions is a major deciding factor in choosing a home to rent.

 

It’s a myth that professional tenants never cook. They want a good-looking kitchen with:

 

  • fan oven (consider one with a microwave function)
  • fast hob
  • washing machine with 7kg+ load capacity and 1000+ spin speed
  • tall fridge/freezer
  • dishwasher (for 1-2 people, you can get away with a well-designed half-size model from the likes of Neff, Bosch & Siemens; 3 or more sharers will expect a full-size machine)

 

Choose stainless steel for exposed appliances wherever you can. If the kitchen is open to the living space, create a cleaner look by installing integrated models with facias to match the units.

 

Floors

Engineered or solid wood floors are the finish of choice for professional tenants because they’re easy to maintain and look brilliant in hallways, living rooms and bedrooms. Carpets are more prone to stains and can show their age quickly through dust lines behind doors and imprints from furniture.

 

In wet areas like kitchens and bathrooms, go for tiles: a smart grey or limestone finish goes with almost anything, but contemporary takes on Moorish, Roman and Art Deco designs are also a popular look.

 

 

STORAGE

It’s remarkable how little storage space we find in some buy-to-lets when it’s a huge priority for professional tenants. We all have belongings we need to store, and when there’s nowhere for them to go, they end up in piles and make rooms feel cheap, messy and uninviting.

Use our tips to offer a home that stays effortlessly tidy.

 

Household items

It’s essential to have somewhere to store the vacuum cleaner, ironing board, broom, mop, towels and household cleaning products. Common areas like hallways, landings and kitchens are the perfect spots – try to keep them out of living rooms and bedrooms.

 

Kitchens

There should be sufficient space to store enough food for the likely number of tenants, plus room for cutlery, crockery, pans and containers. If you can’t fit more units in, increase their current storage efficiency. Most cupboards will take an extra level, whether an additional solid shelf or a freestanding organiser that stands inside.

 

Bathrooms

Everyone has products that need to go somewhere. A metal shelf or caddy in the shower will hold gels and shampoos; a mirrored medicine cabinet over the washbasin hides everyday products, and a tall, slender cupboard will swallow loo rolls, hairdryers, beard trimmers and everything else.

 

Bedrooms

If you’re serious about getting a market-leading rent from professional tenants, consider installing full-height built-in wardrobes. They provide tons more storage than their freestanding cousins, making it easier and tidier to stow items like suitcases, boxes, weights, yoga mats, and other personal items.

 

You’ll also have less wear and tear from bulky furniture being carried in and out.

BONUS TIP: Choose space-saving sliding doors with mirrors to make dressing make a room feel bigger and brighter.

 

Hooks

The humble hook makes life so much easier in so many places. On bedroom doors for clothes; in bathrooms for towels and robes; in kitchens for aprons and tea towels; and by the front door for coats.

 

 

OUTDOOR SPACE

Professional tenants aren’t looking for large lawns where children can run around and build tents. They love stylish, private and low-maintenance patios, balconies and terraces with things like:

  • space for a table and chairs to comfortably seat the number of tenants
  • easy-care surfaces like paving and decking
  • outdoor lighting
  • a few pots with hardy succulents that thrive on neglect
  • room for a barbecue

 

It’s also worth thinking about how your tenants will get outside. For singles and couples, it’s not so important, but for sharers, the access to outdoor space should be through a common area like a living room, kitchen or hall. If it’s through someone’s bedroom, there’ll be times when it’s inaccessible to the other tenants, which could become contentious.

 

 

Final words

By actively designing your buy-to-let to attract high-earning professionals, you’ll achieve premium rent, add value to your property and keep it ahead of the market. And as your equity increases, you can release it to fund future investments.

 

If you’re a landlord with rental property Leeds, we’d love to show you how we can help you optimise the performance of your lettings portfolio. Call us 0113 460 2416 or email us at info@silverspringlettings.co.uk for a friendly chat and expert advice.

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BUY. REVAMP. RENT. REPEAT: FOR SUSTAINABLE LETTINGS SUCCESS

There are many different models of buy-to-let, but a proven winning formula is buying a property in need of renovation, upgrading the specification, then releasing the increased equity to fund another buy-to-let project.

 

Homes in need of work cost less to buy, which immediately reduces the cost of stamp duty. And when you’re not paying for somebody else’s taste, you can add value by updating the interior and identifying untapped potential.

 

With tenancies getting longer and renting becoming a lifestyle choice, tenants are looking for high-quality homes to live in for longer. By meeting this continually growing demand, you’ll achieve higher rents and grow a profitable long-term business.

 

Finding suitable homes to renovate, getting the specification right, and having the finance in place for the purchase and works are essential elements of any successful project. So here’s our comprehensive guide to the “buy, revamp, rent, repeat” system used by many successful landlords.

 

 

BUY-TO-LET COSTS AND FINANCE

Before you go hunting for a buy-to-let project to renovate, your first step is to confirm your spending power and budget for the extra costs involved with buying and financing a rental property.

 

The first and most important thing is that buying a second or investment home attracts additional Stamp Duty, so make sure you factor the upfront expenditure into your plans.

 

Buy-to-let mortgages also work differently:

 

  • loans are usually capped at 75% of the property valuation
  • lenders require a monthly rental income of at least 125% of the mortgage payment
  • interest rates and fees are generally higher than residential loans

 

Most buy-to-let mortgages are fixed-rate and, just like residential loans, have a penalty for repaying the balance before the end of the fixed-rate period. Savvy landlords often take out a standard variable rate first, then switch to a competitive fixed-rate after renovations to avoid wasting thousands of pounds in charges.

 

Aside from dipping into your savings, options for funding the renovation works include:

 

  • rolling the costs of the works into your buy-to-let mortgage
  • short-term refurbishment bridging finance
  • releasing equity by remortgaging your own home
  • taking out a secured personal loan, also known as a second charge

 

Given all of the above, we recommend speaking to an independent financial adviser to clarify what you can borrow and which lenders and loans are right for you.

 

 

SOURCING HOMES TO RENOVATE

Once you’ve confirmed your budget and chosen location, it’s time to start looking for a property with the right potential.

Trawl the property portals

To find potential renovation projects, select the type of property you want (a 3-bedroom house, a 2-bedroom apartment, etc.), then reduce the maximum price band by 10-20% of the typical market value. This will remove the already-perfect homes from your results, making it easier to find the ones that need work.

 

Approach local estate agents

The property portals tell you what’s on the market, but local estate agents know about homes that are coming soon.

 

Many investment buyers approach agents, so make sure you have your funds in place and know exactly what you want. Be specific about the type of property you’re looking for, the streets you’re most interested in, and how much work you’re willing to take on.

 

Be friendly and professional, then stay in touch with the ones who seem most promising.

 

Look for auctions

Because they attract investment buyers, auctions are a reliable source of unmodernised and neglected homes. A successful bid is a legal commitment and, because of the speed required to complete the purchase after the hammer falls – usually 28 days – most auction sales are to cash buyers.

 

It’s not impossible to buy at auction with a mortgage, but you’ll need to pay for a survey to be carried out before the auction and have a mortgage offer in place. Even then, if your bid is not the highest on the day, you’ll lose any costs you’ve incurred.

 

Pound the pavement

Not everyone has the time or inclination to wander the streets in search of neglected homes, but it can create opportunities. If you’re not comfortable knocking on doors, you could either leave a note with your contact details, or talk to the local agent you liked the most and ask them to follow up the lead.

 

 

 

THE RENOVATION GAME

When taking on a renovation project, your best bet is to start small and know your limits: don’t buy a massive wreck with multiple structural problems if you’re new to the game. Take the time to build your experience, grow your knowledge and gather a team of trusted contractors.

However complex or straightforward the works, it’s vital to get the finish right. Too cheap and your buy-to-let will be difficult to rent with a disappointing income and a high turnover of tenants. Too expensive, and you’ll be out of pocket with a low return on your spend.

 

If you’re unsure of the correct specification for rental property in Leeds, give us a call on 0113 460 2416 or drop us a line at info@silverspringlettings.co.uk for some guidance.

 

Meanwhile, let’s look at different types of projects.

 

Complete refurbishment

This is for the confident expert and requires a building contractor and full team to gut a property and start from scratch.

 

Having everything new will generate the highest income and protect your property’s value for many years, but refurbishments are expensive, and you should budget for surprises and delays.

 

Conversion

Many houses (particularly Victorian terraces) divide easily into apartments, and plenty of commercial spaces make excellent homes.

 

Although converting property can be highly profitable, it’s also complex. You’ll need specialist development finance, and you’ll be dealing with local authorities, architects and construction firms. There’s also extensive new-homes regulation to satisfy. In short, not for the novice.

 

Modernising

Mortgages are much easier to get on habitable properties: lenders mainly look for a working kitchen and bathroom, even if they’re old. You may get lucky with simply replacing those, stripping off 70s wallpaper and replacing swirly carpets.

 

Watch out for wiring and heating. Boilers are easy enough to replace – you might even be able to retain existing pipework and radiators – but installing an entirely new heating system or rewiring can be more disruptive. If you need to channel into walls and ceilings, it’ll mean more expense with repairs and replastering.

 

Remodelling

Changing a home’s layout can release untapped value and income, usually by increasing the number of bedrooms. Examples include turning an unused loft into a master suite, or relocating the kitchen into the living room to gain an extra bedroom or study.

 

In freehold homes, you’ll generally need simple building regs permission from the local authority. For leasehold, you’ll also need approval from the freeholder, and you’ll need to update the lease plan to reflect the new design.

 

Refreshing

Unlike unmodernised homes, those in need of redecoration are often up-to-date but poorly maintained. They can look a lot worse than they really are, which means they can sell for less than they’re technically worth.

 

Look for superficial issues: scuffed and damaged walls, dirty floors, greasy kitchens and overgrown gardens are all simple enough to put right, but they can be off-putting to regular homebuyers.

 

 

RENTING OUT YOUR PROPERTY

As soon as you’ve completed your renovation project, it’s time to find tenants who’ll take good care of it.

You’ll get the best income and the best tenants when your letting agent:

 

  • is local to your property
  • has a history of renting other similar homes nearby
  • uses high-quality photography in their marketing
  • writes enthusiastic descriptions
  • advertises on at least one of the major property portals
  • has a management department
  • has a thorough referencing procedure

Ask every letting agent you meet for examples of homes they’ve let that match the quality and location of your rental property, then check their reviews on Google for an idea of how successful, professional and helpful they are.

 

Finally, don’t forget one last essential element: how does it feel to talk to them? Your letting agent should be someone you enjoy talking to and feel you can trust, so are you filled with confidence and the sense that you’re in good hands?

 

Keep looking until it feels just right.

 

 

REPEAT THE PROCESS

After you’ve renovated, rented out and refinanced your buy-to-let, it’s time to look for your next project.

Before you do anything else, take a moment to review your first venture. How did everything go?

 

  • Was it easier or harder than you expected?
  • What aspects of the project did you particularly enjoy?
  • Are you comfortable taking on the same amount of work again?
  • Is there a new or bigger challenge you’d like to take on?
  • Did you learn anything about dealing with suppliers and contractors?

 

With more experience, you’ll find your perfect niche. You might be in the mood for more ambitious projects to flex your creative muscles, or you might prefer less work and faster turnarounds.

 

As you become known among local estate agents as a reliable buyer and a landlord with high-quality homes, you’ll move to the top of their list of people-to-call when a suitable future project becomes available.

 

And with the right formula in place, you can recycle your initial deposit, then refinance your buy-to-lets to fund future projects, time and time again, leaving your savings free for enjoying life.

 

 

Final words

Buying, renovating, renting and refinancing buy-to-let property is a proven system that you can repeat to create ever-increasing returns. It’s a solid way to build a portfolio of high-quality homes that tenants enjoy and love, all the while growing in value to create a secure financial future for you and your family.

 

To begin or expand your lettings portfolio, or to talk about the buy-to-let market in Leeds, call us on 0113 460 2416 or drop us a line at info@silverspringlettings.co.uk – we’re here to help you become and stay a successful landlord.

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2021 RENTAL REVIEW: A THANK YOU TO LANDLORDS & TENANTS

As we approached the beginning of 2021, hopes were high of a return to normal, with Covid and Brexit seemingly in the rear-view mirror. But the year turned out very differently, and both have continued to feature strongly in everyone’s life.

 

With supply shortages, lockdowns, the end of furlough, tax changes and a whole heap of uncertainty, we think it’s fair to say that 2021 has been a bit of a jungle!

 

From our perspective, the year also showed how relations between landlords and tenants in the private rental sector are not a scene of constant combat. In fact, the market is more friendly, open and communicative than we’re sometimes led to believe.

 

So, to end 2021 on a high note, let’s acknowledge the challenges landlords and tenants have faced, along with how they’ve met them and what the future may hold.

 

 

LESSONS OF THE LETTINGS MARKET

Just as in 2020, the property market was allowed to remain open through the lockdowns of 2021, with the Government recognising the importance of people’s lives at home.

It’s so much more than an economic decision, with our emotional well-being heavily improved by living somewhere that meets our needs and reflects our lifestyle. In particular, as working from home remained the norm for so many people, there was no shortage of tenants hunting for extra space both inside and out.

 

Virtual viewings, social distancing at face-to-face appointments, managing PPE and hygiene – we’ve all mastered all sorts of skills to keep each other safe while finding a place to live. And we’ve mostly managed it with a smile.

 

More than anything, 2021 proved that absolutely nothing gets in the way of our national obsession with making a new home.

 

 

LANDLORD & TENANT CHALLENGES

Perhaps the biggest challenge for private landlords in 2021 was the final phasing out of mortgage interest relief on buy-to-let homes.

Already hit with extra Stamp Duty/LBTT that increased the costs of buying an investment property, many existing landlords decided to sell up and exit the rental market altogether.

 

It remains to be seen what they’ll choose as an alternative investment strategy. Perhaps some will return through the newer business models we covered in our article on https://cutt.ly/TUr3AZ2.

Meanwhile, tenants faced uncertainty with the end of furlough and concerns over the pandemic’s effect on the economy and employment. This made it essential for letting and managing agents to provide a listening ear for any tenant who thought they might run into difficulty.

 

Our experience was that tenants prioritised their rent over other costs, finding savings where necessary to avoid arrears building up. Our landlords were also flexible wherever possible, meaning we saw very few problems among the homes we let and manage.

 

 

SHORTAGE OF RENTAL HOMES

We’ve always had more tenants looking for a home in Leeds than properties available, but 2021 saw a huge drop in landlords and rental stock.

As landlords sold, their properties were snapped up by eager buyers who took advantage of the Stamp Duty/LBTT holiday. This removed rental homes from the market and increased competition for those that remained.

 

While many tenants became homeowners, the lack of rental stock hasn’t gone away, so the competition for homes is almost certain to continue throughout 2022. A survey of 500 landlords by Simply Business found that only 7% had plans to expand their portfolio, while Zoopla recorded the supply of rental homes in Q3 at 43% below its five-year average.

 

When the housing shortage is most acute and the potential for rental income so high, it’s ironic that the increase in upfront purchase costs and ongoing taxation has created a financial barrier for private landlords to invest.

 

 

OPPORTUNITIES FOR THE FUTURE

As with all difficulties and obstacles, opportunity is never far behind. Many landlords see buy-to-let as key to their financial future and are exploring new ways to grow a sustainable portfolio.

Anything that makes tenants’ lives easier and more enjoyable, particularly the busy professionals that many landlords want to attract, will always be met with enthusiasm.

 

As renting becomes a longer-term lifestyle choice, tenants are actively seeking comfort and permanence: there’s a genuine market and real desire for better-quality places to live. Whether it’s a single occupancy or a multi-let, tenants are happy to pay a premium for a higher specification and a focus on modern design in empty and furnished homes.

 

Building to rent also shows a lot of promise, where landlords partner with construction firms to buy land and build on it. It’s a model that reduces acquisition costs and slashes the Stamp Duty/LBTT liability, thus removing two major obstacles for buy-to-let investors.

 

 

THANK YOU TO EVERYONE

Landlords, tenants and letting agents have a symbiotic relationship that forms an essential part of the property market.

Most landlords are regular people who take real pride in offering homes that are comfortable and enjoyable places to live.

 

Tenants, meanwhile, are generally easy to deal with, look after their homes, pay their rent on time and live as responsible residents and neighbours.

 

Of course, problems sometimes arise, and that’s where managing agents come in to provide perspective, guidance and solutions. The vast majority of tenancies are amicable from beginning to end, and that’s down to the people involved.

 

Perhaps this doesn’t get aired enough, so we’d like to say thank you to all our landlords and tenants for weathering the storm – it’s been quite a year for everyone!

 

 

Final words

That just about completes our roundup of the lettings market for 2021. Wherever you’re spending the festive season this year, we hope you’ll have a very merry Christmas that leaves you refreshed and ready for 2022.

 

And if you’re thinking of becoming a landlord or expanding your portfolio next year, we’d love to help. Call us on 0113 460 2416 or send us a message at info@silverspringlettings.co.uk for a friendly chat about property in Leeds and the local buy-to-let market.

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LETTINGS TRENDS 2022: A LANDLORD’S GUIDE TO FUTURE DEMAND FOR BUY-TO-LETS

What are your plans for your buy-to-let business next year? Buying your first rental property? Upgrading your portfolio? Or expanding into new parts of the lettings market?

 

Keeping up to date with market trends is the cornerstone of any successful business, and being a landlord is no exception. By offering homes that offer a comfortable and modern lifestyle, you’ll continually attract high-quality tenants and market-leading rents.

 

Some of next year’s trends began life in city centres and are spreading further out, while others reflect evolving home life: flexible, sociable and economical are the buzzwords for next year! Climate consciousness, energy bills and outside space are among the biggest concerns of tenants, while new business models are creating more profitable returns for landlords.

 

So, let’s take a look at where the lettings market is going so you can plan your buy-to-let strategy for 2022.

 

 

GARDENS & OUTSIDE SPACE

The garden took on many new roles during Lockdown, with additional duties of pub, cafe, coffee shop, park, gym and even office. Searches on the property portals became more focussed than ever before on homes with some sort of outside space, and there’s no sign of that changing.

A Rightmove study found gardens topped the list of tenant ‘must haves’, with 49% saying they valued outdoor space above all else. If you’re looking to begin or expand your portfolio, don’t underestimate the draw of a garden or balcony.

 

Tenants expect to buy their own outdoor furniture, but consider these qualities for an outside space that gives year-round enjoyment:

 

  • Attractive and easy to care for
  • Decking, patios and simple planting
  • Exterior lighting
  • Outdoor heating – an infrared heater is an inexpensive touch of luxury
  • Privacy – even a trellis on top of a wall or fence can make all the difference

 

Remember that a garden doesn’t have to be huge to be popular. Families will generally look for a lawn and space for children to play, but single renters, couples and sharers tend to prioritise the minimal maintenance of patios and balconies.

 

 

WORKING FROM HOME

A recent BBC survey said 79% of business leaders and 70% of the public thought that working from home would continue in some form.

The pandemic has shown that people don’t necessarily need to fit their lives around their work anymore. Many are seizing the opportunity for change: some by going self-employed, others through flexible working that mixes days at the office with days at home.

 

This means that single bedrooms have found a new life and audience. Historically landlords looked for two double bedrooms to attract sharers, but one double and one single bedroom is the perfect solution for couples or singles who need a dedicated workspace at home.

 

Of course, some people simply need a place to sit with a laptop that isn’t the sofa or bed. Aside from dining tables and breakfast bars doubling up on duties, we see small desks appearing in bay windows, alcoves, under stairs and on landings as people create unintrusive work corners.

 

Are you unsure where a home workspace would fit in your buy-to-let? We can help you identify suitable locations to show potential tenants how well your property works for their lifestyle.

 

 

ENERGY EFFICIENCY

Two of the biggest news stories right now are climate change and rising utility bills. It’s a double whammy that’s causing everyone to look even harder at their energy consumption, for both the cost to the planet and their bank balance.

Tenants are asking more and more about running costs when we’re out on viewings with them, which makes the energy efficiency of your buy-to-let an important factor in its rentability. Government legislation is also set to tighten even further.

 

Not all energy improvements are expensive or require major work, and you can start with simple solutions like:

 

  • low-cost flow restrictors to taps and toilets to cut water consumption;
  • room and radiator thermostats to optimise heating use;
  • insulation of the hot water tank;
  • draft excluders over letterboxes and around doors to reduce heat loss;
  • appliances with an eco function (be sure to ask your agent to point them out).

 

Older homes tend to be less energy efficient, so if you have drafty single glazed windows or zero insulation, talk to your managing agent about a timetable for bringing them up to date and keeping your property in demand.

 

 

CO-LIVING

If you’ve not heard of co-living, think of it as a deluxe version of HMOs and multi-lets. It’s become big in purpose-built apartment buildings from corporate landlords, but there’s nothing to stop private landlords from increasing their income by offering something similar in houses.

Tenants already share, but co-living gives them a more coordinated experience around their outgoings, home life and how a property is run. Think:

 

  • weekly cleaning;
  • bills included;
  • a focus on design-led specification;
  • smart TVs and desks in each bedroom;
  • comfortable & sociable living spaces with high-quality furniture;
  • additional shared bathrooms or en-suites.

 

With its upgraded fittings and enhanced lifestyle, co-living has shown that busy professionals will pay extra for sharing with like-minded people who value a well-managed and stylish place to live.

 

 

BUILD TO RENT

If you’re looking to scale your buy-to-let business, have you considered building to rent (BTR)?

As the tax liabilities for lettings have increased, landlords with a long-term view are exploring more profitable models. The cost of building a property is less than its full market value, and Stamp Duty is only payable on the price of the land rather than on each home. All of that can quickly deliver savings of many tens of thousands of pounds.

 

Most new-build homes are built around owner-occupiers who prefer private spaces, but tenants appreciate shared amenities like communal terraces, co-working areas and social events. The idea is to create a place where tenants feel part of a permanent and dedicated rental community – somewhere they cherish and want to stay for the longer term, even moving within the building as their lifestyle changes.

 

Building to rent also gives you more control over maintenance and repairs. When you own the building and all the apartments within it, you can simply get on with works without needing to wait on the owners of each home for consent or access.

 

 

Final words

By keeping on top of market trends and evolving lifestyles, buying-to-let can still be a profitable business both now and long into the future.

 

If you’re a landlord in Leeds and you’re looking for a letting or managing agent to help you optimise your lettings portfolio, why not get in touch? Call us on 0113 460 2416 or message us at info@silverspringlettings.co.uk for an expert and friendly chat.