To promote and protect private residential landlords Challenges & Opportunities for the PRS in 2015 Steve Simpson NLA

To promote and protect private residential landlords Agenda Introduction National Landlords Association (NLA) Landlord update PRS and The Election…. The Opportunity Risks and Challenges Looking forward Questions

To promote and protect private residential landlords Introduction - Me Steve Simpson One of 36 Local Representatives across the U K Local Representative, NLA, North East, Part Time Run local branch meetings in Middlesbrough, Durham & Darlington Joint meetings with Local Authorities & others Work with Sunderland, Durham, Darlington, Hartlepool, Middlesbrough, Stockton & Redcar Councils Landlord in Chester le Street & Carlisle for 20 years Worked with finance and mortgages for over 35 years Retired from Financial Services in January 2014

To promote and protect private residential landlords Introduction - NLA Largest Landlord Association in the U K Different membership packages 55,000+ members and associates To support, protect and improve the PRS Work closely with National and Local government A range of services and discounts through NLA services and approved suppliers Landlord accreditation scheme

To promote and protect private residential landlords Why join the NLA ? Benefit from access to our Telephone Advice Line advisors for immediate issues Our 24/7 Online Library provides you with up-to-date information, practical advice and legislative updates on more than 70 subjects

To promote and protect private residential landlords Members Advice Line Manned by other Landlords with variety of expertise 38,000 plus calls per annum and increasing… 70%+ of calls related to tenants, rent arrears & regaining possession Also – HMOs, Council Tax, Housing Benefit And any other issue you can think of… Will always recommend an approved supplier where appropriate

To promote and protect private residential landlords Current Issues Facing Landlords Selective Licencing Regulation Universal Credit and Welfare Reform Cap on housing benefits De-regulation Bill Smoke/ Carbon monoxide Alarms Changes to possession procedures, sections 8 & 13 Immigration checks The tax man….. Increase in reports of property damage Increase in new/amateur Landlords

To promote and protect private residential landlords The PRS Picture – Nationally 22% - Of the overall housing market 63% - Positive about own rental business 53% - Positive about the PRS sector 35% - Suffered rent arrears in the last 12 months 29% - Property with a void period more than 3 months 38% - Increased tenant demand in the last year 5.7% - average yield

To promote and protect private residential landlords The PRS Picture – Locally 14% - Of the overall housing market (22%) 49% - Positive about own rental business (63%) 33% - Positive about the PRS sector (53%) 55% - Suffered rent arrears in the last 12 months (35%) 57% - Property with a void period more than 3 months (29%) 21% - Increased tenant demand in the last year (38%) 6.6% - average yield (5.7%)

To promote and protect private residential landlords PRS and The Election Result No real change……. Housing was a key election issue, including PRS Result mainly good news for the PRS – more relaxed attitude to renting Already a surge (South East) in overseas investment into housing Interest rates now more likely to slowly move upwards Continued welfare reform & benefit cuts

To promote and protect private residential landlords Why Do People Become Landlords… 39% - Additional Monthly Income 30% - To Supplement Pension 28% - Better Investment Return 27% - Main Source of Income for the Future 23% - Build an Inheritance for Family 21% - Develop Properties and Add Value 12% - By Chance – Inherited Property 6% - Acquired Additional Property when met Partner 6% - Had Problems Selling Current Property Pension Regulation Changes ?

To promote and protect private residential landlords The Opportunity We are in a growth industry Housing – continued increasing demand Little growth in social housing Need for 250,000 new houses per annum At best, 175,000 new houses will be built Tighter qualifying criteria on residential mortgages Expected grow in the private rented sector

To promote and protect private residential landlords Opportunity – North East Demand for rented property continues to increase PRS accounts for 1 in 7 homes in the North East Has nearly doubled in the last 10 years Market research is vitally important Property prices generally remain subdued across our region There is good rental and investment opportunities to be found

To promote and protect private residential landlords Renting property is a business My House Your Home

To promote and protect private residential landlords Renting property is a business… Only 48% of Landlords consider their property lets as ‘a business’ We are providing a home in exchange for rent Why are you a Landlord? Make sure you keep records and set a budget Regular inspections and contact with tenants is vital Referencing is also key to securing good tenants Set rents correctly and review each year Is a good tenant paying a lower rent better than a bad tenant? Think about future plans

To promote and protect private residential landlords The Risks…. There are over 70 pieces of legislation that affect the PRS Selecting the wrong property – do your homework Picking the wrong tenant – referencing is important Mark sure your property is ‘legal’ to rent out Gas safety/EPC/Electrical Safety etc. Ensure you use the correct forms and secure the deposit correctly Make regular inspections to your property Carry out a fully inventory – photos/video Tenants stop paying their rent… Cutting corners…

To promote and protect private residential landlords The Challenges…. Not to treat renting as a business Finding the deposit (20 to 25%) to purchase or expand portfolio A poor personal credit rating Securing funding for new property Personal Income Level Minimum Purchase Prices Exposure Limited Company HMO Uninhabitable Property Tenant Types

To promote and protect private residential landlords Moving Forward Private rented sector will continue to grow and presents a good investment opportunity in most cases Do your homework and research Ensure you have good support from other Landlords, local authority, NLA Watch out for market changes and legislation The PRS is a ‘business’ and run yours accordingly

To promote and protect private residential landlords Questions Steve Simpson, NLA Tel: –