Following on from our Hackney carriage, which is still smiling widely and driving current and future clients to rental paradise across the City, we are pleased to welcome our new Minis. They look very cool, and will ensure that  our already rapid customer service can be delivered just a little faster! If you are looking to buy or rent property in Birmingham and Solihull, and want a Mini adventure, just get in touch!

The office is shut between Christmas and New Year, but don’t worry, the maintenance team (aka Santa’s little helpers) are on hand 24/7 to deal with any emergencies.

Happy Holidays!

The new law proposes to relax the requirements governing existing Deposit Scheme regulations. Compliance within 30 days will be required and courts will exercise discretion in awarding penalties of between one and three times the deposit amount if necessary.

This contrasts with existing rules which require compliance within 14 days and contains a strict penalty of three times the deposit for non-compliance. The Government’s reasoning behind the changes is to encourage a system whereby the courts enforce the regulations more diligently by making the requirements more equitable.

The tenancy deposit scheme has been criticised by many for being too harsh on landlords. Previously, the only penalty available to the courts was the imposition of a fine equivalent to three times the deposit, irrespective of the severity of the breach. This one size fits all approach made the courts reluctant to enforce the legislation.

The result of this was that landlords perceived it as an invitation to not take the regulations too seriously. The new regulations will ensure more of a level playing field for all landlords. Those who have hitherto prided themselves on their compliance with the regulations can take comfort in the fact that the courts will enforce the new regulations more consistently.
The likely implementation date is April 6. Watch this space!

The new Which? research claims that four of the top 20 UK estate agents by branch network size (Andrews, Foxtons, Knight Frank and Badger Holdings), charge for debit card transactions, and 13 charge for credit cards when renters pay their deposit.

Which? go on to say that the highest charge for credit cards was 5% from Andrews; well in excess of the estimated 1% to 2% cost of processing a credit card payment.

Analysing the research figures from Which?

With the most recent figures putting the average monthly national rental at £713, Which? assert that credit card charges add £53 to a typical six-week rental deposit. For London properties this figure amounts to an additional £77.

For debit cards the highest charge was 0.5% from Foxtons and Knight Frank, although recent Which? research showed the actual cost of a debit card transaction is closer to 10p.

Government legislation…sooner or later?

The figures follow a super-complaint from Which? to the Office of Fair Trading (OFT) in March this year, asking the regulator to investigate excessive credit and debit card surcharges. The OFT responded on June 28 proposing that debit card surcharges should be banned.

Which? say this could be achieved by a simple amendment from the Treasury to the Payment Services Regulations. However, as yet the Government has taken no action and consumers will have to wait until 2013 for the Consumer Rights Directive – which will limit charges – to be implemented.

These claims from Which? follow hot on the heels of Citizens Advice allegations that letting agents are ripping off landlords and clients with extra charges.

Customer trust comes with transparency:

In light of this data, we are keen to point out two aspects of this that potentially impact our own business. Firstly, most agents are not seeking to profit from these transactions. Secondly, we know just how important transparency is to our customers.

In the interests of customer friendliness, we thought it fitting to outline our charges. We pay between over 1.5% and up to 3.8% to process credit card transactions (less for debit cards, but it does cost us money!), and charge 4%+Vat as a transaction fee on deposit/rent monies.

We understand that our customers are being squeezed from so many directions with household bills and inflation rising. With that in mind, we set these charges at a level which is fair. After all, we have to transfer the amount in full to the landlord without deducting our costs for processing. We don’t charge tenants for using debit cards, even though that still costs us a little bit, and we don’t charge tenants a surcharge on our fees as that money goes straight to us.

We also charge tenants an administration fee for paying mid-term rent by card. Tenants can pay by standing order to aviod this, and most lease agreements will specifically require them to do so – if they pay by an alternative method that is up to them, but they should expect to be charged. If all 1200 of our tenants paid by card every month, we’d need three more staff members just to deal with that and then administration charges for landlords and tenants would go up across the board – all letting agents are trying to do is make charges fair, charging those that want to take advantage of a credit card facility and not charging those that choose not to use it.

Which? need to take another look:

Which? suggestion that agents who attach a surcharge on deposit or rent monies being paid, which then have to be passed over in full to a landlord, are somehow profiteering is at best under-researched. Perhaps those at Which? would like to  try paying a landlord rent monies that are a few percent lower than expected to cover a tenant’s card processing costs – they would soon find out what landlords think of their research results!

The consequence of the last housing boom is a huge increase in the amount of leaseholders in England and Wales, as over half the homes developed were flats. The austere economic times in which we live, have also brought the issue of over-inflated service charges to the fore.

The term leaseholder refers to people who own their own flat, but who are obliged to pay maintenance and service charges to the owner of the freehold.

Even though 7000 complaints out of 2.5m leaseholders, may seem small fry, a 46% increase year-on-year is not. In some cases flat-owners have been asked for payments of tens of thousands of pounds by those who manage the blocks they live in. In some extreme cases charges could amount to more than they actually paid for the flats in the first place.

Even though it is clear that, in most cases, the value of flats will increase as a result of improvements, there clearly needs to be a balance between value-for-money for the leaseholders and some of the staggeringly high charges being demanded from managing agents.

Legislation is in place in the form of the Landlord and Tenant Act 1985, where leaseholders have the right to examine all receipts for maintenance work. If leaseholders feel that the work is not “reasonable”, they can take their complaints to the Leasehold Valuation Tribunal.

However, while the area of managing agents and service charges continues to remain unregulated, it will be increasingly likely that this will work to the detriment of leaseholders. We need to take a closer look at countries like France and Australia; where property managers operate under licence and within a regulatory framework.

Leaseholders need to know that managing agents are acting in their best interests; otherwise there will be many more than 7000 complaints each year.

So how can you ensure you find the right managing agent?

First and foremost, make sure the prospective managing agent is a member of ARMA (Association of Residential Managing Agents) This is effectively the “kite mark” for managing agents and gives you assurance that you are dealing with a reputable firm.

A competent managing agent should be helpful and happy for you to take a look around some of the other developments they manage. After all, if they are proud of their work, they will jump at a chance to show you how professional they are.

The service level agreement should be pored over diligently and seek professional advice to make sure there are no hidden surprises. You know exactly what is expected of the managing agent in return for their fee, and the agent has a thorough grasp upon the details of your lease and the maintenance requirements outlined therein.

You will also need a comprehensive management agreement so that the lessees and the managing agent have a clear understanding of what their roles and responsibilities are. And lastly, the managing agent should have professional indemnity and, in the case of a Resident Management company, their proposed budget must include Directors & Officers Insurance.

Come and talk to us! We can fulfil all of the above criteria. And the pride we have in our work means we relish the opportunity to give guided tours of the developments we manage!

We have decided to add a sales arm to our well-established lettings and estate management branch, based on Knowle High St. With our aim to shake-up the market in the Solihull area, we know that Matthew’s 20 years of experience in residential property sales and management is just what we need.

If you want sound advice, and valuable insight into the residential property market in the Solihull area, just get in touch.

Interest rates are at a record low. This is a torrid time for savers. Indeed, the fiscally responsible saver is penalised when rates are this low. Mortgage borrowers however, provided they have the sufficient savings for the deposit or sufficient equity, have never had it so good.

So where can one put cash with safety and generate a positive return over-and-above inflation?

Inflation was 4.4% in July. You will do well to get 3% interest from the high-street banks, even if you secure the money for a year or two. Furthermore, if inflation remains high, this will eat away at the value of savings; thus penalising the saver further.

One way to overcome this and generate a good rate of return for your hard earned savings would be property investment. Buy-to-let investing can yield a much higher return than leaving it in the bank. But there are risks attached. Your return is dependent on finding reliable tenants that pay on time and getting good advice on where to buy.

Admittedly, the only way you are going to get a higher return is by taking some degree of risk. But we at Centrick work hard to mitigate the level of risk for our investors. To the delight of our investor customers, our tenancy rental arrears are 50% below the national average; something we are very proud of!

Why not get in touch, and let us show you how we can make your savings work for you.

But the Association of Residential Letting Agents, ARLA, has been quick to come out and vent their frustration at this latest development. Their justified concern is that without any requirement for lettings agents or landlords to acquire any formal qualification, there is no guarantee of professionalism in the industry.

Furthermore, with private rentals on the increase, and therefore tenants becoming more desperate to secure accommodation, this potentially plays into the hands of unethical operators looking to exploit the needs of customers..

ARLA have made a lot of inroads into this important area, and we support their position fully as an ARLA registered members. It is vital for consumers to seek the services of an ARLA regulated agent. This gives the consumer a great deal more protection for their money should the agent default with the client’s funds or for a failure to provide the required standard of service.

While there is no concrete regulation in place, there is no obligation for agents to become licensed. The factsheets that the Government have recently published are no doubt helpful, but they do not offer the surety for tenants that proper regulation would.

The only fly in the ointment, so to speak, is their concern toward the state of the UK economy. However, in some ways, the malaise in the economy, is working out well for landlords.

The increasing availability of buy-to-let mortgages and ever increasing demand for rental accommodation means landlords have not had it this good in some time. Furthermore, rent arrears levels are appearing to stabilise and void periods have decreased in recent months.

Landlords, as with all of us, are not immune to the fragile state of the economy, but their sector has shown strong levels of resilience.

A grey cloud does potentially loom large: Interest rate rises:

In the good times, it is always prudent to plan for all eventualities. Interest rates, while at record lows currently, will have to rise at some time. For landlords, interest rates, are a key driver in their business decisions.

And their ability to service their obligations, would be under real scrutiny were rates to rise. Research from BDRC Continental, indicates that 47% of landlords have at least five buy-to-let mortgages on their portfolios. 73% have at least one, with the average total mortgage being £477,060.

With mortgages, being at the heart of a landlord’s business, few would be immune from the impact of rate rises. Indeed, some would undoubtedly be forced to question the continued viability of their investments.

We see more lenders coming into the market while the sector is as upbeat as it is, and this will make BTL mortgages more competitive. But the one constant in economics is its cyclical nature; so there is an inevitability about rates going up; even if it won’t be any time soon.

Given that the Centrick office is full of such profound thinkers,  we will leave our landlord readers with something to mull over at the weekend from Confucius, the great Chinese philosopher: “When prosperity comes, do not use all of it.”

The average asking price for properties new on the market was £240,019 and there has also been strong growth in houses with five or more bedrooms that are selling at their fastest rate since June 2008, it also says.

However, while asking prices remained broadly static across the board, the market for larger properties showed increased strength as the length of time five plus bedroom properties stay on the market fell by 10% compared with May.

The high demand for larger family homes demonstrates the current strength of the market among those who do not face the challenges facing first time buyers, and are benefiting from continuing record-low interest rates. The data also suggests that there is increasing demand for these types of properties, relative to supply.

This activity at the top end of the market is caused by ever increasing demand for a limited number of large family homes. This is being fuelled by access to affordable mortgage rates for those who have demonstrated they can handle them responsibly and are able to contribute their own capital.

Regionally the West Midlands and London saw asking prices increase 0.8% month on month, Scotland saw asking prices up 0.6% and the North West, South West and East Midlands saw a 0.1% increase in asking prices.