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Top Tips for Managing Joint Tenancies

When they run smoothly, joint tenancies can be a good source of income for landlords. This three-minute read explains how to get the best out of them.

Joint tenancies are a great way for friends or couples to live together and share the rental burden. (Think about best buddies and flatmates Joey and Chandler in Friends, they had a ball,right?)

And joint tenancies can also be good news for landlords, providing steady long-term income and low tenant turnover. (If your tenants are happy and get along like Joey and Chandler, they’ll stay for years.)

But sometimes, the relationship between tenants turns sour and things can get complicated. Before we look at managing tenant relationships, here’s a quick recap on joint tenancies.

  • As a general rule*, all tenants in a joint tenancy are liable for the rent. This means that if one tenant falls into arrears, the landlord can ask any or all the other tenants to cover the shortfall. 
  • The same goes for damage to the property – all tenants are liable. Even if only one tenant (or their guest) caused the damage, any or all tenants could be required to pay for the repairs.

  • One person can’t pull the plug on a joint tenancy; the landlord and all tenants must agree to end the tenancy. 
  • If end-of-tenancy deductions are agreed upon, they’re taken from the overall deposit.

Getting the best out of a joint tenancy

  • Never rely on one tenant to share important information with other tenants for you (they may fail to do so or may get it wrong). 
  • If there’s an issue with arrears, notify all the tenants and explain that they’re all liable. Tenants who have paid their share of the rent can be valuable allies and help persuade the tenant who is behind to get back on track.

  • Remain professional and don’t get caught up in a melodrama between friends or lovers who have fallen out (they may want you to take sides). Remind all parties of their joint liability and encourage them to sort it out amongst themselves. 

  • Always notify people who sign up to be the sole guarantor on a joint tenancy that they’re liable for all rent and damages. Often a parent thinks they’re just covering their own child – not all the tenants.

To find out how Nest in Essex can help manage your property and avoid tenancy troubles, get in touch.

*Always check the terms of your rental agreement and, if in doubt, seek expert advice.

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The Bank of Mum and Dad Comes to the Rescue

This two-minute read looks at parents’ integral role in helping young people get on the property ladder.

There’s one financial institution that never seems to go out of fashion, and that’s the dear old Bank of Mum and Dad (or BOMAD for people who like acronyms).

About half of all first-time buyers (FTBs) last year relied on BOMAD, with parents dishing out a record £9.8 billion to help their offspring get on the property ladder.1 The average contribution was £58,000. 

And in the past ten years, BOMAD has coughed up £54 billion, assisting 1.4 million buyers.2

What’s driving the trend? 

There’s certainly been a lot of talk lately about millennials and their spending habits.

TV property presenter Kirstie Allsopp sparked debate with her suggestion that young people ditch their gym memberships and Netflix subscriptions if they want to become property owners. (Ironically, Kirstie received a helping hand from BOMAD when she bought her first flat in 1996.)

Twitterstorms aside, there’s no doubt that wage rises have not kept pace with property prices over the years. 

The average house in the UK now costs more than eight times average earnings. In the mid-1990s, house prices were around four times average earnings.3

FTBs are also getting older. These days, the average FTB is 31. A decade ago, it was 29.4

Other influencing factors

Things were particularly tough for FTBs during the early days of the pandemic because of changes to mortgage availability. 

Most lenders withdrew their 95% loan-to-value products, heightening the need to call on BOMAD for help getting the deposit together.

However, the situation has since eased, and many 95% loan-to-value deals have been reintroduced. 

This news has been tempered by rising gas prices, interest rates, and inflation, so it’s swings and roundabouts for FTBs.

How do they find the money?

While some parents draw on existing savings, a growing number are downsizing and releasing some equity to their children in the process.

Rather than bequeathing all their wealth, many parents are deciding to share some funds sooner rather than later.

For up-to-the-minute news on the property market in, contact us here at Nest in Essex

1 Source: Savills

2 Source: Savills

3 Source: Schroders/Bank of England, 2020

4 Source: Halifax Bank, 2021

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A Guide to Reference Checks for Landlords

Don’t make the rookie mistake of cutting corners with reference checks – it’s a sure-fire way to wind up with a nightmare tenant. A three-minute read.

When it comes to tenant selection, there’s a saying that all landlords should heed: Go with the right tenant, not the first tenant.

Sometimes, landlords are so eager to see rent payments rolling in that they treat the reference checking process as a tick-box exercise rather than an investigative one.

But rushing to greenlight the first person willing to take your property can come back to haunt you.

What do reference checks involve?

It’s a complex process (for a full list get in touch with us here at Nest in Essex), but key aspects include:

  • ID checks (to make sure the candidate is who they say they are)
  • Credit history
  • References from previous landlords and current employer

Credit checks

County court judgments and unpaid debts are obvious red flags, but it’s important to delve deeper than that. You need to review a candidate’s full credit report and get a clear overview of their financial commitments and history.

What kind of outgoings do they have regarding credit cards, loans, and bills? It may be that technically the candidate can afford the rent, but with their other debt repayments, it would be a serious squeeze.

Also, examine their track record when it comes to paying bills. A history of late payments suggests that they’re disorganised with their finances – bad news if you want the rent paid on time.

Landlord references

References from a candidate’s previous landlords are useful – up to a point. We know of cases where a landlord has written a troublesome tenant a good reference just to get shot of them (not ethical, but it happens).

If you have doubts about a candidate’s suitability, don’t let a positive landlord reference be the deciding factor in giving them a property.

Employer references

It’s important to check a candidate’s salary with their employer, but don’t take a company email at face value (sometimes people get a ‘mate’ in HR to inflate their earnings).

Ask to see payslips and bank statements and ring the employer yourself to verify the accuracy of the email’s contents.

Top tip

Gambling on a risky tenant can turn out to be a costly decision – so invest time and energy in the tenant referencing process.

Get a good letting agent on board if you’d like an expert to handle it for you.

Contact us here at Nest in Essex to learn about our property management services.

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Two Property Trends That Sellers Need to Know about

This three-minute read looks at the current market trends and what they mean for people who are looking to sell up.

Are you thinking of selling your home? Then let’s look at two trends that have dominated the market over the past year and see what they mean for you. 

Demand is strong

Many people predicted that the robust demand seen in early 2021 would fizzle out when the Stamp Duty holiday ended – but they were wrong! 

2022 kicked off with a bang. Over the New Year period, UK housing demand rose by 49% compared to the same period in the previous three years* and asking prices were up in January.

Pressure on stock

Running parallel to this strong demand has been a shortage in housing stock (in other words, there are not enough properties on the market to meet buyer demand).

In December 2021, there were 24 buyers for every available property.** One of the reasons for this pressure on stock is that people are staying put in properties for longer. We assume society is more transient these days, but housing sales figures don’t bear this out.

In 2008, people who sold their home had, on average, owned it for ten years. By 2021, that figure had jumped to 14 years.***

Many people appear to be opting to extend an existing property instead of trading upwards, which partly explains this trend.

Implications for sellers

With demand high and stock levels low, sellers are in the driver’s seat. However, if you’re planning to sell and then buy another property, it’s not quite so simple.

While you’ll be in a prime position to sell your current home, you’ll need a clear plan of action to secure your next property.

Many people start by looking for a suitable property to purchase before preparing their own home for sale. But given the market is so competitive right now, it’s worth doing things the other way round and getting your property on the market first.

That way, when you do find your dream home, you can move quickly. Sellers are much more likely to look favourably on your offer if you can show you’re ready to go (they won’t want to wait around for you to get your act together).

You don’t want to be outmanoeuvred by someone who can move more quickly than you.

For more information about the property market, get in touch with us here at Nest in Essex

* Source: Zoopla. This period takes in four weeks leading up to 16 January 2022.

** Source: Propertymark.

***Source: Savills.

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Repairs and Maintenance – What Are a Landlord’s Responsibilities?

This two-minute read details a five-point plan to help landlords manage their maintenance responsibilities. 

There’s no quick fix when it comes to maintenance and repairs; to avoid stressful and costly tenant disputes, landlords need to be organised and proactive.

Who is responsible for what?

Always check your contract, but as a general rule, landlords are responsible for structural features like walls and chimneys, along with windows, drains, stairs, toilets, showers, pipework, the boiler, and electrics. 

If the property has a garden, the landlord is responsible for things like lopping tree branches and repairing fences.

But it’s a two-way street, and tenants have responsibilities, too. They must keep the property in good condition and repair any damage they cause. (If, for example, they make a hole in a wall, it’s up to them to fix it.)

Crucially, tenants also must notify the landlord if there’s a problem.

Five tips for managing repairs and maintenance

  1. Be clear about responsibilities

It’s best if both parties understand their responsibilities from the outset – and that these are clearly outlined in writing.

  • Fix problems promptly

Don’t drag your heels when a tenant raises an issue, as this will only breed animosity. Being a landlord is a round-the-clock job – be prepared for a call at any time of day or night (unless you have a letting agent managing the property).

  • Good communication

It’s amazing how much goodwill you can generate by being professional and polite. Check in with your tenant regularly and keep them updated about any repair works.

  • Regular inspections

With regular inspections, you can spot minor issues and address them before they become major repair jobs. Also, a tenant is more likely to look after your property if they know you’re a hands-on property manager (or if your letting agent is on the ball).

  • Have a maintenance plan

As a landlord, you have a duty of care to ensure the property is safe – failure to do so could land you in court and invalidate your insurance. Have a clear maintenance plan and arrange mandatory electrical and boiler checks on time.

Bonus tip

Entrust the management of your property to a letting agent so you can focus on your work and family commitments and enjoy peace of mind, 365 days of the year.

Get in touch with us here at Nest in Essex to learn more about our property management services.

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What’s a Green Mortgage and How Do You Get One

If you’re taking out a new mortgage or about to refinance your property, have you considered a green mortgage? No? Never heard of it? Well, that’s what we’re here for.

A green mortgage is not actually new. In fact, the concept was first launched about 30 years ago but wasn’t used much. However, in the last few years, green mortgages have been gaining momentum, and are being offered by more and more high-street lenders.

What is it?

It’s basically a mortgage that rewards energy efficiency. Borrowers buying energy-savvy new-build properties or undertaking green improvements are offered better rates by their lenders.

A green mortgage works in the same way as a standard mortgage, but it’s cheaper. Borrowers are incentivised for being more energy efficient and are encouraged to reduce their overall energy usage.

Am I eligible?

Most lenders require a property to have an Energy Performance Certificate (EPC) rating of A or B to be eligible for a green mortgage. And that’s not easy to achieve.

The current EPC rating scale goes from A (the most energy-efficient) to G (the least). In 2019, it was estimated the average UK property EPC was just a D.

If you’re buying a new-build property, it might be worth exploring a green mortgage with your lender. Newer homes are typically more energy-efficient than older properties which often need a lot of work to meet the higher rating requirements.

Why are green mortgages becoming more popular?

It’s all to do with the government’s aim to reach net-zero emissions by 2050.

Currently, it’s estimated that 15% of the UK’s climate emissions are produced by residential properties. So, the government has said lenders must have an average EPC rating of C across their mortgage portfolios by 2030.

In simple terms, the government hopes that the target they’re imposing on lenders will trickle down to consumers who will make green improvements in return for lower mortgage rates.

How can I improve my EPC?

Unfortunately, if you own an older property, achieving a higher EPC rating could cost quite a bit. Some big green improvements include draught-proof doors and windows, roof and loft insulation, cavity wall insulation, insulated solid walls, a new boiler, and a low-carbon heating system.

You can check your property’s EPC rating here.

Thanks for reading, from all at Nest in Essex.

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Mark Stress Awareness Month By Helping Others

Whichever way you look at it, modern life is stressful. And the 2020s? Well so far, this new decade has caused unparalleled levels of stress.

Whether it’s the pressure of daily life, the juggling of responsibilities, or the state of the world right now, stress can have physical, mental, and emotional repercussions for people of all ages. And it needs to be taken seriously.

April is Stress Awareness Month, an initiative that has been running since 1992, designed to highlight the causes and cures for stress. This year, the Stress Management Society is focusing on community, reducing isolation and loneliness, and increasing social support.

In this quick read, we look at some of the ways you can help to support others feeling stressed or anxious.

Get talking

Sometimes, feeling stressed can be embarrassing. People can feel judged or self-conscious when struggling to cope. Help reduce the stigma around stress by talking about such feelings. Whether at home or in the workplace, those suffering with stress may feel like their issues are valid and gives them space to open up.

Be kind

It sounds simple, and it is. By showing understanding and empathy for someone who is stressed, you can help to ease the burden. Whether it’s making a workmate a cup of coffee or offering to help with a pesky spreadsheet, you can really make a difference to someone’s day.

Share coping strategies

Letting someone feeling stressed know that you’ve felt the same way may help to reduce feelings of loneliness. Maybe your way of coping is by doing some simple breathing exercises or writing ‘to-do’ lists, everyone has their own ways of managing times of stress and sharing them could really help others.

Look after yourself

If you’re feeling anxious or stressed, take the time to acknowledge and understand your feelings. Don’t berate yourself or feel like you should be able to cope. Stress affects everyone in different ways and if you need to take some time to de-stress, that’s perfectly ok.

Talk to your kids

Whether you’ve got a stressed-out teenager about to sit exams, or your little one is worried about their friendships, it’s important to open the dialogue about these feelings and try to suggest ways they can feel better.

Children are like sponges, and things like the pandemic, or the current global situation can really impact them. Looking after your little one’s mental health is just as important as putting a plaster on a cut finger or kissing a bruised knee.

Thanks for reading.

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Things to Consider If You’re Selling Your Home Due to Financial Reasons

If you’re experiencing financial difficulties, you may be considering selling your home. This is a very challenging decision and needs to be given some serious thought.

In this two-minute read, we look at some areas to think about before you decide whether to sell your property or not.

This piece is not meant to offer financial advice. We recommend speaking to a financial expert before making any big decisions.

Understand your debt

You probably have a mortgage and it’s important to understand whether selling your home will give you enough money to clear your debt. Releasing the equity in your property is only helpful if the amount you owe is less than the value of your home.

There are ‘good’ and ‘bad’ debts to have, and a mortgage – although a big financial commitment – is often considered a good debt. This is because your property’s value should increase over time. It is important to get an accurate valuation of your property to work out how much you may still owe on the mortgage after sale.

Can you afford to sell your home?

While selling your home is often a final option, you need to remember there are costs involved. For example, you’ll need to pay legal fees, estate agent costs, conveyancing costs, and possibly pay for repairs to the property before sale.

It’s not a simple process and can cost a lot, making your debt problems more challenging in the short term.

It takes time to sell a property

If you need cash to clear a debt quickly, keep in mind that property sales can often be a slow process. There are many things to consider first. For example, is the property ready for sale? Do you need to decorate or make repairs? What’s the current market like?

Are you sure?

You might be selling with plans to downsize to a more affordable property, perhaps you’re going to rent or move in with family. Remember, when you sell a property, it can be hard to get back onto the property ladder in the future.

We understand that selling due to financial challenges is a big decision to make and that’s why we encourage people to think very carefully about it. Mull over the three questions below:

Have you considered all the options?

Have you spoken to your bank about your mortgage payments?

Have you spoken to a financial expert or a debt charity?

They can help you to restructure your debt and give advice around whether selling your biggest asset is the right move.

If you have any questions about this topic, please contact us. We treat all enquiries with care and confidentiality.