We are in the process of transacting a deal which needs to be completed in a couple of weeks. There were some issues concerning the title, timing and works done to the property.
The reason we got this deal is because we could close very quickly. The consequence of this is we now need to get the funding in place post exchange.
To date we have never not performed in obtaining funding, we are pulling out all the stops to get this over the line. The time pressure has been built up partially by the clients, who compounded the problem through indecision, and not providing the relevant paper work in a timely manner.
This is probably the worst time to be taking it easy, as this is a time when valuers are on annual leave and the ones who are working are fully booked, many are focusing on their coming Christmas break rather than on entertaining new business.
It is with this backdrop we have been charged with the task of arranging finance for this deal. We have various arrangements with lending companies, in particular bridgers. This is whom you turn to when time is of the essence.
We have developed a good relationship with one particular bridger. Post Brexit when every finance company was worried about the loans they had out, due to the loan to values being breeched, we worked with the lender to ensure we managed to firstly reduce their exposure and ultimately managed to repay the debt by moving on to an alternate lender in due course. This carries a lot of weight, it is when things don’t go quite to plan and you still manage to maintain a relationship.
It is to them we turned to when time was of the essence and views need to be taken on certain points. We were lucky to obtain a valuation within 48 hours of instruction, and now are proceeding with the legals. It is our aim to actually complete prior to the legal completion date, so that we are in a position to rent the property out. Once you hit the Christmas period it becomes very difficult to find a tenant.
The only reason we couldn’t go to a main stream lender on this deal was the lack of time.
However, there are lenders now who have adapted to the market’s need for speed and offer a seamless transaction between a bridging loan to a conventional mortgage.
This means they will move at speed by bridging the deal, a bridging loan requires less information than a normal mortgage. Once this in place and the deal has been executed they can then transition to a conventional mortgage without the need of further valuation and further arrangement fees. This offers the best of both worlds to the investor, speed to close the transaction, and the comfort of having an exit to a conventional mortgage paying normal rates.
The fairness of wear and tear
The subject of long term tenancies is a hot topic at the moment, and they may present advantages for both landlord and tenant. However these benefits could be overshadowed by the potential for increased deposit disputes as properties let under longer agreements tend to display more signs of wear and tear, and require more expenditure at the end of a tenancy.
Since the Tenancy Deposit Scheme (TDS) began collecting data in 2007, cleaning has consistently been the most common cause of dispute featuring in 56% of cases in 2013 - the highest level recorded to date. Disagreements about damage and decoration follow closely behind.
The average length of private tenancies is now reaching 20 months, and it is clear there is a need for longer term tenancies to be available, especially for families.
However, the longer a tenant stays in a property, the more likely it is that the property will be subject to wear and tear, and when this occurs, a landlord could decide to hold on to the deposit in order to cover the cost of repairs, redecoration and cleaning bills at the end of a long term tenancy.
Landlords and agents have different expectations from tenants when it comes to fair wear and tear issues, so it is no wonder that so many tenancies end in dispute. Normal wear and tear is a fact of life with rental properties, just as it would be at home, but if landlords and agents wish to avoid the hassle of arguments over who is responsible for damage, they need to prepare a thorough inventory of the condition of the property that details the condition of everything in it. And since a detailed inventory is designed to protect both the landlord and the tenant, it is not unreasonable to suggest splitting the cost of having one professionally prepared.
Obviously, there is a distinct difference between fair wear and tear and actual damage – for example carpet tread will flatten over time, where there has been foot traffic, but cigarette burns, stains or soiling will require a charge.
Aside from ensuring there is a fair contract in place at the start of a tenancy agreement, a professional and detailed inventory will enable both parties to be treated fairly and reasonably. As the industry is becoming more and more regulated, one option is to step away and let someone else take the hassle. At Sow & Reap we would be happy to step in and manage this for you. Contact me today to discuss your property needs in more depth.
