Category: Let Guides

Fire safety and landlord safety in HMO properties

fire protection advice for HMO properties

Research has shown that the risk of death from fire in some types of HMO is greater than in single occupancy properties, highlighting the need for adequate fire precautions. ENTEC Limited gathered statistics which show that in houses that are converted into bedsits the risk of death from fire is 1 in 50,000 and in bedsit houses that have three or more storeys this risk jumps to 1 in 18,600. These risks are six times and sixteen times higher than the risk of death from fire in a single occupancy dwelling respectively.

Under the Housing Act 2004 there are no set standards for fire safety as each residence may be unique and pose different risks. Fire precautions are used to stop smoke and fire from spreading in order that the residents have a better chance of escape. These precautions include a protected route (the means of escape in the event of fire), fire separation, fire doors, automatic fire detection, emergency lighting, firefighting equipment and fire safety compliant furniture. Each of these precautions must be considered for HMO’s but note that the precautions used can be dependent on the risk of the property.

Fire Safety and Landlord Safety precautions

PROTECTED ROUTE: This covers the exit from the building in the event of a fire and should always be kept clear to allow easy access to safety. All final exit doors should be able to be opened without a key. The doors, walls, floors and ceilings of the escape route should be made to resist the passage of smoke and fire for half an hour, and any electric or gas meter boxes should be encased in material to resist fire for at least half an hour as well. Any cracks, holes or damage to the plaster in the walls or ceilings of the escape route need to be repaired using material to give the required standard. Certain items should not be allowed in the stairways, such as portable heaters, heaters with naked flames or with bars, fixed heaters with gas canisters, upholstered furniture, storage furniture, coat racks and cooking appliances.

FIRE SEPARATION: All lettings in HMO’s should be separated from one another as well as from the protected route using half hour fire resistance for the walls, floors and ceilings. In HMO’s that have commercial premises attached a one hour fire resistant separation is needed.

FIRE DOORS: Fire doors are needed in high risk HMO’s to prevent the spread of fire onto the protected route. Each letting room and any other rooms opening onto the protected route should be fitted with a fire door which needs to meet certain standards. Fire doors should be half hour fire resistant and must be able to be opened from the inside without the use of a key. They must also be self-closing and fitted with a minimum of three hinges that are made to withstand temperatures of more than 800 degrees centigrade. The gap between the door and the door frame may not be more than 3mm and 8mm underneath the door. Fire doors must never be wedged open.

AUTOMATIC FIRE DETECTION: In large HMO’s (three storeys or more) a full fire alarm system should be installed with a central control panel. Heat detectors should be provided in all kitchens and rooms with cooking facilities, whilst smoke detectors should be provided in all hallways, landings, living rooms and bedrooms. In smaller HMO’s

(two storeys) smoke detectors/alarms should be installed in the hallways, landing and bedrooms and a heat detector should be installed in the kitchen. All heat and smoke detectors should be wired to the mains with a battery back-up. Fire detection alarms must be maintained and checked regularly.

EMERGENCY LIGHTING: Emergency lighting with a battery back-up if the mains electric supply fails is required in HMO’s of three or more storeys. This provides adequate lighting for the occupants to be able to see the escape route from the building. It must be maintained and kept in good working order, and inspected regularly.

FIRE FIGHTING EQUIPMENT: Fire extinguishers are needed so that small fires may be put out and also so that the escape route may be kept passable in the event of a larger fire. Instructions to tenants must be given on the correct way to use the fire extinguishers. Fire extinguishers should be placed on brackets that are about 1 metre from the floor and must comply with BS EN3 and be kept in good working order and serviced once a year. A multi-purpose extinguisher should be placed on each floor in the communal hallway. In a kitchen a carbon dioxide or a dry powder extinguisher should be provided. A fire blanket conforming to standard BS 6575 should be provided in a shared kitchen.

FIRE SAFETY COMPLIANT FURNITURE/FURNISHINGS: Any furniture or furnishings provided must comply with the Furniture and Furnishings Amendment Regulations 1993. This includes upholstered furniture, mattresses, cushions, pillows, seat pads and any upholstered garden furniture.

If you a require a HMO insurance quotation, call Highhouse insurance today and we will be pleased to assist.

How to find tenants

Landlord handing keys to tenant with documents
Choosing the right tenants

So you have purchased your property with intention of letting, or you may already have a property and made the decision that renting out the place would suit your circumstances. Either way when you are ready to let your property the next step is to look at how to find tenants and more important, the right ones.

How to find tenants

There are a number of different things you can do to you find the right tenants and hopefully minimise any problems you may face in the future.

Do it alone or get an agent

If you are ready to let your property then you have or should have at least thought about how involved with the actual tenanting you want to be. It is worth looking into what local letting agents offer, most agents offer different levels of service from just helping you to find a tenant to taking care of everything including property maintenance and dealing with rent arrears. Naturally there is a charge and the more involved a letting agent is the more they will cost.
Being a landlord comes with responsibility including compliance with legislation. Its not impossible to go it alone and there is nothing with regards to letting a property that a landlord cant do solely. There is enough resource material available in handbook form and online to outline everything involved with being a landlord but this requires studying research and keeping up to date with. You also have to ask yourself how involved physically do you want to be? Are you prepared to be woken up in the night to deal with emergencies?
Find the happy medium for your circumstances, remembering that a letting agent can take on a lot of the responsibility but at the same time they can greatly affect your bottom line.

Checking References

References are often overlooked by landlords but are a very good first base filter for finding the right tenants. These days there are quite strict referencing procedures in place to protect landlords, which can arguably prove to be a bit of a headache for tenants. Following up references by contacting the tenants employer, previous landlord or using a specialist referencing company will help you paint a better picture of the kind of tenants you could have. Be wary of some references, many landlord forums are filled with comments by landlords claiming that previous landlords have given a good reference in order to get rid of tenants and although we have little evidence of this the fact that this comes up quite a lot in landlord forums certainly raises an eyebrow.

Find the right tenants by credit checking

Doing a credit check is more for peace of mind and down to the individual landlord and the nature of the tenancy. For example you may feel more compelled to do a credit check if renting out the full property but may not if the house is in multiple occupancy.
Naturally the more transparent a potential tenant is willing to be the more at ease a landlord will feel. It is important to know a tenants financial situation, what is their main source of income? How secure is their job and how reliable do you feel they will be at paying rent?
Credit checks provide a good financial history of the tenant based on records, it does not prove that a tenant is always going to be able to pay even if they have an excellent rating and a bad history does not mean they can’t pay. Some people have just gone through a bad period in their life and can still be made to pay for it many years on. Trust your gut instinct and how you feel about the tenant, they may pass credit checks and references with flying colours but what insight can you gain from a face to face meeting and would you be happy to deal with them.

Documentation

One of the best ways of protecting yourself and being able to deal with any problems is to document certain parts of the let. A tenancy agreement may be written or can be oral and having a hard print version provides more protection for both you and the tenant. It can give you and the tenant subject to the agreement more than your statutory rights but cannot give you less than your statutory rights.
When obtaining a tenancy agreement we advise you use a reputable source and avoid the free tenancy templates available online. Agreements drawn up by Solicitors or tenancy agreements endorsed by the National landlords Association (NLA) will offer a more trusted resource.
It is worth while, especially if the property is furnished, to create an inventory that lists all the furnishings, fixtures and fittings accompanied by a description of condition including any marks and where possible supported by dated pictures.
The tenancy deposit protection (TDP) scheme that came into force in 2007 is a government backed scheme setup to protect tenants. It ensures tenants get their deposit back if they meet the terms of the tenancy agreement, pay the rent and bills and don’t damage the property.
Having an accurate inventory is therefore very important as it could be key in proving that items have been damaged or are missing or better still prevent such cases from arising in the first place.

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Letting to Students

A guide to landlords looking at letting to students
Letting to Students

Letting to students

Letting to students is slightly different from a legal perspective than renting to other types of tenants such as families or professional working couples. If the house has 3 or more tenants forming more than 1 household (a household represents 1 or more members of the same family who live together) and these tenants share bathroom and kitchen facilities then the house is classed as a house of multiple occupancy or HMO for short.

Accommodation for students

Each year the influx of students to a region where there is a university provides a real boost to the local economy and generally speaking will keep businesses that earn their trade through students in good stead for the long term supplying steady demand, subject to competition of course. The demand for houses near a University or academic institute is usually high with existing student landlords, keen parents wanting to buy their children a student house and other potential landlords wanting to give student letting a go means that properties are don’t stay on the market for long.

The closer to an academic institute the property is the more expensive the property tends to be on a like for like basis. Of course properties near student bars and clubs will be popular as well and worth looking into.

Generally speaking the student letting market has been stronger these last few years compared to other areas of the residential investment market especially in cities like London.

The demand from students for accommodation isn’t necessarily greater than the supply of accommodation available everywhere though and Leeds Unipol believed that in 2012 there would be a surplus of approximately 3,800 bed spaces leaving many landlords with unfilled rooms or worse untenanted properties.

Universities themselves compete strongly in the student accommodation market and are constantly building new purpose built student blocks. Each time a block or group of blocks is completed their share in the market can increase by several hundred students and put a squeeze on the private rental sector for student accommodation.

Rolle College in Exmouth, Devon is a good example of where a University can remove a market in one swoop. The college use to be a teacher training college and was part of Plymouth University. In 2009 the University relocated the campus with some 3000 students and 400 staff to its main campus which is over 40 miles away and the consequences had both economic and social implications in Exmouth. Many of the student accommodation properties have since been rented out to other individuals or rented out fully but the student letting market ceased.

When looking for properties with the intention of letting to students it is worth spending a bit of time researching the current market for a target area and any future developments. The University website will usually have a section on accommodation and future developments which might be able to provide some invaluable information and local estate agents should be able to provide good advice but getting the advice from several estate agents will allow you to cross reference and paint a clearer picture. We should also point out that you will require HMO Landlord Insurance, a unique insurance specifically underwritten for student property lets and we recommend you also take into account insurance factors such as flood risk, crime rates or any history of subsidence when choosing a buy to let.

What facilities should be provided when letting to students

It’s difficult to give advice on what facilities should be provided that goes into enough depth covering what students require and the regulations and standards that need to be met by law. The best advice is to go online and look up the university or academic institute website and read through the pages on accommodation.

Many universities work with their local council and student guilds to offer accreditation schemes. These schemes aim to recognise a set of standards outlining key Landlord responsibilities offering students protection and Landlords clear guidance.
The relevant local council website should provide information on what they expect from landlords and legal requirements and be a good resource for contact numbers and further avenues.

It is also important to not just set out a student let that complies with laws and regulations but it should be designed with students in mind. The more attractive and accommodating to students the property is the easier it will be to let.

Students normally pack light so the property should be furnished, not extravagant but suitable for students to quickly settle in. Rooms should be equipped with a bed, wardrobe and desk. If the rooms are on several floors or the property has quite a few rooms then more than one bathroom should probably be provided if possible. Kitchen appliances are likely to get heavy use so cutting corners to save money using cheaper appliances could end up costing more in the long run. Are the fridges/ freezers big enough for the number of student tenants in the property?

What else are you going to offer student? are all bills inclusive of rent? Are you going to offer a wifi connection? (really is a must these days) Do you want to provide direct contact details?

For all the information available on HMO’s, regulations and practices there is an equal amount of resource provided to students offering advice on what to look for when searching for a student accommodation (NUS and university websites provide such information) and it is worth cross referencing to so that you can meet all regulations and legal regulations as well get a good idea of what students are looking for.

Letting a Property

Weighing up whether renting out a property offers a worthwhile return in investment
Is letting a property a worthwhile investment?

Letting a property can be a great investment but like all investments a fair bit of groundwork should be undertaken first before choosing a property. Of course this may not always be possible if you already own the property but this guide is for those who are actively seeking to buy with intentions of letting.
The saying fail to plan, plan to fail, although not strictly true for renting property given that many potential landlords have successfully purchased a property without doing prior research or even looking at the property first it is worth remembering that buying a property to let is an investment and a large investment at that, where a bit of groundwork can really help you avoid the pitfalls and maximise the potential return.

Is investing in property worth it?

Before purchasing a property it is worth considering alternative forms of investment and ultimately the return on investment you are likely to receive for any investment period. Many people look at buying properties when rates are low and the stock market is volatile but when you buy a property you are effectively tying up capital and the property could drop in value in the future. If there is another interested party i.e. a bank or building society their interest rates will change at some point and as others have found out in the past high mortgage rates on large loans can eventually outweigh the benefits of making the investment in the first place.
Alternative savings accounts, although offer very little return during periods of low rates at least they do still offer a return and there are many tax free savings options available on the market today which involve next to no effort compared to that of becoming a landlord.

Where are you willing to buy a property?

When deciding on whether you want to buy a property to rent there are a lot of variables that come into play like a jigsaw and by answering certain questions you will have a clearer picture of what is right for you.
How far are you willing to travel? If you plan to be a hands on landlord and deal directly with the tenants and any problems that may arise then how far do you want to be from the property. Once you know the demographic area you can then focus on the local property market for that region. Bringing in a letting agency to manage the property will allow you to widen your target area and they will be able to deal with matching up suitable tenants, handle any problems such as the boiler breaking down and some will be able to manage all aspects of letting a property. However as with all expertise and services they will charge and this will need to be accounted for when costing the investment.
Depending on an agencies involvement they could just be responsible for finding suitable tenants and collecting the rent but you still carry the responsibility for maintenance or resolving problems such as sourcing a plumber or electrician.
Property value is often affected by desirability at that point in time. Cheaper properties are normally located in less desirable areas but that’s not to say that it will stay less desirable. The villages where once younger generations could not wait to leave and head for the city are now seen as highly desirable and preferred by the same younger generation as an ideal place to raise a family away from pollution, traffic and other factors associated with living in a city.
If possible try to gain knowledge of the area and of any future developments, remember that some developments can have a positive impact on an area such as a new school or bypass and some can have a negative impact such as becoming a flood risk area. There are also factors that can affect the value of an individual property such as new buildings or homes being built in surrounding land which as a consequence affect the view or appeal or a property.
It is worth visiting several different estate agents as they should be able to tell you which areas are the most desirable and some have a database of tenants waiting to rent. You may be able to target specific areas or even streets that look to offer real value as a rental property, maximising your potential return.

The kind of tenants you want could impact the kind of property you buy

If your thinking of becoming a landlord then you may have already thought about the kind of tenants you would like. Obviously the location and size of the property are things that factor in to the attractiveness for potential tenants. What is access to local schools like? which are the best schools in the area? How near are public transport facilities? How far are you from main roads and motorways? What are the Crime rates like? If your targeting professional working couples or families think about their needs and which areas would suit them the most, if you are targeting students, how far are you from their college or university and which areas have public transport routes that run directly or near to their academic institute.
Different types of tenants may also have different requirements besides just location and local facilities. For example students may require a fully furnished property that they can move straight into and be setup ready to pursue their academic studies the following day bringing with them just a suitcase of personal possessions to make their temporary accommodation a home from home. Families or couples may have a lot of their own furniture and require an unfurnished property. They may also be looking for a long term rental agreement.

Other factors to consider

There are lots of things to factor in to determine whether an investment is likely to be profitable, some can be determined early on such as fixed rate mortgage repayments, landlord insurance and to some extent the cost of renovating a property to the standard you require for letting. There are however other factors to consider such as what if the property remains empty for a month or two, do you have a financial buffer to cover these circumstances.
Rental income is taxable and it is advisable to see a tax advisor to see how this affects your circumstances especially if you have other sources of income. Some costs can be put forward as expenses to offset against this including the tax advisors fees.
There may be times especially during a recession where tenants struggle to pay the rent, how understanding can you afford to be? Many insurance companies now offer rent guarantee insurance to protect you against tenants who fail to pay.
You may be lucky enough to know other people who rent out properties, what are their experiences both good and bad, what advice can they give you, the more people you know and can get advise from the better prepared you will be and determine whether being a landlord is right for you or not.

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What does landlord Insurance Cover

Keys next to signature signing
A guide for landlords

What is Landlord Insurance Cover

When letting a property there are slightly different risks an insurer needs to take into account and therefore, have produced a different insurance for rented property known commonly as Buy to Let Landlord Insurance. So what does landlord insurance cover? well in practice a buy to let landlord insurance policy is very similar to a standard household policy, the buildings are still covered against standard perils, you can still get contents insurance to cover furnishings as well as accidental damage and many of the wordings in the policy booklets will be the same.
There is however a few differences and these will be highlighted throughout this guide. The main difference is that the property is not owner occupied and is tenanted through which you are earning an income. Standard house hold properties are not written and rated to cater for this (letting a room out is different and normally catered for in a standard household policy). It should also include Landlords Legal Liability insurance to provide protection for Landlords as Property Owners for injury or damage to others including tenants as residents in the property.

What does landlord insurance cover

Single policies for property portfolios
An advantage to landlords who own more than one buy to let property is that many insurers now offer multi-property policies, which can combine their portfolio or properties onto just one insurance schedule (each property will usually have its own buildings sum insured and contents sum insured) and will have just one renewal date. Discounts are usually available as its not only keeps things simple for the landlord but also the insurer as there is less administration and therefore cost involved.

Landlords insurance cover for Contents
What is considered contents is usually slightly different than for a standard household policy. As the policy will only cover the contents that the Landlord has provided for the use of the tenant. For example carpets, White Kitchen goods and communal contents in hallways and vestibules. Contents are not normally covered in outbuildings and garages unless specifically requested. It is also worth remembering that landlords contents will only cover items and furnishings owned by the landlord and not any contents owned by the tenants, who will have to arrange their own contents insurance.

Loss of Rent Cover
A standard cover found in rented property insurance is ‘Loss of Rent’. This is very important and given that it is standard in most landlords policies these days you should not take out a policy that does not include this. Loss of rent covers landlords against expenses they incur should their property let become uninhabitable leading to finding and paying for alternative accommodation as well as any actual loss of rent itself during the period that the property is uninhabitable following the occurrence of an insured peril. Loss of rent is usually set as a percentage of the sum insured.

Rent Guarantee
Rent Guarantee Insurance will cover you against your tenant defaulting or failing to pay the rent. It isn’t normally standard on landlords insurance but may be available as a bolt on or as a separate insurance policy.

Should you require  let property insurance  then please consider Highhouse Insurance for a quote. We can provide you with a Let insurance policy covering most tenancy arrangements including HMO for all the usual perils that you and your lender will require. Our own Let policy is underwritten at Lloyds of London and we will be pleased to provide you with a free quotation.