What Rules and Regulations Are Ayrshire Landlords Falling Foul of the Most?
Being a landlord is a tricky business. There are nearly 200 different pieces of legislation covering the how, why, and when of managing a rental property. Here are just four that landlords are often not getting quite right.
Deposit protection
In England, Scotland, and Wales, the deposit must be registered with a deposit protection scheme. The 2021 UK Landlord Survey found that 81% of landlords find registering their deposit difficult.
The deposit must be registered within 30 days of receiving cleared funds. The schemes are government-approved and the tenant must be informed where the money is deposited.
Energy performance certificates
Every rental property in the UK has to have an Energy Performance Certificate (EPC). They are stored on an electronic register that is publicly available. However, they also have to be included in any advertising you do for your property.
Electrical safety regulations
In December 2015, strict rules about electrical testing for new tenancies in rental properties came into force. Inspections must be carried out by a qualified person on all fixed electrical installations.
Gas safety check regulations
If you have gas going in to your rental property, all appliances, pipework, and flues must be checked annually.
As for the electrical safety tests, ensure that you use a qualified engineer and don’t plump for the cheapest. The report must be given to the tenant within 28 days as well.
TOP TIP: As with any time you need to visit, or arrange a visit to the property, make sure you give the tenant at least 24 hours’ notice. Keep a record of having given notice. If the tenant refuses access, you’ve then got the evidence that you tried.
If you’re a landlord in Ayrshire and are not 100% sure on all the rules and regulations you need to abide by, get in touch with us at Parkview Property. A free, no-obligation chat will show you what you might need to tweak or if you’re on the right track.
A Guide To Buy To Let Mortgages for Ayrshire Landlords
In this three-minute read, we compare the different types of buy-to-let mortgages.
When choosing the right buy-to-let mortgage, landlords face a key decision: go with an interest-only deal or opt for a capital repayment arrangement.
Both options have their pros and cons. Let’s take a closer look.
Interest-only mortgage
Your payments only cover the interest on the loan and have no impact on the capital.
Pros
- Lower repayments
Your monthly repayments are lower than that of an equivalent capital repayment mortgage.
For example, with a 25-year interest-only mortgage of £200,000, monthly repayments would be £573 (4.45%, fixed for three years). With a similar capital repayment mortgage, you’d pay £996 a month*. That’s a difference of £423 a month.
- Less financial stress in between tenancies
If the property is vacant for any reason, it will fall on your shoulders to cover the repayments. Lower repayments equal less stress.
- Bigger monthly income
As your mortgage repayments are lower, less of the rent goes to your lender. Instead, it winds up in your pocket.
- More flexibility
You can spend this extra cash on the upkeep and improvement of the property or divert it to other investments.
- Sell and make a profit
If the property appreciates in value over time, you can sell up and make a tidy profit.
Cons
- You won’t own the property
As you won’t be repaying the capital loan, you’ll still owe a substantial sum at the end of the mortgage. (Although you can sell the property, pay this debt, and hopefully still be ahead.)
- The lender earns more
You pay more interest to your lender over time compared to a capital repayment mortgage. This is because you never reduce the size of the capital loan, so the interest charges never reduce.
- Risk of negative equity
Historically, property prices have been on an upward trajectory – last year, they grew in the UK by a whopping 8.5% – so the risk of negative equity is low.
And even if prices do drop, if you’re prepared to ride out market fluctuations, then the long-term outlook is positive.
The real risk comes if you need to sell in a hurry. If the property’s value has dropped, you could end up owing more than the property is worth.
Capital repayment mortgage
Your monthly repayments cover the interest and gnaw away at the capital.
Pros
- Ownership
At the end of the mortgage term, the property will be yours.
- Less interest
You pay less interest overall because the capital loan decreases – albeit gradually – with every repayment.
Cons
- Higher repayments
As we mentioned earlier, the monthly repayments will be higher, and you’ll need to cover them when the property is vacant.
Choosing the right option
There’s no one-size-fits-all solution, although most landlords opt for interest-only**.
Landlords need to weigh up their circumstances and investment goals carefully. For some, the priority is earning a monthly income; for others, it’s working towards owning a property that they can pass on to their children or even move into themselves.
For advice about making a buy-to-let investment work for you, contact us here at Parkview Property Ltd.
*Approximate figures only, based on a property worth £265,000. Always seek independent financial advice.
** National Landlords Association
Deposit Disputes: How Ayrshire Landlords Can Avoid the Most Common Cause of Conflict
In this three-minute read, we look at how Ayrshire landlords can protect themselves from getting caught up in the most common cause of end-of-tenancy disputes.
When a tenancy comes to an end, one issue more than any other causes disagreements.
And it’s not holes in walls or missing rent payments that take the number one spot.
According to recent data* cleaning is the most common cause of strife.
Yes, that’s right, grotty carpets, greasy ovens and filthy loos most often turn out to be the bone of contention between tenant and landlord.
The latest figures (which cover the year up to March 2020) show that there were 34,993 disputes in 12 months (a slight drop from the previous year).
Of these disputes, cleaning was cited in 42% of cases followed by:
- Damage to the property (41%)
- Redecoration (39%)
- Gardening (23%)
- Rent arrears (14%)
So why does cleanliness (or lack thereof) spark so much antagonism? The problem is everyone has a different definition of what constitutes “clean”.
A landlord may be looking for a professional standard of cleanliness, while the tenant may think waving a cloth over a surface or two is enough.
As most tenants want their deposit back, they almost always vociferously argue that they have left the property in the same condition as it was at the start of the tenancy.
I cannot stress this enough:
The only way a landlord can push back if this isn’t the case, is by having a clear and definitive inventory that includes proof of the property’s condition.
The inventory should include photographs and videos (dated, of course) and written descriptions of the condition of the property. (Make sure you cover areas that might be the subject of dispute, such as inside the oven or the shower.)
A good inventory serves two purposes:
1) It gives the tenant a clear understanding of what is expected of them. They know you’ll be checking at the end of the tenancy, so they are more likely to take good care of the property.
2) If you do end up in a dispute, you have the inventory to back up your side of the story. An inventory that is too general and lacking in detail, means it will be almost impossible to make your case.
With the issue of cleaning – as with pretty much all other aspects of being a successful landlord – it all comes back to communication.
Being open and clear with your tenant right from the beginning (and giving them a copy of the inventory) will set the right tone.
Regular inspections throughout the tenancy will maintain the momentum, and a friendly but straightforward chat just before the final inspection will leave little room for confusion.
If you’re a landlord in Ayrshire or anywhere for that matter, and have any questions about managing a tenancy, get in touch with us here at Parkview Property, we’re happy to help.
* Data from The Dispute Service – an organisation that offers a landlord/tenant resolution service – was analysed by Decorus for Sage, property management software providers.
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