Landlords buying property: 5 red flags for 2022
After a tumultuous few years, it’s great to read that landlord confidence is at a five-year high. A positive attitude when it comes to rental yield, capital gains, the private rented sector and the wider UK financial market was reported in a survey by BVA BDRC and Paragon Bank.
The results found that more than three quarters of respondents (78%) who said they planned to expand their letting business also reported positive expectations. Expanding property investment portfolios is a trend being noticed elsewhere too. New research by Shawbrook Bank found that a third (34%) of landlords are looking to grow their portfolios in the next 12 months.
With a forecast of increased buy-to-let purchasing activity ahead, now is a good time to remind landlords of what to look for when buying an investment property to rent out. Of course, there will always be the obvious – signs of subsidence and dilapidation – but there are some new warning signals to consider, especially in light of recent and forthcoming legislation. Here are 5 red flags landlords should look out for in 2022:
1. Gas and oil-fired boilers: the sale of conventional gas and oil-fired boilers will be banned in 2035, so landlords need to be thinking ahead in regards to the central heating in any property they buy. It may be difficult to find a property for sale with a heat pump already installed, although new build apartment blocks may utilise heat pump technology and this gives these purchases a degree of futureproofing. Second best is to purchase a dwelling where the boiler is newly installed, which offers longevity that may outlast the 2035 deadline, or budget to install a new gas boiler before they’re banned from sale.
2. Poor energy efficiency: when it comes to new eco standards, installing a heat pump and buying a property with an E-rated EPC may not be good enough in the lettings industry, so landlords should be careful when choosing which property to invest in next. The Government wants to further raise MEES (Minimum Energy Efficiency Standards) in the private rented sector and soon. It is aiming for a deadline of 2028 for when all rented properties need to have an EPC rating of C as a minimum, rising to a B from 2030. Properties with a current E rating may need significant investment in the near future to make them energy compliant, which landlords should bear in mind.
3. Odd smells: when viewing a property, an unusual aroma can be a sign of trouble and there are a variety of causes. One of the most common are whiffs of dampness, which can indicate rising damp, poor ventilation and leaks, both inside and out. Foul-smelling odours can indicate blocked sinks, broken WCs and poor drainage, while some illegal activities create an unmistakable scent, connected to either smoking or growing cannabis. If there’s even the faintest smell of gas, report the issue immediately as there could be a deadly leak from an appliance or a dangerous build-up of methane.
4. Bad press: many landlords buy outside of their local area in a bid to achieve the best yield but purchasing in unfamiliar areas can leave property investors open to risk. An estate agent’s particulars will gloss over a neighbourhood’s more unsavoury aspects but a quick Google and search on social media will paint a truer picture. If the area you’re considering repeatedly crops up in terms of crime and anti-social antics, you may want to reconsider a purchase.
5. Leasehold properties: it’s true that the Government is looking to abolish leasehold laws and, in the future, property owners should be able to extend their leases by 990 years. There is, however, no firm date for this change in legislation and landlords still need to pay attention to how long is left on any leasehold property they may wish to purchase. It’s also wise to check the small print regarding any service charges and ground rents, noting if these fees are permitted to double year-on-year.
Viewber understands that the research and viewing stages of property investment are the most crucial, especially of at a distance, therefore our services can be invaluable in the decision-making process. Our property visits are impartial and we can file an accurate and unbiased report on the condition of any property you are interested in.
As well as a thorough, visual inspection verified by photographs and videos, a Viewber will note down anything more unusual, such as strange smells, communal facilities that fall short (perhaps a broken lift) and potentially malicious damage – especially when visiting blocks of flats with shared areas.
A Viewber also offers an extra advantage in that they will be local to the property they are inspecting, with detailed insider knowledge of the area. They will provide a fair and objective assessment of the neighbourhood that will, most likely, be more honest and transparent than the one supplied by an estate agent.
If you are one of the thousands of landlords planning to grow your property investment portfolio in 2022, send a Viewber to inspect a property on your behalf. There is no minimum booking requirement and we serve the entire country. Start by contacting the Viewber team today.