National Landlords Association

Encouraging renting

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Landlords are a social bunch

Did you know that three in 10 landlords visit property-focussed online forums on a daily basis? That’s a significant proportion.

A third of landlords say they visit such forums once every few days, a fifth visit once a week, and 10 per cent visit a few times per month.

The most referenced reason for visiting these forums is to obtain landlord advice and guidance (54%) and to keep up to date with general industry news (38%).

Interestingly, only a third (33%) say they use social media in a personal capacity, with the remaining two thirds (66%) using it for business purposes.

And at the time of the survey in 2013, the most used platform was facebook and linked in (both 50%), with only two in five landlords (40%) saying they had a twitter account.

Take our latest social media survey

It’s hard to believe that there aren’t more landlords engaging with social media and in particular twitter nowadays. As the largest landlord association the NLA is always looking to develop a better understanding of landlords and exploring new ways to engage with the landlord community.

So if you have a few minutes to spare and are willing to share your social media habits with us, then please take our latest survey here.




If you want change, petitions are not the answer

Budget lobby petitionsSince the Budget in July we’ve had a number of members call or email in to ask why we haven’t actively promoted the online petition against the Government’s proposals to reduce mortgage interest tax relief.

The simple answer that we’ve given to members is we believe the process is a waste of time, and that while we would never discourage landlords from signing it, we are not making it the main focus of our lobbying efforts.

Granted not everyone will agree with us – but we thought it would be useful to explain why the NLA tends not to promote petitions, and what we suggest landlords do to make their voices heard.

How the process works

If a petition gets 20,000 signatures the Government responds to it. In practice this just means that they repeat the same thinking and justification for the scheme that they outlined when they announced it, which is exactly what the Government has done in this case.

If a petition gets over 100,000 signatures then it is considered for a debate of MPs. That sounds impressive to some; however the reality is very different.

Even if it is granted a debate (and remember it needs only be considered) it won’t take place on the floor of the House of Commons but instead in the Grand Committee Room.  This sounds posh but, as you can see, it is effectively a side room which consists of table and cushioned chairs; very different from the grandeur of the Commons and Lords opposing benches. It will also only take place when ‘parliamentary time allows’ meaning that it could be months down the line, by which point the chance to affect change may well have passed. 

Why the scepticism for the process?

Attendance at debates is often abysmal, and most MPs that attend will have been put up by their whips to speak on the petition’s behalf; or more accurately to go through the motions, speak around the general subject and then ask MPs to consider the petition and note its contents. However, relatively few petitions ever reach debate stage.

An example of one which did was entitled ‘To debate a vote of no confidence in Health Secretary the Right Hon Jeremy Hunt’.  At the start of the debate however, MPs had to stress that the Petitions Committee does not have the power to initiate a vote of no confidence.  Furthermore, the Secretary of State did not answer for the Government, but instead the Under-Secretary of State for Health, Ben Gummer responded to questions.  As you can see, it was really packed to the rafters. 

Other lobbing groups share our scepticism

The online petition site was a good innovation, but petitions are rarely an accurate gauge of public feeling on any issue and should not be used as such.

For example, the combined number of teachers and nurses in the UK stands at approximately 800,000, yet just 12,000 or 1.5% (at time of writing) have signed a petition entitled Remove the 1% public sector pay cap. Teachers, nurses etc. deserve a pay rise too’. This shows that the trade unions lobbying for change for these professions share the same scepticism for the process that we do, and that ultimately they’re not taking it seriously as a means of effectively changing government policy.

Government is already debating the proposals

Finally, and more importantly in this case, the Budget proposals are already being debated by MPs, so why do we need a petition? The Budget is a piece of legislation which, like any other, needs to be debated and follow the proper passage of a Bill.

It’s in Parliament that the NLA is focusing its effort, working hard to meet with and brief MPs in order to gain support for possible amendments to the Bill. 

Join us and lobby your MP more effectively

Not all MPs are aware just how much this will impact on landlords and their tenants, so we need to get as many on board to be our voice in Parliament in order to influence change on the Finance Bill.

And here’s where we ask for your support. We need you to contact your MP. To help we have introduced NLA Lobby, which will allow you to send a pre-written email to your local MP voicing your opposition to the proposals. All you need to do is input just a few bits of information in order to find out who your local MP is. It’s simple and takes a matter of minutes.

So sign a petition, by all means. But if you’re concerned about being able to survive the proposed Budget changes once they come into full effect in 2020, then your best option is to get lobbying your local MP before it’s too late.

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Five things to be aware of as a landlord

5 tipsThere is so much more to being a landlord than just purchasing a property and finding tenants that it is near impossible to name just five things to look out for. Being a landlord means that you are running a business and for it to be a success it must be treated as such.  This includes complying with the many, ever-changing laws and regulations which govern the sector.

To avoid getting into trouble here are 5 things a landlord should know:

  1. Tenancy agreement

It is vital that you provide your tenants with a comprehensive tenancy agreement which is robust and up to date.  A tenancy agreement sets out the terms of the tenancy and includes important details of each party’s responsibilities in a clear, concise and transparent way. The tenancy agreement may also be called upon should a dispute arise at the end of the tenancy. It is therefore vital that the agreement covers every aspect of the tenancy.

  1. Documentation

At the start of a new tenancy, the landlord should provide a tenant with certain documents. If you don’t, you could be in breach of the law, and may run into difficulties if you need to regain possession of your property.  From 1 October 2015, the Government will require a landlord to provide their tenants with the following documentation:

  • A valid Energy Performance Certificate.
  • An annual Gas Safety Certificate. Each gas appliance must be checked and certified each year.
  • A copy of the Department’s ‘How to rent’ Guide. This guide is accessible for free on the Department’s website:
  • Relevant tenancy deposit protection information.
  1. Deposit protection

If you take a deposit, it is the law to that it must be protected in a Government-approved scheme such as my|deposits.  A landlord in England and Wales (other rules apply to Scotland and NI) must protect the deposit within 30 days of receiving the deposit and provide the tenant with the prescribed information within those 30 days.

  1. Protect yourself and know the law

As a landlord, you need to protect yourself; that includes conducting a thorough tenant check and having appropriate landlord insurance.

You also have a responsibility to your tenants and you must ensure that you know what they are and follow them. This will ensure the safety of your tenant and keep your property in good nick.

As well as providing a safe environment for your tenant, you must also be aware of a wide range of other responsibilities. For example, is your property in an area where the local authority requires landlords to be licensed, and if so, do you have a licence for the property?  If you don’t, you will be breaking the law and could end up with a hefty fine.

  1. Information

Having readily available advice and support can mean all the difference.  Joining a landlord association such as the NLA will provide you with help, advice and support to ensure the smooth running of your letting business. The NLA has a comprehensive online library and an advice line. The NLA also offers training for new and existing landlords to ensure you develop your professional skills and are up to date with any new changes.

Most calls to our advice line have been because a landlord has an issue which arose because they were unaware of the rules and their responsibilities. Getting into trouble like this is stressful and sometimes ends up being very costly.

More than anything else, do your research before embarking on the landlord journey.

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European Court of Justice VAT ruling could cost UK landlords so act now

Gary Rowson, One EGary Rowson, OneE, urges landlords considering energy efficiency improvements to take action.

A recent EU ruling on the application of the UK’s reduced rate of VAT for energy saving equipment and materials is likely to increase costs for landlords with domestic properties and individuals who are either building or refurbishing their homes (who are not able to recover VAT incurred on their construction works).

Under current UK legislation, a reduced VAT rate of 5% is applied to the installation of energy-saving materials to make dwellings ‘greener’ – such as solar panels, insulation or micro-combi boilers.

However, the European Court of Justice has now decided that this interpretation is not in line with the relevant VAT Directive, which only allows the reduced VAT rate to be applied where there is a ‘social aspect’ to the works.

The judgement means that UK VAT legislation will have to be amended and the scope of the relief is likely to be significantly restricted.  While there’s no clear timeframe for when this will be implemented, landlords would be wise to seriously consider bringing forward any energy efficiency improvements in order to take advantage of the current situation.

If you have any questions about how this might affect your rental property business, please call OneE Group on 0207 8701234 or send an email to

And to find out more about how the NLA can help you to make energy efficiency improvements, visit NLA Property Services.

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Is the grass always greener on the other side?

Matt Oliver, NLA Public Affairs Officer, on more evidence to suggest rent controls simply aren't the answer.

Matt Oliver, NLA Public Affairs Officer, on more evidence to suggest rent controls simply aren’t the answer.

Today’s publication of the interim report from LSE, commissioned by the NLA  debunks the myth that rent control is a golden bullet, easy to implement and guaranteed to work in the UK.

The launch comes on the day that the four Labour candidates aspiring to be leader (and potentially our next Prime Minster) go head-to-head in a live TV debate.  The Private Rented Sector (PRS) and housing is going to be top of the agenda, especially as Labour’s London Mayoral candidates are all advocating some form of rent control in the Capital as they pitch for votes in their separate election primary.  This is all despite the fact the Mayor has no such powers to implement such a scheme.

Rent controls are non-transferable policies

When it comes to the PRS, LSE’s report shows the grass definitely isn’t always greener. For example, the model cited for the policies advocated by Labour during the election was Ireland but, as the report concludes, the controls introduced in the last few years have had very limited effect.  In fact the country is experiencing a housing crisis, with rapidly rising rents and a near-standstill in new housing production.

Ah, but what about Germany?

Yes of course, Germany. This is often cited as the best example of a country with a stable PRS, yet LSE’s report found that the system of indefinite security and in-tenancy rent stabilisation has in the past been cushioned by low house prices and demand, something we don’t have here, whilst initial rents can be well above current market levels in high-demand areas. Meanwhile in San Francisco and New York it looks like the main beneficiaries of interventionist policies are older middle class households, with the young hardly getting a look in.

What’s the moral of the story?

Well, in a nutshell: rent controls sound great on the surface but the evidence points to the contrary. The NLA is a strictly neutral political organisation.  However, as Labour members listen to these proposals for the PRS and contemplate choosing their third leader in eight years, much like some do with Tony Blair (the only Labour leader to win three successive General Elections), they will remember that you often don’t know what you’ve got till it’s gone.

*LSE’s final report, due to be published later this year, will examine London in more detail to see specifically how renters in the Capital would be affected by various proposals for change.

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How to get started with buy to let financing

BTL RB blog

NLA London Rep Richard Blanco unpacks buy to let financing…  

I’m always keen to encourage people to research their own buy to let (BTL) mortgages, but there’s no doubt it can be very daunting.  There are a few key concepts you need to understand and I’m going to outline them here for you.

What mortgage do I need?

Most investors choose to take out interest only loans, because the interest can be set against your rental income, making this a relatively tax efficient transaction.  The lender will look at your credit file, and most expect borrowers to have their own home mortgaged or owned outright and have a minimum income of around £25,000 – although this varies depending on the lender.  Some major lenders like Birmingham Midshires and The Mortgageworks don’t require earned income, but their credit score is consequently more onerous, especially at higher loan-to-value ratios (LTVs).

How will my credit score and income be calculated?

Credit scoring plays a key part and having a high credit limit on a card can increase your credit score. However, using the credit facility regularly can reduce it quite dramatically and your credit score will be spared from impairment if your balance is below 50% of your total credit limit. Lenders can be fussy about what they include when calculating your income, and most disregard the forecasted rental income that the property will command.  They also tend to favour employed income from a payroll, and things like bonuses and earnings from zero-hours contracts may be overlooked.

What about lending criteria?

Rental income must cover 125% of the mortgage but almost all lenders now calculate prospective payments at a higher notional rate of 5%, rather than the agreed mortgage interested rate. This makes it harder to obtain finance and is aimed at acclimatising borrowers to the likelihood of interest rate rises in the short to medium term.  Lending policy also tends to favour landlords with smaller portfolios and most lenders place a cap on how many properties you can own, regardless of who the loan is with – usually between 3 and 10 or if not, a cap on how much you can borrow overall.

And what interest rates should I expect?

In 2009, typical buy to let interest rates were around 5.25% with often an arrangement fee of around 2.5% of the loan applied, but thankfully rates and fees have fallen considerably, and at 75% LTV you are now looking at an interest rate 2.5% to 3.5% with fixed fees of less than £2,000. If you have a bigger deposit and can stretch to a 65% LTV, rates can be as low as 2%.  New entrants like Virgin Money, The Mortgage Trust, Precise and Aldermore – though not always the cheapest – have helped to increase competition.

How long will the process take?

The whole application process can be very slow and pedantic – with an average completion of 8 weeks –and the big three BTL lenders have about two thirds of market share partly because of their speed and efficiency: TMW, BM and Godiva. 

Should I use a broker?

Around two thirds of landlords choose to use a broker but be aware they may steer you towards specialist lenders who are not necessarily the best value.  Often building societies who mostly deal direct with customers can have some of the best deals, so try carrying out your own research by looking at interest rates for example on the NLA Mortgages search engine, or Moneyfacts before deciding either way.

Is it ready to let?

Mainstream lenders will require the property to be habitable and ready to let in order to proceed, which means a working kitchen and bathroom and no damp or subsidence.  Many won’t lend to flats over four storeys high, flats over commercial outlets or to freehold buildings containing flats. For situations where the property requires works, you could try commercial lenders like Lloyds, Shawbrook, Bank of Cyprus, private or other high street banks, but expect to pay an arrangement fee of at least 1% and interest rates of around 4% on loans of up to 70% of the value of the property.  Interest-only loans are harder to come by in this sector and your repayment term will be shorter – say, 15 years instead of 25 – but there won’t be any caps on the number of properties you own. 

Is bridging finance for me?

Bridging financers are the funders of last resort, usually lend on a non status basis at 65% LTV, and involve much higher costs of generally around 1% per month with no arrangement fee. It’s a bit like buying on a credit card. The advantage is the property can be in any condition – within reason, but be warned: never obtain bridging finance without a clear exit strategy and be aware that you will be stuck on it for six months before you can apply for a remortgage.

Growing a portfolio

I hope this has all been useful. Remember, once you have a mortgage, and if the property increases in value, you can think about growing your portfolio by releasing equity and applying for a further advance.  People often release funds from their own homes in this way to buy an investment property. It’s called capital raising, and most lenders will allow it for the purposes of buying property, though they may insist you own the property for 6 or sometimes 12 months, and apply a lower LTV.

For more information about growing your portfolio, see our guide here – available to NLA Associate Members and above. Not a member? Sign up for free here

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Top 5 reasons for financial loss

Top 5 reasons for financial loss

Chairman Carolyn UphillCarolyn Uphill, NLA Chairman takes us through recent figures which have revealed the top five reasons for a landlord making a loss.

Have you considered the costs that go into maintaining and running a letting business?

A recent National Landlords Association (NLA) survey confirmed that it is no easy feat being a landlord, and operational costs need to be considered as it can mean the difference between success and failure. The landlords surveyed revealed the top five reasons for their financial loss:

5.     Agency fees

12 per cent of those surveyed said that agency fees contributed to them making a loss. Varying levels of agent’s services are offered so make sure you know exactly what you’re being charged before signing on the dotted line. It is also best to check if there are any hidden extras too so that you don’t get hit with a hefty unexpected bill.

Agents will soon be required to state prominently in office and online whether or not they’re a member of a Client Money Protection (CMP) scheme so make sure they are a member of a reputable trade organisation such as UKALA.

4. Voids

14 per cent said they experienced void periods which resulted in financial loss. Being realistic about tenant turnover can save you from getting into financial difficulties. We recommend budgeting for 10 month’s income for a calendar year to cover any unexpected void periods.

3.     Rent arrears

One in five landlords (18 per cent) said they experienced loss due to rent arrears. It is so important that you address the issue of rent arrears as soon as possible. Talk to your tenant and try to ascertain why they haven’t paid on time, you can then put in place a payment plan if possible or offer them the option of ending the tenancy, so that both you and they don’t get into any further difficulties.  For more information here is a guide to rent arrears.

2.     Rental income

Two in five landlords (39 per cent) claimed that their rental income doesn’t cover their outgoing costs, which include things like agency fees, renovations, repairs, tenant checks, inventories, check in and out reports, just to name a few.

It’s understandable that you want to set a rent which is competitive and fair. However if it doesn’t cover your costs then you should look to see that, a) it is in-line with the current rental market, and b) that you have reserves which cover things such as repairs and maintenance as well as the bigger jobs of renovations and refurbishments. It could be that the property is just at a stage where there is a great deal of outgoings, which is why you should always put money away for a rainy day and budget appropriately for any unexpected costs.

1.     Renovating and refurbishing

The foremost reason given for financial loss was money spent on renovating and refurbishing properties between tenancies (53 per cent). Renovations are essential in order to keep your property looking and feeling desirable and for achieving competitive rental returns, and putting renovations off can become costly if associated problems keep adding up. 

You’ve been warned

This is a wakeup call to anyone thinking of investing in buy to let; make sure you go in with your eyes open. There will be considerable outgoings at times which can lead to serious losses unless you’ve planned ahead. This is why having a financial plan in place is so important.

Take it from those who’ve already taken the leap into buy to let. These landlord testimonials highlight the issues you might come up against when in the business:

Landlord A:

“Set up costs are extremely high, especially refurbishments e.g. kitchen, bathroom heating and subsequent marketing. Also, management fees are rising and securing extension of leasehold is difficult.”

Landlord B:

“My last tenant caused a lot of damage and the guarantor absconded, setting me back severely.”

The NLA provides a wealth of information and help to landlords, both to those just starting out and those who have been in the business for a while. Our ongoing support can help keep things on track.

Find out exactly what the NLA can do for you and how we can support you to help make a success of your letting business.


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