The National Landlords Association looks set to be mounting a challenge to become a professional body within the lettings agency market.

The largest landlord organisation in the country, the NLA is now to link with the UK Association of Letting Agents (UKALA), an organisation said to have around 500 letting agent members.

UKALA, which is based in Colchester, Essex, describes itself as “the professional association for the lettings industry”.

It goes on to claim that it is “a non-profit organisation registered with the government department responsible for housing”.

One of its member benefits is a special low rate is described as being at the “Tenancy Deposit Solutions Ltd tenancy deposit protection scheme”.

Although officially described as a “tie-up” and not an acquisition or takeover, UKALA members are to vote at their AGM next month on allowing the NLA to take over the management functions of UKALA.

Whatever the outcome, UKALA will benefit from the well-proven PR and lobbying power of the NLA’s staff, and UKALA members will also have access to client money protection insurance.

The relationship is seen by the NLA as a “channel to market”, according to one source, who said the move was tantamount to putting 'tanks on the lawns' of NFoPP

Evidence supporting a strong resurgence in buy-to-let is hard to ignore. Recently Countrywide, the UK’s largest letting agent, said it has seen the number of tenants entering the market reach unprecedented levels.

Between April and June Countrywide had some 50,000 new tenant applications and more than 20,000 in July alone.

But rental properties coming on to the market remain limited. Countrywide has suggested that if demand continues to rise at the same rate, more prospective tenants will be on waiting lists and exacerbate the problem of supply.

Home Truths 2010, a report by the National Housing Federation, suggests the country is in the midst of the worst housing crisis for generations and fears an entire generation will be locked out of the housing market as a result of high house prices.

And with the chronic social housing shortage the NHF says people will increasingly look to rent instead.

This puts greater emphasis on the private rental sector, with more demand for rental property and sustainable long-term opportunities for landlords.

So what does this mean for brokers?

Given the wealth of research that supports the demand for rental property, now is the time to get in touch with buy-to-let clients to see whether they plan to grow their portfolio. There are products available for investors who want to take a long-term view.

Landlord confidence has taken a hit in the last three months, according to a survey, but 42 percent still think now is a good time to invest.

Increasing tenant demand has fuelled optimism and cushioned slower capital gains, said property services company LSL, with 37 percent of landlords reporting increased interest.

However, the LSL survey shows six percent of landlords are considering selling off some of their properties, with two percent ready to reduce portfolios.

The average annual return made by landlords fell from 13.2 percent in April to 10.1 percent in July, according to the LSL index.

Due to the leveling off of house prices , an investor buying property now could expect a total annual return of 3.5 percent, the equivalent of £5,838, if conditions stay the same during the next year.

“Rising rents and house prices offered landlords bumper annual returns at the start of the year and this was reflected in the surge in confidence,” said David Brown, managing director of LSL corporate client department.

“This has fallen slightly following the slowdown in house prices and the capital gains tax hike.”

Landlords report a slight improvement in buy to let lending in the past quarter and according to the latest CML statistics, the number of buy to let loans increased 13 percent in the three months to the end of June, compared to Q1.

However, the number of loans is still 72 percent lower than the same quarter in 2007.

Brown said: “Mortgage finance remains a daunting obstacle for those looking to get a foot on the property ladder. This is keeping thousands of frustrated buyers in rented accommodation, pushing up tenant demand and rents.

“But borrowing remains a thorn in the side of potential investors too. Despite a slight easing in lending in the last quarter, mortgage finance constraints are hitting landlords.

“Funding conditions remain tight for lenders and lending to landlords won’t loosen significantly in the next two years.

“The introduction of increased Capital Gains Tax for higher band taxpayers in May this year was a driving factor behind the slight fall in landlord confidence”, said Brown.

For example, the average property investor owns three properties and has seen capital gains of £152,219 since they bought their properties.

If they sold their properties today, they would face a capital gains tax bill of £39,793 - an increase of £11,369 from the previous tax regime.

Brown concluded: “The increased CGT hit many property investors’ confidence. And it will hit many more in the pocket over the next few years.

“But the hike wasn’t as steep as first feared and we’re already seeing landlords adapt their disposal strategies for their portfolios, planning to spread sales over several tax years to mitigate their exposure to the higher rate.”

utbacks in Local Housing Allowance will push increasing numbers of tenants into arrears. But demand for rental properties remains high, so what is the outlook for landlords?



The National Landlords Association reports that confidence among landlords has dipped for the first time in almost two years, driven by concerns about arrears and increases in Capital Gains Tax. Meanwhile, rental agents report a shortage of properties and an increase in demand as first time buyers give up hope of getting a mortgage.

According to the NLA, landlords are anxious about Coalition plans to restrict Local Housing Allowance and are afraid that this will show up as an increase in arrears as tenants struggle to fund the shortfall on their rent. LHA, paid to a million private sector tenants who are unemployed or on low incomes, is to be capped at a maximum of £400 a week with lower caps for smaller properties.

‘Cuts to Local Housing Allowance are causing concern to many landlords as it could leave their tenants struggling to pay their rent.’ commented Chris Norris, policy manager at the NLA. Figures from the NLA reveal that a fifth of private-residential landlords had tenants in rent arrears during second quarter of 2010.



Demand holds up Clearly, if LHA is reduced then some landlords will suffer – those whose rental levels exceed the caps and anyone letting for more than £400 a week to a tenant on benefit. But if demand for property currently exceeds supply – as the letting agents and various surveys indicate - then presumably landlords will be able to find new tenants who can afford the rent.

‘This is primarily a London problem,’ says Vincenzo Rampulla of the NLA. He denies that some landlords have been profiteering. Government figures show that the median LHA rent for three bedroom accommodation in London is £730 a week – well above the new £400 cap - and there are some claimants receiving as much as £4,500 a week

The lettings market is looking strong, with record demand from tenants and rising rents.

Countrywide Residential Lettings reported an unprecedented 50,480 new tenants registering in the second quarter of the year – a 16% increase since January. In June alone, there were over 18,000 new tenant registrations.

However, the supply of rental property has dropped 6% in the last three months.

There is now an average of 5.5 tenants vying for each property, says Countrywide. The highest demand remains for two-bedroom houses, with 8.9 tenants wanting each property.

John Hards, Countrywide Residential Lettings co-managing director, said: “The number of tenants entering the market is at unprecedented levels – and we have yet to enter the peak season. Student demand for private rental accommodation will increase further.

“The buy-to-let sector remains a good source of investment: however, the Government needs to do more to incentivise new landlords in order to appease the current shortage of properties. If tenant levels continue to rise at the same rate, this will be further exacerbated.”

The RICS agrees that tenant demand has increased across all regions. It said difficulty in securing mortgage finance, worries over a double dip in housing and large deposits required by lenders are leading to higher numbers seeking to rent rather than buy.

But supply of property to the market remains low and has now fallen for four consecutive quarters.

John Heron, managing director of specialist lender Paragon Mortgages – which has closed its books to new business – said: “The private rented sector has to expand to meet growing levels of tenant demand.

“With fewer owner-occupier mortgages available, limited resources in the social housing sector and wider social and demographic changes such as a growing population, increasing net migration and rising numbers of single person households, we are entering the age of renting. Unless the private rented sector is able to meet this growth in demand, rental inflation is likely.

“Unfortunately, the buy-to-let market is still very focused on small-scale landlords and is failing to serve the needs of professionals who require finance for more complex investments such as multi-unit blocks and Houses in Multiple Occupation. Until this changes it is likely that we will continue to see supply failing to keep up with demand.”

A West Country company leading an initiative to combat rogue tenants has received backing from lettings agents and landlords.

TenantVet, which is based in Swindon, Wiltshire, has developed a database system telling agencies whether a prospective tenant has a track record of trouble.

The initiative is being piloted in the Swindon and north Wiltshire area with the aim of rolling it out nationwide in the coming months.

Simon Rosser, partner at Swindon Homes Direct, said the problem was fairly common and a database would help offer landlords greater protection.

He told the Swindon Advertiser: “Sometimes even if you run a credit check you have not got a leg to stand on when a tenant does a runner and so the poor landlord is left high and dry.

“This database is ideal because any problems and you can just check them out – if you are wrong, no harm done.”

Rosser said he had experienced problems with some tenants before. He explained: “We had a property in the town centre and the tenant was working outside the area. We tried to get a reference from a previous landlord but he said he had stayed with a friend.

“He was then made redundant and got into selling drugs. He started not paying his rent and then he did a runner three months in arrears.

“We found out he had done a similar thing in Northampton, where we later found him, and if we had this checking system we would have known about him.”

Craig Norris, lettings agent at Philip Andrews Estate Agents, told the paper: “It sounds like a good system and a lot of people would use it. It’s like cowboy builders – it should exist for problem tenants.”

Lorna Rose, director of sales and marketing at TenantVet, said: “In this country there are well over half a million tenants in arrears, owing more than two months’ rent.

“Rogue tenants cost the industry and local authorities many millions of pounds every year, not only in arrears but in damage to property and expensive legal actions to recover unpaid rents, compensation or to seek evictions.

He added that letting agencies can do credit checks but often will not know if the person has a history of nonpayment of rent, damage to property, improper use of a property or of simply vanishing.

The firm has spent two years developing the product to ensure the technology works properly and there are no breaches of the Data Protection Act.

X FACTOR Alexandra Burke has warned this year's contestants that the hard work will begin AFTER the show.

The winner of the fifth X Factor series, in 2008, scooped a £1million recording contract and has topped both the singles and albums charts.

But she reckons many who make it through to the finals of the TV talent contest make the mistake of believing the TV exposure will guarantee them a pop career.

Alexandra has been lined up as a mentor in the Australian version of the show, alongside fellow singers Natalie Imbruglia and Ronan Keating .

She explained: "Even if you win the show, the hard work starts when the show is finished.

"Everyone has to maintain that level of hard work to keep the buzz going.

"It's crazy when you're on the show. You're talked about for those three months. But once the show is done, you have to work really hard and record great songs.

"I know what the contestants are going through and that they've all dreamed of this moment.

"What is really special about The X Factor is that when you get out of the show, it's about the opportunity to fulfil dreams.

"If you let that moment go, it's gone, but if you continue to work hard, you could have a really good career."

The 22-year-old releases her new single Start Without You, featuring Laza Morgen, on September 6. And she says she's already making plans for the day when her own career starts to wane.

She's investing the money she has made from her hits in a property portfolio and has already become a landlord.

She said: "I've just become a homeowner. I found somewhere to buy and I'm renting it out. It's a two-bedroom apartment in London and it's really cosy. I'd live there myself but I already have a tenant in.

"I'm trying to build up a property portfolio. It's the best thing to invest your money in. My aunt drilled that into my head from an early age."

Alexandra says she rarely gets the chance to speak to pop guru Simon Cowell these days - though he has told her not to worry about her tracks being leaked on to the internet.

She was left fuming after a batch of her songs were posted online, ahead of their official release.

"I don't see Simon much as he's very busy," she admitted. "I talk to him via the phone - texting, emails and so on. He's still a great support in my life."

Alexandra is preparing for a nine-day trek across the Andes alongside celebrities Fearne Cotton, Denise van Outen and Holly Willoughby.

The singer will travel the Inca trail in Peru to raise money and awareness for Breast Cancer Care - a cause close to her heart after her aunt Jean recently passed away from the disease.

The 80km, high altitude challenge through the Andes range and the Amazon rainforest will be shown in a two-part documentary on ITV2.

She said: "I'm excited and scared but it's for a great cause."

The age of renting is upon us but the house price recovery is set to stall, according to the latest surveys evaluating the property market.

The Land Registry reported a 0.4% rise in the average price of homes sold in England and Wales between June and July.

However, the Government department also noted that the annual rate of increase had now fallen for the second month in a row, after 15 previous months of rising growth.

As a result, house prices are now just 6.7% higher than a year earlier, down from the figure of 8.5% reported last month.

While the housing market seems set to struggle, a separate survey suggests that therecent buoyancy seen in the lettings market will continue for some time yet.

The Royal Institution of Chartered Surveyors (RICS) revealed that increased tenant demand and a shortage of properties to rent pushed rents higher in July.

Ongoing difficulties in securing mortgage finance, worries over a double dip in the housing market and the large deposits required by lenders all contributed to heightened rental demand, pushing rents higher for the second consecutive quarter.

RICS said that although record low interest rates meant property investment remained an attractive option, problems in securing buy-to-let mortgages were holding prospective landlords back.

The new supply of rental property to the market has now fallen for the fourth quarter in a row, while existing landlords looking to expand their portfolios also continue to struggle to access the finance they need.

"With fewer owner-occupier mortgages available, limited resources in the social housing sector and wider social and demographic changes, such as a growing population, increasing net migration and rising numbers of single person households, we are entering