Monthly Archives: April 2016
High Percentage of Landlords Don’t Use Formal Tenancy Agreements
Between the 1st and 8th March of this year, Direct Line for Business carried out a survey of fifty private landlords that revealed an interesting statistic about formal tenancy agreements. Apparently, a staggering 10% of landlords who had tenants occupying their investment properties did not have such agreements in situ. Another interesting statistic was that 58% of landlords who do not bother to use the services of a letting agent to assist in the letting out of their investment properties are actually utilizing rental contracts that they themselves have adapted rather than get a solicitor to check them. As a result, some may not be binding from a legal point of view. In fact, in the last 24 months, 13% of landlords have actually had rental contract disputes with their tenants. We are sure that you will agree this is a very high percentage and anything that can be done to reduce this figure has got to be welcomed. It is important that a suitable, legally binding tenancy agreement is in place as this document clearly sets out the basis on which the property is being let out. This document is therefore beneficial to both the landlord and the tenant….
Will Landlords Face Tighter Mortgage Affordability Checks?
The Bank of England has suggested that buy-to-let lenders introduce more stringent affordability checks when processing lending requests from landlords who have at least 4 properties that they are letting out to tenants. It will be interesting to see the reaction to this announcement. Apparently, landlords will be required to provide lenders with full details of other sources of income as well as other expenditure. This is in addition to providing details of rental income. This is because there is concern at the financial stability within the buy-to-let sector It is also interesting to note that lenders will also be required to take into account the impact on a landlord’s finances of a potential rise interest rates may have on the likes of buy-to-let mortgages. There are many lenders that already operate stringent lending criteria when it comes to assessing applications from landlords but it is hoped that the new proposals suggested by the Bank of England will bring all lenders into line in this respect. This is something that will probably be welcomed by many involved in the sector. It will be interesting to see how the above impacts on the buy-to-let sector. Will it put some existing landlords…