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Could adding rent payments to credit scores help tenants become future buyers?

The growing movement to ensure that rental payments are added to credit scores as a mandatory requirement could provide a huge incentive for the next generation of home buyers.Automated rental payment provider PayProp says this measure, combined with the recent stamp duty cut for first-time buyers, means tenants could soon be in their best position in years to get on the property ladder.
Benefits for tenants, landlords and letting agents
Currently, credit agencies do not, as a matter of course, include tenants’ rent payment histories when calculating credit scores – missing an opportunity to make mortgage funding accessible for some tenants.

Neil Cobbold, chief operating officer of PayProp in the UK, had this to say: “Many tenants have been paying rent on time for years, if not decades. The fact that this does not carry the same weight as a mortgage payment is hard to believe.Thanks to the rapid growth of the private rental sector, more tenants are paying higher rents. Taking cognisance of rent payments would therefore make perfect sense, encouraging the next generation of property buyers.”

Cobbold says the prospect of a better credit score will give tenants even more incentive to pay their rent on time each month, something which would benefit the cash flow of landlords and letting agents, and contribute towards reducing rental arrears. In addition, landlords and agents referencing tenants would benefit from having a better idea of prospective renters’ payment history and financial situation.

 Could adding rent payments to credit scores help tenants become future buyers?

Industry campaigning again makes a difference

The move towards including rent payments in credit scores has gathered significant momentum over the last year. Following regular campaigning by several industry organisations, an online petition attracting over 140,000 signatures forced MPs to debate the issue in Parliament in October.

After the debate, Lord John Bird – the founder of the Big Issue – launched the Creditworthiness Assessment Bill which pledges to ensure that tenants’ rental payment records count towards credit ratings.

The Bill passed its Second Reading in the House of Lords at the end of November and will now have to pass a Report Stage and Third Reading before passing through the House of Commons.

Despite still having to pass through several Parliamentary requirements before receiving Royal Assent, the Bill has gained significant cross-party support and is thought likely to formally become law at some point during 2018.

Government embraces PropTech with Rent Recognition Challenge

The campaign for adding rental payment history to credit scores was further bolstered by an announcement made in the recent Autumn Budget. The government has put aside £2 million for technology entrepreneurs working to develop an application that can allow the relevant data to be recorded and processed.

The Rent Recognition Challenge will provide funding to the six best proposals to help develop them into workable products.

Cobbold adds: “Recording and counting rent payments towards credit scores is a modern phenomenon and therefore it needs a modern solution. That’s why this is a fantastic idea and one that shows the government is keen to embrace the PropTech revolution.”

A bright future for the rental payments industry

Cobbold says this timely development represents another step forward for the growing rental payments industry.

Government announce tough new powers to tackle rogue landlords.

Government announce tough new powers to tackle rogue landlords

Rogue landlords have been put on notice as the government announced a raft of new measures to crack down on bad practices, stamp out overcrowding and improve standards for those renting in the private sector.

Housing Minister Alok Sharma has set out how, subject to parliamentary clearance, landlords renting properties in England occupied by 5 or more people, from 2 or more separate households will need to be licensed.

The move, affecting around 160,000 houses, will mean councils can take further action to crack down on unscrupulous landlords renting sub-standard and overcrowded homes.

Government has also set out details of criminal offences which will automatically ban someone from being a landlord. From April next year, someone convicted of offences such as burglary and stalking can be added to the database of rogue landlords and be barred from renting properties.

These latest measures build on government action to date to drive up safety and standards in the private rented sector. This includes bringing in fines of up to £30,000 for dodgy landlords, protections for tenants from revenge evictions and £12 million funding for councils to take enforcement action in hotspot areas.

 Alok Sharma, Housing and Planning Minister, said: “Every tenant has a right to a safe, secure and decent home. But far too many are being exploited by unscrupulous landlords who profit from providing overcrowded, squalid and sometimes dangerous homes. Enough is enough and so I’m putting these rogue landlords on notice – shape up or ship out of the rental business. Through a raft of new powers we are giving councils the further tools they need to crack down these rogue landlords and kick them out of the business for good.”

The move will also benefit wider communities fed up with living near shoddily maintained properties without proper bins, dumped rubbish and anti social behaviour. Landlords will be held responsible for making sure the council’s rules on refuse and recycling are followed.

New rules will also come into force setting minimum size requirements for bedrooms in houses of multiple occupation to prevent overcrowding. As part of the licencing requirements, local councils will be able to make sure only rooms meeting the standard are used for sleeping.


Warnings on the perils of hosting a Christmas party at home

According to new research from Sainsbury’s Bank Home Insurance, 37% of people plan to host a Christmas or New Year’s Eve Party this year.

However, their data suggests that over the past five years as many as 18% of party hosts have had an item damaged at their home – with 7% claiming belongings were stolen.

The bank is urging those planning to host parties this festive season, to make sure items are safe and if necessary moved to protect them from being damaged or stolen. It also says valuable belongings should be locked away.

What’s more, Sainsbury’s Bank cautions that contents which are damaged or stolen by invited ‘guests’ will not necessarily be covered by home insurance policies, and is urging  party hosts to be mindful of their property and all items of value when planning a party.

Bank's warnings on the perils of hosting a Christmas party at home

Home insurance is there to protect your home and possessions against the unforeseen, for example, theft, loss and accidental damage. It requires homeowners to take care of their properties and may not cover every eventuality. People should take the time to familiarise themselves with their policy so that they understand what it covers.

The bank’s research reveals that the average cost of stolen items during a party is higher than those damaged (£565 vs £192.20). Of those who said items had been stolen during a party in the last five years, eight per cent have had items worth over £1,000 go missing following the gathering.

One of the main reasons for items being stolen or damaged at parties could be uninvited guests. Some 10% of people claim unwanted guests have turned up to their parties after they or their partner posted details of them on social media or messaging apps, and this has happened to eight per cent of people when their children did this.

Karen Hogg, Head of Insurances at Sainsbury’s Bank, said: “Our research shows those throwing Christmas and New Year’s house parties must be vigilant to protect their homes and belongings. It’s important to be on guard to stop people they don’t know gate-crashing their celebrations.

If you plan to have a Christmas or New Year’s party, it’s worth checking with your home insurance provider to find out what you are covered for.  If items are stolen by ‘guests’ you won’t be covered, and any damage caused during a party will also be scrutinised by most home insurers.”

Why is it so difficult for some to downsize?

According to a new survey of 205 IFAs, emotional ties to their family home is the single biggest barrier to retirees downsizing.

The research, from more 2 life, found that 87% of their clients cite this as the most common reason for not moving, with over half (52%) saying they can’t find another suitable property to move into.

Other explanations retired clients gave for not downsizing included moving costs being too high (35%), leaving it too late to move (29%), and the level of stamp duty they would be required to pay being too high (20%).

73% of IFAs have had clients ask for advice on downsizing and 4 out of 5 IFAs said they would sometimes recommend equity release as an alternative option to downsizing, but only if it was appropriate to the situation. Only a small proportion (9%) would always recommend it to their clients as an alternative.

As such, more 2 life is calling for more advisers to raise the topic of equity release as a viable solution for clients who are unwilling or unable to downsize. Additionally, for any clients who may have plans to downsize in the future, the lender is stressing the importance of discussing modern features such as downsizing protection with them to help avoid unnecessary exit fees on their loans.

Stuart Wilson, Channel Marketing Director at more 2 life, commented: “This new research shows that, understandably, many retired individuals are reluctant to move out of their homes and leave behind the memories and connections they have made there. However, for retirees who still require extra wealth for whatever reason, whether that be to repay an existing mortgage, supplement their current retirement income or pay for a once in a lifetime holiday, equity release is an extremely viable alternative option. Equally, where downsizing is very much part of a client’s plans, advisers should be making them aware of products that can help them make that transition without incurring early repayment fees.

There are a wide range of products available in the retirement lending market which can help meet customers’ needs. Advisers have a crucial role to play in raising awareness among their clients, of both the features and benefits of equity release products. At more 2 life, we understand the importance of advisers in the later life lending process and encourage them to think outside the box when having retirement planning discussions with their clients. By highlighting product features which clients may be unaware of, they may be able to potentially make equity release a solution to helping retirees find extra funds without having to leave their family homes.”

Tenants going away for the Summer ? Here’s what to consider…

Holiday season is in full swing, and with so many Britons leaving the country for a summer break abroad, plenty of households will be going unoccupied and empty for weeks at a time.

It’s essential to ensure that all of your domestic appliances are safe, especially before jetting off on your hols, so that you don’t return to any unwelcome surprises – like a hefty utility bill, a broken appliance, or as seen with the tragic events of Grenfell Tower, potentially much worse.

To help, the Association of Manufacturers of Domestic Appliances (AMDEA) has put together a handy checklist, so that landlords and tenants can rest easy during the holiday months

As a landlord, you may wish to offer the following advice to your tenants during this time, and use the free period to arrange to register any appliances (if you haven’t already done so).


  • Turn off and unplug all unnecessary electrical appliances, such as washing machines, tumble dryers, dishwashers, televisions and computers.
  • Unplug small devices and chargers, particularly those for mobile phones, laptops, tablets, e-readers and hair straighteners.
  • Check that the smoke alarms are all in working order.
  • Clear debris such as carrier bags and newspapers from any areas that may prevent appliances from operating, such as the back or sides of a refrigerator.


Taking these steps can make a big difference in preventing any problems and giving both you and your tenants peace of mind during the holiday season.

Tenants going away for the Summer? Here’s what to consider…


Cap on security deposits could cause problems for tenants with pets

As the recent Queen’s speech reaffirmed the banning of letting fees to tenants, the National Landlord Association have identified a potential issue related to the proposed capping of security deposits to just one month. This change could influence the likelihood of landlords letting to tenants with pets due to the fact that properties that permit pets often have a higher deposit, used to cover any damage.

The NLA have questioned the change and released the following statement.

 “In the initial consultation on the fees ban the Government announced their intention to look at putting a cap on security deposits. Data from the NLA AST statistics show that the average deposit (of those taking a deposit) is 4.92 weeks’ rent.

While not the intention, the Government’s plans for imposing this one-month cap on security deposits will reduce landlords’ willingness to accept pets by removing their flexibility to take a higher deposit to cover for pet damage.

Previous research from the NLA showed that almost half (47%) were unwilling to allow pets, with 41% of those citing the reason as potential property damage.

The Dogs Trust’s Lets with Pets scheme advises landlords to either take a higher deposit or include a “professional cleaning on move-out” clause in the tenancy agreement in order to mitigate the financial risk of property damage.

However, the Government’s plans at present could very well outlaw these practices. The end result? Even fewer landlords willing to let to tenants with pets.”

Obviously, it’s not the intention of the Government, but these changes may directly impact many tenants and their pets.

Cap on security deposits could cause problems for tenants with pets

Landlords warned of potential rise in property fraud

Home owners and buy-to-let landlords across the Midlands are being warned of a potential rise in fraud during the busy summer selling season.

The alert comes from property lawyer Javed Ahmed who said owners could find themselves conned out of hundreds of thousands of pounds by people who “clone” their identities and sell houses and flats out from under them.

Mr Ahmed, from Midlands law firm mfg Solicitors, is concerned there will be a rise in fraud over the summer – typically the busiest time for the property market – and said owners needed to act now to protect themselves.

The assistant solicitor said fraudsters operating across the region had been known to fool estate agents and lawyers by posing as the owner of property and then managing to take out loans or mortgage the building.

Mr Ahmed said: “Property is usually the most valuable asset people will own and it’s a hugely attractive target for fraudsters who want to sell it and pocket the money. It is something people think will never happen to them but it is a very real threat and people here in the Midlands must guard against it.

Those who are most at risk are people who rent out their property, or whose property is vacant.

It’s also an issue for those who own the property outright without a mortgage but one of the best steps is for owners to arrange a restriction on their title to prevent the Land Registry registering a sale without the identities being verified. It’s a process best taken care of by a professional to ensure every box is ticked.”

Top tips on how to keep your home cool this summer

It’s safe to say that as much as we in Britain look forward to a bit of sunshine. Whenever they arrive we suddenly find ourselves struggling to keep cool; even in our own homes we can feel as though we’re walking around in a sauna.

Your first instinct may be to throw money at the problem by booking an air conditioner installation service, but this may not be the best solution. Depending on the state of your home, there could be several cheaper methods for keeping your home cool in the summer, some of which could benefit you all year round.

Stephen Jury, spokesperson at Plentific, had this to say: “When you get home after a hot day in the office, the last thing you want is to step inside a warm house. Before extreme measures of air conditioning are taken, other smaller, and considerably cheaper options are available.

Here at Plentific, we understand how uncomfortable it can be to feel hot and sticky at home, so we’ve put together a guide on how to keep your home cool this summer:

Install insulation

Now, you might be suspicious of this one. Most of the time, we think of insulation as something that keeps our homes warm during winter. While it is true that insulation will stop heat from exiting your home, it can also help to keep it out.

In a nutshell, insulation works by preventing the passage of heat, typically through walls, lofts or roofs. This capability will stop heat from entering into your home during summer, while also making it easier to maintain your property’s internal temperature.

If you do not have insulation in your home, the best place to start will be with a loft insulation installation service. Most roofs are built with materials that absorb heat and then transfer it into the space below; in other words, your loft. This can heat up a house, but by insulating your loft you can ensure that the heat stays concentrated in your attic. Want to check if it’s working? Head up to your loft: it will be roasting.

Tree and ivy planting

One of the best ways to stay cool this summer will be to give yourself some shade. Planting trees in your garden will provide this while also adding variety and beauty to your outdoor space. Plant a fruit tree, and you’ll also have a healthy crop to enjoy in a few years.

The disadvantage of this option is that once you have planted a tree, it can take a while to pay off. An alternative is to grow a seasonal creeping plant, such as ivy, over a wooden trellis or pergola. Although this will require more maintenance, it can give you a simple, quick and attractive source of shade that you’ll be able to enjoy all summer long.

Get cooking outside

While it may sound like a bit of a no-brainer, a lot of heat in the home is generated in the kitchen. Cooking over a hot stove in the middle of summer can quickly become unbearable, so why not take your cooking outside?

Barbecuing is one of the best parts of summer: they make cooking outdoors a lot of fun, give you a chance to experience different tastes and also create plenty of opportunities for enjoying yourself with friends and family. While there are plenty of high end BBQ models, you could easily create a brick BBQ for yourself if you wanted something that will really impress.

If you wanted to take your outdoor cooking a step further, why not speak to a landscape designer about creating an outdoor kitchen? These can be built with attached water taps, gas hobs and even built-in appliances.

Paint it white

Have you ever been on holiday to the Mediterranean and wondered why everyone paints their homes white? There’s a very simple reason: white surfaces reflect heat.

Still, while a full exterior wall painting job for your property might seem like a simple solution, it may not be completely practical, partly because you will struggle to gain planning permission for it! However, painting your roof, or even booking a reflective roof installation service, will deflect a great deal of heat from your property. You could also invest in white curtains and blinds to help reflect heat away from your windows.

As luck would have it, painting your home white also has other advantages. White is a fairly neutral colour that holds a lot of universal appeal. This could, in turn, make your home much more appealing when you come to sell it. White walls can also help to make a room feel warm and open, and the last thing you want on a stuffy day is for a room to feel claustrophobic.

Turn off appliances

In this hot weather, it may be tempting to put off doing chores for as long as possible. You might be glad to hear that you have an excuse: appliances can generate a great deal of heat.

Appliances such as washing machines and dishwashers use a huge amount of hot water , and running them during the hottest parts of the day will raise the temperature in your home. You can avoid this by waiting until the evening and putting them on just before you head to bed.

Cutting down on your appliance usage will also be a big help when it comes to cooling your home. If you have a habit of leaving electronic devices such as computers or televisions on, start switching them off when they are not in use. Instead of using your tumble drier, set clothes to dry on a line outside.

10 ways to beat the tax man for Landlords…

A successful landlord, amongst other things, is a tax efficient landlord. So London based estate agent, Portico, asked the experts for 10 legitimate ways to reduce your tax bill and the results are below.

1. Expense, expense, expense

The first step in making your property tax efficient is knowing what expenses you can offset.

Seasoned landlord, Richard Blanco, has this to say:  “Religiously keep all of your receipts so that you can offset absolutely every expense against your profits. Talk to your accountant about travel costs, certain motoring expenses or types of vehicles that can be set against your profits.”

Here’s a list of some of the most common types of expenses:

• Water rates, council tax, gas and electricity
• Business and contents insurance
• Letting agents’ fees
• Legal fees for lets of a year or less, or for renewing a lease of less than 50 years
• Accountant’s fees
• Rents, ground rents and service charges
• Direct costs such as phone calls, stationery and advertising for new tenants
• The associated costs of running a home office

2. Reduce your stamp duty bill

Richard advises to “Avoid mega stamp duty by extending or expanding your current rental property(ies). Ultimately, the more expensive the property, the greater the theoretical savings.

Now is a good time to extend because permitted development rights are more generous than they have been in the past. However, be mindful of the change in the HMO definition due to come into force in October. From then on, any property with 5 or more sharers will need an HMO license, so if you extend your property and it becomes suitable for more sharers, check it’s up to mandatorily licensable HMO standards. Ask your council’s licensing department if you’re in doubt.

The golden rule for expanding an existing property is that the uplift in value should be more than the cost of the works. There will be a ceiling price for properties in some areas however, which means your property may not increase over a certain price even if you expand it – unless the area improves.  We’re in a tricky market at the moment so do your sums and expect conservative price growth.”

3.  Transfer your assets

Another way to potentially cut your tax bill is to use your spouse’s 0% and 20% tax bands.

Richard explains that “Generally no Capital Gains Tax is payable if you transfer assets to your spouse, plus if their earnings fall into a lower tax bracket you could pay less tax on the rental profits.”

Stamp duty land tax is not payable on the so long as the property is not mortgaged, and the husband or wife who is passing on the property doesn’t want any money for it.

4.  Save when you sell

If you are selling your rental property, make sure you claim all of the available relief.

Richard states: “If you’re a multi-property landlord, it’s often more tax efficient to sell one property in each tax year to take advantage of the 0% CGT band up to £11,300. Effectively this means you can make gains of up to £11,300 in a given tax year without any tax being due.”

5. Landlord Ltd?

Some landlords find it is more tax efficient to manage their properties through a limited company which effectively acts as a letting agent.  The Company could employ the landlord, relative or member of staff to manage the properties.  Richard advises you to talk to your accountant or tax adviser about this before proceeding.

6. Restructure your portfolio

You can also set up an LLP and Ltd company as a way of allowing all finance costs to be set against profits. This is complex and expensive to set up but it might be a positive way forward for landlords with larger portfolios.

Always be wary of spending a lot of money restructuring your portfolio around tax legislation. The government could change the rules in the next budget and you might then kick yourself for spending money on an expensive restructure.

7. Buy property through a company

If you’re thinking of buying property, setting up a limited company is more tax efficient in the sense that all finance costs can be set against profits. Richard urges landlords to “Beware of the extra cost of commercial mortgages.  This could offset any savings you make in tax.”

If you’re considering setting up as a company to save tax, make sure you read and digest our landlord’s guide to incorporation.

8. Remortgage!

Landlord and property expert Mark Lawrinson says that “A great way of cutting your interest costs is by re-mortgaging. Buy-to-let mortgage interest rates have fallen significantly in recent years, so deals currently on the market may well be substantially better than on products arranged a few years ago.”

9. Get your rental property revalued

With large increases in property prices in London, another tip is to get your rental property re-valued. This will make your lender recalculate your loan to value, and a lower loan to value means a better interest rate and a larger choice of lenders.

10. Fill the voids

If your buy-to-let property is empty for any period of time, remember that expenses such as utilities or council tax incurred can be claimed as an expense.

But more importantly, rather than losing money while your property sits empty, why not Airbnb the property until your find a long-term tenant?

Hosts typically earn up to 50% more on a short-term let than a long term-let, and we offer a premium Airbnb Management service in London so we can take care of the whole process. All you need to do is let us know when the property is available and we’ll organise guest bookings, arrange for 24 hour access, take care of cleaning and organising hotel standard towels and linen, and even kit it out with furniture if needs be.

Portico are keen to point out that they do not provide tax, legal or accounting advice and that this material has been prepared for informational purposes only. Please consult your own tax, legal and accounting advisors before engaging in any transaction.

Landlords adapting to controversial tax change

The nation’s landlords are adapting to ongoing restrictions to tax relief on buy-to-let mortgage interest, according to Mortgages for Business.

Upon releasing its latest Property Investor Survey, the firm says landlords’ appetite for further investment has not been dampened.

The proportion of surveyed landlords seeking to expand their property portfolios has grown to 48%, up from 45% in November and 41% a year ago.

Meanwhile when it comes to buy-to-let mortgages, landlords have been increasingly choosing to fix for five years instead of three.

Five-year fixed rates are now the preferred option for 42% of respondents, up from 33% in November and twice the level recorded in May 2016.

Three-year fixed rates are now less popular than ten-year fixes, being chosen by just 5% of respondents – less than a third of the figure recorded a year ago.

Mortgages for Business’ survey was carried out in May and attracted almost 200 responses from landlords and property investors.

“Although we expect buy-to-let lending to reduce somewhat this year, these results demonstrate that landlords are a resilient bunch, capable of adapting their investment strategies to successfully accommodate the new fiscal and regulatory landscape,” comments Steve Olejnik, chief operating officer of Mortgages for Business.

He says that incorporation – which allows landlords to offset the impact of April’s tax changes – has now become standard practice.