FT briefly mentioned the problem yesterday - about the fact that there are more and more tenants who no longer can afford the place they have been renting. Now MSNBC talks about those would-be tenants, the former homeowners, who have a foreclosure history on their credit report:

As if losing a house on the court steps wasn’t enough, some former homeowners may find themselves turned away by apartment owners spooked by the foreclosure history on their credit reports.

One Virginia couple ended up living in a hotel after their foreclosure, according to Trish Lynch, a trainer and former credit counselor at ClearPoint Financial Solutions, who worked with them.

“No one would rent to them. And the hotel is costing them $3,000 a month to stay there,” she said.

If ever our readers should be in this position in London - Homeless London could be of big help in finding a cheap hostel or some another alternative.

Landlords are checking the boundaries leaving first-time buyers at risk of being priced out of both the rental and sales markets:

Financial Times: Landlords told to lower unrealistic rents

Savills has stopped accepting new rental stock at its Canary Wharf office and said it was being “very choosy” about what it took on in other areas. Knight Frank said up to 40 per cent of its rental properties across central London were over-priced by 5-10 per cent, as landlords sought unrealistic rents.

Landlord and BTL Blogs provides some good straightforward advice to landlords. Well written with insider tips that “fresh ones” in the business might not know about. The blog has several contributors, including:

An honest landlord.

Someone who knows more than the whole team of agents at ….

Wise tenant subscribes.

The Independent prints The County Homesearch Company’s manual for tenants, who need to admit that the rents are rising, whether they agree to it or not:

How to survive the rental market

With people looking to rent now facing the same trauma of gazumping that homebuyers have done in recent years, potential tenants need to be prepared.

The County Homesearch Company offers some tips:

*Register your interest early on so you can keep track of the types of rental properties coming onto the market.

*To avoid disappointment, view the property as soon as you can.

*Assure the landlord or agent that you are keen to take it on if it matches up with your specifications.

*Be prepared to make an early decision.

*Have your deposit ready and even a pen to hand to sign the contract straightaway.

*Be prepared to compromise – with a competitive lettings market landlords are able to increase their rent, so you should be realistic about what you can afford in today’s market.

No doubt that the article will be helpful to tenants as the landlords’ confidence is all time high.

Who is that lucky top agent in Mayfair? Banished.

Lots of numbers and quotes on rents rising in Times Online article First-time buyers trapped by rent rises.

We’re not surprised if all this talk is getting into landlords’ heads. Although … everything is getting more expensive by the day…

As we’ve said before - don’t panic before checking the rent trends for where you live.

We assume you are actively taking part of the London Festival of Architecture?

Icon magazine has a great guide on paper but the online version is very cool to browse as well.

Greenstone is an estate agency in North West London. We applaud their effort to make video area guides. Here are the links:

Little Venice
St. Johns Wood
West Hampstead

The TDS tenancy deposit scheme company has posted a couple of interesting case studies on their website. A few notes with takeouts from the disputes:

1. Make sure to always compose the Check In Report before signing any contracts, and Check Out Report before moving out/handing over the keys.

CASE OF THE BROKEN HOB
There was the issue of the damage to the kitchen hob, which the landlord claimed to have occurred during tenancy. This was shrouded in ambiguity, as the original condition of the hob was unknown. The adjudicator concluded that the hob may have been already faulty, making a 50/50 split of repair costs a reasonable settlement.

2. Make sure the Check In/Check Out Reports are as detailed as possible.

CASE OF THE CRACKED SHELVES
The final issue was the condition of the fridge-freezer. Already in the Check-In
Inventory, a shelf was described as cracked upon the commencement of the tenancy.
Upon Check-Out, three of the runners were broken. Although plastic does tend to
become brittle with age, the fridge-freezer unit was only three years old. Therefore,
damage was regarded as excessive and 50% of the replacement costs were covered by
the tenant.

3. Take photos and add them to the Check In/Check Out Reports.

CASE OF THE DAMAGED FLOOR COVERING
The floor in the kitchen was noted as having small tears and marks in the vinyl, which must have occurred during the tenancy, as they were absent from the check-in report. The claim was supported by photographic evidence provided by the agents. The tenant did claim that the damage must have occurred after he left the property, but the photographs clearly showed that these marks were by no means new. A new floor had to be fitted. The original floor was only one year old. The average lifespan of a floor of this kind is 10 years, so one tenth of the total cost was deducted in favour of the tenant. The total amount came to £500.58.

3. Make sure everything in Check In and Check Out Reports is typed and NOT handwritten, especially if the reports conducted at the beginning and end of the tenancy are not carried out by the same clerk or organisation.

FROM A CASE SUMMARY
Complications arose during the case due to the fact that the reports conducted at the beginning and end of the tenancy were not carried out by the same clerk or organisation, making comparison difficult. Also the notes were hand written in the Check-In Report and in places the handwriting was not always legible.

4. Make sure the notes in Check In and Check Out Reports are clearly stated and cannot be misunderstood. Explain when necessary.

FROM A CASE SUMMARY
In places the references were hard to decipher and lacked clarity. Consequently, the Inventory could only be used as a guideline.

5. Make sure to inspect the property yourself in detail, and not leave the formulation/conduction of the Check In/Check Out Report to the landlord or any other person.

THE CASE OF THE STAINED WALLS
The landlord claimed, based on his own Check-In and Check-Out reports, that there were additional marks to the walls in the living room, parts of the kitchen, and in two of the bedrooms. He was prepared to undertake the redecoration personally at the cost of £100.00. The landlord offered no information as to when the property had last been decorated. Considering that the length of the tenancy was 17 months it was unlikely to have been recently. We considered that most of marks could be attributed to fair wear and tear and awarded £50.00 towards redecoration.

6. Report the landlord immediately of any damages in the property, especially those you are not responsible for. Otherwise you might end up paying for something you shouldn’t.

THE CASE OF FORCE MAJEURE
The Check-Out report also noted damage to the fence panels at the rear of the garden, which had been described as being in good condition in the Check-In inventory. The landlord submitted a quotation of £95.00 for repairs. The tenants argued that any damage caused during their tenancy was due to weather and the fact that the neighbour had many trees planted at the side of the fence. In our opinion it was reasonable to expect the tenant to have reported this damage. The quotation submitted by the landlord seemed excessive, and he was awarded £30.00.

7. Always report the landlord immediately of any damages in the property in writing.

CASE OF THE ABANDONED HOB
The issue of greatest concern was the removal of the hob and oven by the tenant from the property which were returned by the tenant at the end of the tenancy. However, the landlord considered them “unusable” as they had been left outside for a period of time. As a result, he was forced to pay for their replacement even though they were only 3 years old. The tenant responded that she had complained about the quality of the appliances to the landlord in the period at the beginning of her tenancy. However, there is no documentation of such a correspondence taking place and with the lack of a Check-In Inventory it was difficult to date or establish the quality of the kitchen appliances. The adjudicator considered it was reasonable that the tenant should pay half the total costs of replacement and electrical services.

8. Disappearing and not being present for the Check Out Report conduction can leave you paying more than you might have to.

FROM A CASE SUMMARY
The tenant failed to attend the Check-Out, or to respond to our communications. The adjudication could be based only on documentation supplied by the agents.

There are 3 companies that the Government has awarded contracts to run tenancy deposit protection schemes:

The Tenancy Protection Service DPS

The DPS is the only custodial deposit protection scheme, is free to use and open to all Landlords and Letting Agents. The service is funded entirely from the interest earned from deposits held. Landlords and Letting Agents will be able to register and make transactions online. Paper forms will also be available should internet access be an issue. The scheme will be supported by a dedicated call centre and an independent dispute resolution service.

The Tenancy Deposit Solutions Ltd. TDSL

TDSL is a partnership between the National Landlords Association and Hamilton Fraser Insurance. This insurance-based tenancy deposit protection scheme enables landlords, either directly or through agents, to hold deposits. Letting agents can also join the scheme.

The Tenancy Deposit Scheme TDS

TDS is an insurance-backed deposit protection and dispute resolution scheme run by The Dispute Service that builds on a scheme established in 2003 to provide dispute resolution and complaints handling for the lettings industry. The new scheme enables letting agents and landlords to hold deposits.

We have added the link to our Useful Contacts page as well.

Source: directgov.co.uk

We noticed an interesting point in ARLA’s latest letting agents survey. Among the usual questions asked from the letting agents, there was one that draws attention to certain nationality tenants.

The question from the survey was: How Difficult Is It to Obtain References on Immigrants From New EU Member States?

Letting agents had the multiple choice of answers Impossible, Very Difficult, Quite Difficult, Quite Easy, Very Easy, Don’t Know. Here are their answers:

ARLA concludes: Compared with three months ago, respondents managing properties in Prime Central London now seem to find it more difficult to obtain references on immigrants from new EU member states with the Page 40 proportion saying they find it impossible, very difficult or quite difficult rising from 48% to 51%. However, respondents from the Rest of the South East are now finding it easier (65% compared with 72% three months ago) whilst those in the Rest of the UK are having about the same degree of difficulty.

The new member states are Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, Slovenia, Malta, Cyprus, Romania and Bulgaria.

ARLA should definitely explain why they have chosen to pay so much attention to tenants from those countries. What exactly makes it so difficult to obtain the references from this group? Could it be that the respondents just paid more attention to that group after ARLA draw attention to it three months ago?

Right now, if I were a landlord looking for a tenant and just read the survey - I’d be paying more attention to that group, would maybe prefer other nationalities to them, and might even avoid them, if possible…

We’ll try and see if we can get to the bottom of why the question was asked, and where it is supposedly taking us.

ARLA has released the results of their Members Survey of the Private Rented Sector Second Quarter 2008 (*pdf). A couple of interesting things that letting agents say:

- Average weighted rental returns for houses are down from 5.0% to 4.8% compared with three months ago, once again reversing the change seen in the previous quarter, whilst the equivalent figure for flats is also down from 5.0% to 4.8%, this time more than reversing the earlier change.

- Average void period has fallen to 3.2 weeks (22 days) from 3.4 weeks (24 days) in the first quarter,

- Tenants remain in the same property for a period of 16.3 months on average, a figure which is up slightly from 16.1 months in the 1st quarter.

- 17% of their lettings are to immigrants with 15% being to immigrants from EU countries and immigrant tenants are most likely to be encountered by those managing properties in Prime Central London and least likely to be encountered by those in the Rest of the UK.

- Nearly 2/3 of ARLA members (64%) say that it is either impossible, very difficult or quite difficult to obtain references on immigrants from new EU member states although this is much less likely to be the case for those managing properties in Prime Central London.

- 34% of landlords (down from 37% three months ago) are unaware of tenancy deposit protection but in the case of tenants, this figure rises to 50% (down from 55%).

- 7 out of 10 landlords (70%, up from 66% three months ago) are members of the Tenancy Deposit Scheme (supported by ARLA, the NAEA and RICS) with only a few having joined other tenancy deposit protection organisations. 6% of landlords (down from 8% three months ago) are unaware of the need to join one of these organisations.

One of UK-s biggest property portals (the one that we use most frequently lately) PrimeLocation.com draws conclusions from the listings on the site. Here’s what they say about the asking prices in prime London lettings April 2008:

- Surge in stock levels (up 6.9% in April) and falling demand from the corporate lettings market seem to have impacted on rental values, forcing the largest monthly drop in rental prices since August 2005. The impact of the credit crunch has reduced the level of senior recruitment in many major corporations, softening a key component of demand for prime London rental properties.

- For homeowners, there is little pressure to sell while employment levels remain robust and many are sitting tight until they are better able to sell for the best price, thus restricting demand in the private lettings sector.

- The performance of the prime London lettings market in April varies depending on the specific region. While rental values in Central London have fallen overall by 1.4% in April, the Central/South West region (including Clapham, Wandsworth, Balham and Tooting) and North West London (including Hampstead, Belsize Park and St John’s Wood) continue to see rental values rise, with both regions showing a 1.0% increase in values since March 08.

- April’s fall in rental values bucks the trend of previous months. It remains to be seen whether this decline will be sustained going forward, or whether the increasingly vulnerable sales market will drive further demand into the lettings arena over the coming months.

Read the full report HERE (*pdf)

Letting agent turns down landlords with nice rentals because they are inside a Congestion Charge zone:

Lana Kova, lettings manager at Shepherd’s Bush estate agents Tauntons, said: “Our office is based outside the congestion charge zone and unfortunately we have had to give up some of our properties inside the zone in places such as Holland Park and Bayswater. “We are a small independent estate agent and can’t afford to pay the £8 congestion charge just to show properties to customers. “It is such a shame because we have had to give up nice properties in areas that we would have liked to expand into.”

We suggest investing in alternative fuel vehicles that are exempt from paying the charge, like Toyota Prius, mopeds or others in THIS list. Also, London has a good transport system, and if you’re a small agency - by all means, use it.

The Congestion Charge seems like a menace but do you know of any other clever methods how to make Londoners think green?

Quote from ThisIsLondon.co.uk
See all other CC exempt cars

The Ombudsman for Estate Agents has published a new quarterly report on his website, and this time there is more than one lettings dispute revealed. I’ll copy the more interesting one here:

The Complainant was the Landlord who alleged that the Agent, who was under instruction as a management agent, had been grossly negligent and had mis-conducted themselves. The complainant was seeking the return of the Management fees which were in excess of £800 by way of compensation. The Complainant was living overseas and had instructed the Agent on a full management agreement.

The dispute had 5 issues:

* Part of the ceiling had fallen down in the bedroom and had
not been fixed for eight months.
* The gas certificate required, was due to be renewed on 27
January but still had not been done by 5 July
* The agent refused to release the tenants deposit even though
the tenant and landlord agreed it could be released
* The only inspection took place after the Complainant
had visited
* The Complainant was never provided with a copy of the
tenancy agreement and inventory

I concluded that the Agent did not deliver a service which was fully in accordance with the OEA Code of Practice for Residential Letting Agents’ or in accordance with what is considered best practice and I upheld the complaint. I took the view from reading the evidence, that the Agent having realised their failings sought to claim that their actions were in accordance with the Complainant’s instructions or conversely that they had no instructions to act. At no point could I see that the Agent sought to confirm existing instructions or seek further instructions from the Complainant. I awarded £500 as the Complainant had received some benefit from the Agent’s service albeit that there had been failings on their part.

The last part was very nicely put, indeed. Who was the agent, and did they learn their lesson with a £500 penalty???

Pennies!!!