Category Archives: Lettings

Redstones Houses

The impact of school performance on property prices

Nationally, figures have been released that reveal that house buyers are prepared to pay more to live near high performing schools. This could also offer landlords great opportunities, if they take this into consideration.

Research from Lloyds Bank has revealed that parents pay an average of £53,000 extra to live in such areas. This figure has increased by 31% or £13,000 on 2015. Where pupils are achieving the strongest GCSE results, average property prices have soared to £366,744.

The research demonstrates that average house prices in areas with a state school in the top 30 of exam results have soared by £76,000 since 2011 and seven of the areas covered in the survey have seen house prices rise by over £100,000 since 2011.

Parents who manage to secured a place for their child at a leading school have seen prices rise from an average of £290,683 to £366,744 over the last five years. This represents a significant increase of 26%. This is in contrast to average house price increases in England, which have increased by £42,145 over the past 5 years from £240,208 to £282,353. This is an increase of 18%.

Of course, the popularity of areas close to high performing schools means that some buyers will be ‘priced out’. However, for landlords or buy to let investors, it could represent a great opportunity.

Director of Redstones, Manjit Virdi says, “This research shows the importance that parents place on living near top performing schools. For any landlords with properties in such areas, this should be reflected in their rents and for landlords looking to expand their property portfolios, checking academic league tables as part of their research would be a wise move.”

Redstones Red Cup

Brexit leads to a boost for the Buy to Let market

Buy-to-let activity has seen a boost in August, despite Brexit, with research revealing that buy-to-let valuations were up by 12.7% in August compared to the previous month.

From a landlord’s perspective, it has been a tough year, as the Government has introduced many changes to try and create a level playing field between homeowners and investors. These changes include the introduction of the stamp duty surcharge in April 2016 and the abolishment of the 10% Wear and Tear tax relief for landlords who rent out furnished homes has been abolished, so they can only claim the amount that they have spent. Also, mortgage tax relief is set to be phased out from 2017.

Despite these changes, buy-to-let activity has increased sharply. An encouraging economic outlook, high levels of employment and fading fears of a recession have been positively received, despite the uncertainty caused by Brexit. The Bank of England’s decision to cut the base rate for the first time in seven years also seems to have stimulated property investors.

Despite legislative changes, the buy to let sector seems to remain buoyant and resilient. Manjit Virdi, Director of Redstones says, “We are still regularly liaising with property landlords that wish to expand their portfolio, despite the political and economic climate. As well as helping them identify the right next property for their portfolio, we help them manage the often time-consuming burden of being a landlord.”

Redstones offers a wide range of property management services, from credit control to meter reading, repairs and maintenance, gas certificates and much more.

At the same time, house sellers are taking advantage of reports that house prices will increase following Brexit by getting their properties on the market. With new properties always becoming available, keep your eyes peeled on the local market by checking the search function on our website or registering your details with your local Redstones office.

Redstones Lettings

Longer tenancies supported by Government

Great news for landlords – the Government is now backing longer tenancies. The idea has been backed by the new Housing Minister, Gavin Barwell, who is trying to make longer-term tenancies available to tenants who want them.

His department has drawn up a model tenancy agreement which encourages longer-term tenancies and the Government is now working with the private rented sector to promote the scheme and identify any obstacles. This agreement sets out the rights and responsibilities of tenants and landlords, as a benchmark for tenancy agreements and outlines the ways in which families would benefit from longer agreements.

Manjit Virdi, Director of Redstones says, “I know that many of our landlords feel that long-term tenants make greater efforts to maintain their home and many tenants like the security of remaining in one property, so I believe this scheme will be welcomed by many.”

Interestingly, a recent report showed that the average tenancy agreement for a residential property in England stands at just 18 months, reflecting a short-term approach but clearly, some tenants will be happy to settle in one property for a longer period depending on their circumstances.

There are many stresses that come with being a landlord and finding new tenants once your existing tenants have left is just one of them. Although the average annual void period in the UK currently stand at 22 days, Redstones work pro-actively with our landlords to minimise void periods and identify longer-term tenants where possible.

Not only do we attract the right tenants, we pro-actively help our landlords manage their properties. Our uniques services for landlords include Redstones Platinum Total Care, which ensures that the rent is paid on time, every time and our Switch Agents Programme, which makes it very easy to switch to us if you’re dissatisfied with your current letting agent. This high level of service is what makes Redstones stand out in the lettings market.

Redstones Buyers

Finding tenants with a good credit score

As a landlord, an essential part of finding good tenants is checking their credit. This is the best way of predicting whether or not they will be able to pay their rent on time.

There are various issues to consider in regards to credit scores, such as the age of your tenant. When you rent property to younger tenants, they may not have built up enough positive credit history to achieve a high credit score. However, remember that if a potential tenant has a low credit score but you feel they would be a good tenant, you could consider a co-signer such as a parent.

Another issue is the region where the property is located. Factors such as employment rates and property values can impact credit scores, so the region’s average credit score needs to be taken into consideration.

Many credit reports highlight issues that may have adversely impacted your prospective tenant’s credit score. It’s worth investigating these issues, as some of them may not matter as much as others.

Income, of course, is another factor and a credit report helps to assess whether the tenant has enough money to pay the rent, with enough left over for other expenses.

Clearly, a mixture of judgment and intuition, as well as evidence, helps determine good tenants.

As part of the detailed tenant screening process at Redstones, we can advise on credit issues and much more to take the hassle out of finding good tenants.

To safe guard you in any eventuality Redstones launched the Redstones “Platinum Total Care Service”. Rent is guaranteed whether the tenant pays or not.

Redstones Lettings

Buy to let market to remain strong

Despite recent reports to the contrary, the buy to let market in the UK remains bouyant, with a growing private rented sector set to continue into the future.

In fact, the latest research shows that over the past 15 years, the sector has more than doubled. There are now 4.3 million households living in privately rented accommodation, demonstrating strong rental demand.

So, what has caused the private rented sector to grow? Firstly, more people are now living for longer and an increasing number of people live on their own. Furthermore, some people delay a choice to settle down with a family or they are staying in higher education for longer periods of time.

In addition, there is also a growth in population, which includes more migrants arriving in Britain. This is also combined with less available social housing and difficulties for first-time buyers in terms of affording properties.

Affordability is a key issue as house prices have been growing at a rate that has outpaced earnings, meaning that first-time buyers stay in rented accommodation for longer as they save for a deposit.

Whilst the Government states that it wants to get more people on the property ladder, the private rented sector is still likely to flourish.

There will be changes, however, as the new higher stamp duty for second properties could lead to higher rents and fewer properties available for rent. There is also tax and regulatory changes planned, which means that the buy-to-let market could grow at a slower rate but it will still continue to grow, nevertheless.

At Redstones, we regularly work with new and experienced landlords with property portfolios of all sizes and proactively advise them on market shifts. Here’s what makes us one of the leading lettings agents and property management experts in the West Midlands.

Redstones Property Management

How to be a good landlord

We’ve dealt with many landlords over the years at Redstones, so we know what makes a good one! Attracting and retaining good tenants isn’t always easy, but becoming a good landlord will help you achieve this. So, if you want to become the best landlord you can, we have some top tips for you:

  • Spend some time educating your tenants at the beginning of the process, so that they clearly understand your requirements and expectations. It certainly prevents misunderstandings later down the line. A fair tenancy agreement should also be in place upfront.
  • Often the quality of your rental property determines the quality of your tenant, so always keep your property well-maintained and clean when showing potential new tenants around.
  • Stay on top of repairs to minimise problems for tenants and have tradespeople on hand that can complete repairs quickly and cost efficiently.
  • Be pro-active and contact tenants after they’ve moved in to check how they’re settling in. This type of effective communication and courtesy speaks volumes about your status as a good landlord.
  • Always listen to tenant’s concerns and do your best to address them. It is this type of effective communication that convinces a good tenant to stay.
  • Make a full inventory, including photographs and meter readings to prevent any disagreements over damage throughout the tenancy.
  • Safety first – Gas and electrical equipment must be installed and checked annually by a registered engineer. Also, fire alarms and carbon monoxide alarms must be fitted by law. Regular checks are also necessary.

As a landlord, working with Redstones will mean that we can take care of all of this time-consuming detail for you. We’re experienced in finding good tenants and can advise you on exactly what you need to do to become a good landlord.

Find out more about our vast array of services for landlords.

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3 simple steps to improve the quality of property leads

If you’re looking to sell your home or you’re searching for rental leads, an important marketing approach nowadays is to display property on property portals. However, how can you ensure that this practice will lead to high quality leads? Here are Redstones top tips:

  1. 1.       Be selective

Be selective when focusing on property management lead generation. By advertising on the wrong portals, low quality leads can be the result. At Redstones, we use only the leading property portals, which have been proven to generate high quality leads. Online advertising is invaluable but that doesn’t mean advertising everywhere.

  1. 2.       Focus on photography

Whether you are trying to sell your property yourself or looking for rental leads through lettings agents, we’ve seen some images that are far from professional! Despite the quality of smartphones nowadays, using the camera function of your phone is not recommended. If you really want to present your property at its best and attract the right interest, professional photography involving the use of a wide angle lens is essential. It’s important to remember that buying a home is aspirational for most people and quality photography should reflect this to attract buyers. See our great example of photography being used at its best to truly ‘sell’ a property.

  1. 3.       Excellent descriptions

As part of an effective marketing approach, excellent, well-written descriptions are required that accurately describe the property. It’s always useful to use dimensions and include all advantageous features of the property. This may seem to be an obvious point but at Redstones, the use of poor quality descriptions amongst even professional estate and letting agencies never ceases to amaze us.

Ultimately, property management lead generation is about adopting a truly professional approach to marketing efforts, in order to gain high quality leads. This is a real area of expertise for Redstones.

Discover more about our other recommended approaches.

Redstones Lettings

Changes for the property management sector in 2016

Professionals working in the property management sector have always had constant changes, challenges or ‘obstacles’ to face in terms of business operations.

For example, in lettings, our team at Redstones need to keep abreast of all forthcoming legislation that will impact tenants and landlords, as well as buyers and sellers.

New legislation that came into force in October 2015 made it compulsory for all landlords to fit smoke alarms and carbon monoxide detectors into their rented properties and failure to comply can lead to a penalty charge of up to £5000.

Lettings agents are also required to be more vigilant about the risk of money laundering and in February 2016, the Right to Rent scheme went nationwide. Rent to Rent gives landlords the responsibility of checking the identification of everyone who is over 18 and expected to occupy their property, although this responsibility is transferred to agents such as Redstones, who have a thorough understanding of exactly how the checks must be conducted. All Right to Rent checks last for a minimum of 12 months and there are different checks required for tenants, depending on whether they have permanent or time limited rights to rent.

The property management sector in 2016 promises even more change, with schemes such as Help to Buy and Help to Buy ISAs and the recent increase in stamp duty on second homes to 3%.

At Redstones, we are accustomed to moving with the times, changing our processes and introducing simple systems that help our staff and clients manage change in the property management sector. Crucially, we also play a vital role in communicating the changes that occur and ensuring that our clients understand the impact on them.

We offer a valuable service that takes the hassle out of lettings, covering digital inventories, arranging annual gas safety certificates, managing inspections, credit control and much more, including staying on top of the legislative changes introduced in 2016 and beyond.

Find out more about property management services at Redstones.

Redstones Lettings

Maximising rental yield as a landlord

Landlords are naturally interested in turning buy-to-let investing into a profitable endeavour. So, in spite of higher Stamp Duty being introduced for second homes, how can you ensure that you become a successful landlord?

One key measure that will help you determine your success is rental yield. Essentially, rental yield is where you calculate the return on your investment or profit levels. To calculate rental yield, you need to calculate the upfront cost of buying the property and the cost of mortgage payments paid over 12 months, if you don’t own the property outright.

Calculate the rent you collect from tenants over 12 months and subtract your annual mortgage payments from the annual rent collected to work out a gross rental income. Then deduct all costs, including insurance, repairs and void periods from this figure to calculate a net rental income. A net rental yield is simply a percentage figure. Take net rental income and divide it by the initial investment figure, before multiplying by 100.

Calculating rental yield is a way of determining the quality of your investment. Capital growth over time and a strong rental yield (over 6% is considered as very good) represents a great investment.

Want to maximise your rental yield even further? Try our tips:

Increase or decrease rent – Increasing rental amounts is possible if your rent is set below the market rate and decreasing the rent can help you avoid void periods, if this is a concern.

Utilise tax reliefs – Although rental income is taxable, you can offset several costs such as letting agent fees, buildings and contents insurance, council tax, utility bills and maintenance costs. Not all tax reliefs will remain available for long however. From April 2016, the 10% wear and tear allowance will be scrapped.

Welcome pets – Not all rented homes allow pets, so tenants may be willing to pay more if your property welcomes them.

Modernise the property A decent kitchen and bathroom attracts a better calibre of tenant and means you can charge more rent.

Decrease overheads – Look at ways to cut costs, from remortgaging to finding cheaper tradesmen for property maintenance.

Discover more about how Redstone help landlords attract tenants and achieve the best price for their properties.

redstones right to rent

Right to Rent introduced nationwide

Originally trialled in the West Midlands, since 1st February 2016, the Right to Rent scheme has gone nationwide.

Rent to Rent gives landlords the responsibility of checking the identification of everyone who is over 18 and expected to occupy their property. Although the landlord is responsible for these checks, the responsibility can be transferred to their agent as part of a written agreement. Checks apply to occupiers who sub-let and residents with lodgers, as well as landlords.

All Right to Rent checks last for a minimum of 12 months and there are different checks required for tenants, depending on whether they have permanent or time limited rights to rent.

Managing Director of Redstones, Manjit Virdi explains, “We are working closely with our landlords, so they understand the implications of this scheme. As amendments to the Immigration Act are currently under consideration, this may result in changes to Right to Rent, which we will be pro-active in implementing.”

Checks must be conducted correctly, as fines are in place as part of the scheme. These fines can escalate to £3,000 per illegal occupier.

Manjit continues, “Our staff are fully trained on the correct manner of conducting Right to Rent checks and are always on hand to advise landlords and tenants.”

The correct process involves keeping a clear copy of each identification document and retaining the copy securely. A record must be kept of the date on which the check was made and all copies need to be retained securely for at least one year after the tenancy agreement comes to an end. More information is available via the Residential Landlords Association.

Right to Rent is just one element of the thorough tenant screening process conducted at Redstones. Get in touch with us to find out more.