Internet update

Citation

Almond, N. (2002), "Internet update", Property Management, Vol. 20 No. 5. https://doi.org/10.1108/pm.2002.11320eag.001

Internet update

So you want to be a landlord? From reading the press over the past few years it appears a high proportion of us do. A recent trip to the bookshop also confirmed this – the property section was full of texts on the buy-to-let market, as everyone seems to be trying to cash in on this boom.

Taking a look at the news section on the Investment Property Databank (IPD) Web site (www.ipdindex.co.uk) helps explain why. There, under the news section, is a press release for the new 2001 Residential Index which shows total returns from residential property in 2001 was a staggering 17.1 per cent, compared to 6.7 per cent for commercial property and –13.2 per cent for equities. Admittedly, capital growth at 10.7 per cent was the main driver, but for many individuals that does not matter.

Even now, over halfway into 2002, with the performance of equities showing dismal returns, the property market continues its relentless rise, albeit many commentators are now warning of the future sustainability of house prices, and of a possible collapse in the buy-to-let market.

It, therefore, seems odd to be talking about the market now, when most are warning about venturing into the sector. That may be so, but for the layman who wants to invest, the Internet would seem to be a useful place to look to find some information – so just what is out there for Joe Bloggs who thinks entering into the buy-to-let market is such a great thing to do?

For a start there is the Small Landlords' Association (www.landlords.org.uk). This organisation has a number of functions including the aim of promoting the private rented sector (PRS), to represent the government on views relating to the PRS and to ensure landlords are aware of their responsibilities and legislation. For non-members the site offers only a limited amount of information, which extends to a small frequently asked questions section, including whether it is best to let to housing benefit claimants to whether there is a need for special insurance.

Perhaps the most useful section is the yield calculator which can be downloaded as an excel spreadsheet. A worked example is also provided. For someone entering the sector for the first time this is a particularly useful tool. It sets out in an easy to use format the various costs associated with buying to let, from the obvious acquisition costs to the general on-going costs including insurance, redecoration, void periods and certificates for gas and electrical safety. Once all costs have been entered a yield is produced to provide a guide as to whether it is worthwhile making the acquisition. Obviously some of the costs have to be estimates and that is down to the individual, but in itemising various costs it will make many think twice about entering the sector.

For members more services are available, and these include an online newsletter, access to previous news articles, information sheets and access to a frequently asked questions database and a discussion board where members can post questions. This sounds particularly useful – although not having seen the site in full I will reserve judgement.

Another body involved in residential lettings is the Association of Residential Letting Agents (www.arla.co.uk) (ARLA). ARLA is the only professional and regulatory body concerned with residential lettings and provides some general information for both landlords and prospective tenants. As with the Small Landlords Association the site has two sections, a general area for anyone to view and a separate "members" section – as before I will only comment on the general publicly accessible area.

The site is neatly designed with links to a number of key areas from the menu on the left hand side of the screen. The key section for many will be information for landlords and tenants. For landlords the information provides people with an idea of what advice or benefits they have by using an ARLA registered agent – highlighting the benefits of advice on the latest legislation on gas, electricity and furnishings, as well as tax matters to satisfy the Inland Revenue. Landlords may also want to take a look at the information provided for tenants, if only to be aware of the questions or issues that may be faced later when letting a property out.

As mentioned above, there are a number of regulations which landlords have to obey. These include ensuring any gas appliances meet the current regulations. The Health and Safety Executive (HSE) have some really useful information on gas related issues for both landlords and tenants which is well worth viewing (www.hse.gov.uk/gas/index.htm). The best link is the "law" section as this sets out the responsibilities for various parties under the current legislation, including what a landlord must do by law and who must carry out this work. The frequently asked questions section also sets out the responsibilities on what is right and wrong. The HSE also provides a number of publications on electrical safety which may be of general interest – for further information visit www.hse.gov.uk/pubns/elecindx.htm

For regulations on furniture and furnishings it is worth visiting the Department of Trade and Industry (DTi) Web site from where you can access details of what is and is not covered by the legislation (www.dti.gov.uk/access/furniture/provided.htm). A publication is also available through searching their publications database (www.dti.gov.uk/publications). A quick search on furniture regulations on Google also produced a couple of links to local authorities and academic institutions who had some general information, although they tended to direct you to the DTi site for more detailed information.

Following the recent reorganisation within the Government, the Office of the Deputy Prime Minister is now responsible for housing issues and provides a variety of information on its Web site – the following link should take you directly to the index of information – www.housing.odpm.gov.uk/order/hp07.htm This is a particularly useful site to visit for those initially thinking of entering into the buy-to-let market, with publications covering the types of tenancies and responsibilities, including a leaflet on repairing obligations – a useful leaflet which I guess many ignore based on past experience in renting as a student! For more market based data and commentary the RICS (www.rics.org.uk ) is worth a visit for its Residential Lettings Survey, or try the Council for Mortgage Lenders (www.cml.org.uk) for general lending information.

Finally, there is the important issue of taxation – something many would like to forget. For those wishing to find out more the best advice is to visit the Inland Revenue site (www.inlandrevenue.gov.uk). Here you will find the relevant information leaflets you require, including a full 145 page publication on the taxation of rents (direct link – www.inlandrevenue.gov.uk/pdfs/ir150.pdf) – happy reading!

Nigel AlmondSenior ResearcherJones Lang LaSalleNigel.Almond@eu.joneslanglasalle.com