Www.landlords.org.uk To promote and protect private residential landlords Challenges & Opportunities...

www.landlords.org.uk To promote and protect private residential landlords

Challenges & Opportunities for Challenges & Opportunities for the PRS in 2015the PRS in 2015

Steve SimpsonNLA


Agenda

• Introduction• National Landlords Association (NLA)• Landlord update• PRS and The Election….• The Opportunity• Risks and Challenges• Looking forward• Questions


Introduction - Me

• Steve Simpson• One of 36 Local Representatives across the U K• Local Representative, NLA, North East, Part Time

• Run local branch meetings in Middlesbrough, Durham & Darlington

• Joint meetings with Local Authorities & others• Work with Sunderland, Durham, Darlington, Hartlepool,

Middlesbrough, Stockton & Redcar Councils• Landlord in Chester le Street & Carlisle for 20 years• Worked with finance and mortgages for over 35 years• Retired from Financial Services in January 2014


Introduction - NLA

• Largest Landlord Association in the U K• Different membership packages• 55,000+ members and associates• To support, protect and improve the PRS• Work closely with National and Local government• A range of services and discounts through NLA

services and approved suppliers • Landlord accreditation scheme


Why join the NLA ?

• Benefit from access to our Telephone Advice Line advisors for immediate issues

• Our 24/7 Online Library provides you with up-to-date information, practical advice and legislative updates on more than 70 subjects


Members Advice Line

• Manned by other Landlords with variety of expertise• 38,000 plus calls per annum and increasing…• 70%+ of calls related to tenants, rent arrears & regaining

possession• Also – HMOs, Council Tax, Housing Benefit• And any other issue you can think of…• Will always recommend an approved supplier where

appropriate


Current Issues Facing Landlords

• Selective Licencing Regulation• Universal Credit and Welfare Reform• Cap on housing benefits• De-regulation Bill• Smoke/ Carbon monoxide Alarms• Changes to possession procedures, sections 8 & 13• Immigration checks• The tax man…..• Increase in reports of property damage• Increase in new/amateur Landlords


The PRS Picture – Nationally

• 22% - Of the overall housing market• 63% - Positive about own rental business• 53% - Positive about the PRS sector• 35% - Suffered rent arrears in the last 12 months• 29% - Property with a void period more than 3 months• 38% - Increased tenant demand in the last year• 5.7% - average yield


The PRS Picture – Locally

• 14% - Of the overall housing market (22%)• 49% - Positive about own rental business (63%)• 33% - Positive about the PRS sector (53%)• 55% - Suffered rent arrears in the last 12 months (35%)• 57% - Property with a void period more than 3 months (29%)• 21% - Increased tenant demand in the last year (38%)• 6.6% - average yield (5.7%)


PRS and The Election Result

• No real change…….• Housing was a key election issue, including PRS• Result mainly good news for the PRS – more relaxed

attitude to renting• Already a surge (South East) in overseas investment

into housing• Interest rates now more likely to slowly move

upwards• Continued welfare reform & benefit cuts


Why Do People Become Landlords…

• 39% - Additional Monthly Income• 30% - To Supplement Pension• 28% - Better Investment Return• 27% - Main Source of Income for the Future• 23% - Build an Inheritance for Family• 21% - Develop Properties and Add Value• 12% - By Chance – Inherited Property• 6% - Acquired Additional Property when met Partner• 6% - Had Problems Selling Current Property• Pension Regulation Changes ?


The Opportunity

We are in a growth industry

• Housing – continued increasing demand• Little growth in social housing• Need for 250,000 new houses per annum• At best, 175,000 new houses will be built• Tighter qualifying criteria on residential mortgages• Expected grow in the private rented sector


Opportunity – North East

• Demand for rented property continues to increase• PRS accounts for 1 in 7 homes in the North East• Has nearly doubled in the last 10 years• Market research is vitally important• Property prices generally remain subdued across our region• There is good rental and investment opportunities to be

found


Renting property is a Renting property is a businessbusiness

My House Your Home


Renting property is a business…

• Only 48% of Landlords consider their property lets as ‘a business’

• We are providing a home in exchange for rent• Why are you a Landlord?• Make sure you keep records and set a budget• Regular inspections and contact with tenants is vital• Referencing is also key to securing good tenants• Set rents correctly and review each year• Is a good tenant paying a lower rent better than a bad tenant?• Think about future plans


The Risks….

• There are over 70 pieces of legislation that affect the PRS• Selecting the wrong property – do your homework• Picking the wrong tenant – referencing is important• Mark sure your property is ‘legal’ to rent out

• Gas safety/EPC/Electrical Safety etc.• Ensure you use the correct forms and secure the deposit

correctly• Make regular inspections to your property• Carry out a fully inventory – photos/video• Tenants stop paying their rent…• Cutting corners…


The Challenges….

• Not to treat renting as a business• Finding the deposit (20 to 25%) to purchase or expand

portfolio• A poor personal credit rating• Securing funding for new property

• Personal Income Level• Minimum Purchase Prices• Exposure• Limited Company• HMO• Uninhabitable Property• Tenant Types


Moving Forward

• Private rented sector will continue to grow and presents a good investment opportunity in most cases

• Do your homework and research• Ensure you have good support from other Landlords,

local authority, NLA• Watch out for market changes and legislation • The PRS is a ‘business’ and run yours accordingly


Questions

Steve Simpson, NLA Tel: 07842 298495

E-mail – [email protected]

Www.landlords.org.uk To promote and protect private residential landlords Challenges & Opportunities...

Documents

Transcript of Www.landlords.org.uk To promote and protect private residential landlords Challenges & Opportunities...