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BTL landlords set to be offered 12 months’ rent upfront under new scheme

How does the idea of 12 months’ rent in advance sound? Choices Estate Agents plans to launch a new Advanced Rent Option (ARO) product, which allows landlords to receive their annual rent upfront in one lump sum.

The initiative, believed to be an industry first, will be officially launched to landlords and lettings professionals at an exclusive event at the Royal Institution of Great Britain on Wednesday 28th August.

The scheme, which sees landlords paid upfront and in advance even though the agency is collecting rent on a monthly basis, provides investors with a lump sum to manage buy-to-let mortgage payments or expand their property portfolio.


Simon Shinerock, owner of Choices Estate Agents, which covers the South East of England, commented: “We’re offering landlords a fantastic opportunity to receive their annual rent upfront for the year. Using this money, landlords could expand their portfolios or make a luxury purchase such as a car or holiday.

“We want to provide landlords with more financial freedom, while at the same time ensuring they have the protection and peace of mind they require by letting through a trusted high street agency.”

Subject to referencing, ARO can provide landlords with up to 12 months' rent in advance, minus standard letting agency fees.

For example, based on a property with a monthly rental of £1,200 per month, landlords could receive an upfront lump sum of £10,231 by signing up to ARO.

This final figure is calculated by discounting standard annual agent fees costs of £2,592, new tenancy setup fees of £395, a rent guarantee of £432 and an emergency maintenance float of £750 from the total annual rent of £14,400.

Shinerock continued: “All shrewd investors know that during a market lull is the time to pick up a bargain before the next period of growth.

“However, finding the capital to do so is not always easy. That's why we want to help landlords to take advantage of favourable investment conditions by using the annual rent from their existing properties to purchase their next one.

“It's clear that in the face of rising costs and increased legislation, the rental market makeup is moving away from accidental and part-time landlords and shifting towards professional investors with large portfolios.

“The ARO can help landlords to take their next step in the market and start on the path to creating their very own property empire.”

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    And when the tenant defaults. Who pays

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    no thanx

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    SCAM !

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    No thanks

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    Good luck with finding landlords so naive to sign up to this scam offer...

    I thought Landlordtoday represents slightly better values that this.

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    "standard annual agent fees costs of £2,592"

    That is £216 a month!!!

    Let me know where you are and we'll come and set up an office.

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    Only 18% a month of "standard agent fees..." what a joke...

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    Rip off flash Agents at it again

    PossessionFriendUK PossessionFriend

    Can't blame the agents for trying I suppose -
    got to question the sanity of anyone gullible to fall for it though !

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    • 16 July 2019 17:22 PM

    When will idiots like the OP stop spouting their rubbish about Accidental and part-time LL.
    Letting agents are NOT the answer unless you like giving away your income to a LA.
    Only those LL for whom it is a physical impossibility to reach their rental properties easily need use a LA.
    The rest of us LL are more than capable of managing our properties etc.
    We don't need LA.
    They are no more professional than a new LL .
    Anyone can start up as a LA without qualifications so don't give me the rubbish that LA are better than LL at knowing what they are doing.
    Most LA I've dealt with are clueless.
    A lot of them still haven't heard of S24.
    Most LA exist in their own little bubbles impervious to what is occurring in the PRS
    All a LL has to do is keep up to date with all the info available to me on this site and others or join a LL Association.
    More than sufficient to keep a LL professional at mostly ZERO cost.
    Very few LL need to use a LA most of them do so through choice.
    L A are no more professional than LL whatever the type of LL.
    I can run rings round most LA with knowledge.
    Until formal LA qualifications are introduced that will probably remain the case!

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    Totally agree PB

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    • 16 July 2019 19:17 PM

    I know many object to the principle but I believe formal qualifications or CPD should be requirement of being a LL/LA/EA.
    Tenants have every right to expect that those who facilitate accommodation for them have formalised training.
    I also believe that all of these industry participants should be licensed but at a reasonable cost of say no more than £200 per property for LL over a 5 year period with all other licensing abolished.
    Tenants have the right to expect that are dealing with those who have at least attended formal training.
    As a barrier to entry for LL it would be no bad thing that before any new LL can let a property they need to undergo at least 30 hours of CPD.
    Of course BTL lenders wouldn't like that as I can guarantee than once a prospective LL has undergone CPD training many will be deterred and not bother becoming LL.
    Which is the last thing that lenders would want!!!!
    Very few newbies understand the true horrors of the PRS though the recent TV programmes have given valuable insights into the horrors that await the PRS LL


    I would go along with a compulsory exam to ensure landlords knew what they need to do, but not having to sit in a room or undertake an online course that goes at the speed of the slowest on the uptake - been on too many of these when I was an employee!

  • PossessionFriendUK PossessionFriend

    Sorry can't agree with Licensing, a punitive money raising exercise against the majority of Good Landlords.
    ( Rare that I disagree with you though Paul. )

    • 17 July 2019 16:16 PM

    I would qualify what I state.
    The cost for a licence should be no more than say £200 per property every 5 years.
    It should also be able to be paid over a 5 year period.
    At least then it would not be seen as a money making exercise for Councils.
    For a licence all a LL would have to provide is
    CTL letter from any lender for the tenant types currently occupying.
    This can be checked on by the Council to ensure that no HB tenants are occupying if lender conditions prohibit them.
    Correct LL insurance to cover the tenant type occupying
    Copy of the AST
    That should be enough to end about 1 million tenancies as LL won't be able to comply with licence conditions.
    If a rental property is sold or stops being let on an AST then no further payments to be made for the 5 year licence.
    Just these simple requirements will remove many of the rogue LL.
    Of course many rogue LL won't consider themselves as rogues but just letting to a HB tent on £1 of HB still makes the LL a rogue LL if lender conditions prohibit HB tenants.
    Licencing will detect all these rogues forcing many LL to boot out HB tenants or risk having mortgages called in.
    I would also have it that the Council could inspect without notice any licenced rental property.
    Any property without a licence would obviously be an illegal letting which the council would shut down immediately once they know about it.

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    Get a licence after completing questionnaire and then pay a min £100 which is far to much for our theiving clueless councils.

    Suzanne Morgan

    I have to have a license which is the law in Wales. The exam certainly was not a questionnaire . It was months of revision and I had to do it online as I was unable to get to the venues which were designated for the purpose. It is a license which lasts 5 years so not sure if I have to sit it again or will just have it renewed at the time. It was also time restricted so one does not have all day to sit and flip through notes when sat in front of the computer screen. It also cost me a lot more than £100 to be registered with Smart Rent Wales. I have a file as thick as an old telephone directory of downloaded legislation and information which I need to understand what being a Private LL entails.

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    Good Heavens it’s costing us about £1’000.00 more than that already in West London / over £1k plus £30 per habitable room, including your living room. Plus all the works costs

    • 17 July 2019 16:44 PM

    That is the point such schemes should be abolished with a simple cheap licencing process to replace what are in effect money printing schemes for councils paid for by the LL.

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    My point exactly

  • Simon Shinerock

    Hi Everyone
    I’d like to respond to the negativity here with my point of view as the owner of the business, a business I founded over thirty years ago and the originator of this and other innovative ideas. Firstly, I realise using a Lettings agent isn’t for everyone. I also realise there are some landlords doing a great job on their own, they find good tenants, achieve market rents, provide a great service, are fully compliant and experience few problems. However, there are also Landlords who make a mess of things, end up in trouble and cost themselves a lot of money and heartache. Other Landlords just don’t want the hassle and would prefer to use an agent, it takes all sorts and our business is aimed at those Landlords who want to use an agent and are prepared to pay a decent fee to get a good one. That said, it is also true that on a macro level, Landlords who let themselves on average get less rent, experience more voids, make more mistakes and have more disputes that cost them money than Landlords using a Lettings agent. This makes perfect sense because it reflects the overall experience of all do it yourself projects, some do brilliantly but many don’t and on average professionals do better. From my point of view, as a Landlord myself, I have never ever even considered doing it myself, even on properties out of my area, I always use an agent and I never haggle about the fee because I want them motivated to do me a great job. I adopt this approach when selling as well because I know from experience that price is what you pay and value is what you get. As I say though, there is room for all sorts, we should be prepared to see one another’s points of view without getting rude, aggressive or defamatory. Which brings me to some of the comments above which are clearly way over the line, calling the ARO a scam for example is wrong, ignorant and indefensible, as well as being against the posting guidelines of this site. Agents have charged 15% plus vat for as long as I can remember, yes discounts are given, we have been front runners at this and Tenants were made to pay as the business got more competitive but 15% plus vat has always been the standard for full management and believe me it does not result in an unfair profit, far from it, the margins in this business are very thin, more so with the tenant fee ban. The ARO is actually stupendous value, no more than the cost of a personal loan with full property management and rent collection thrown in. Of course we don’t discount when we offer the ARO, we don’t have to and why would we, the capital has a cost and we are a business after all. So please consider your ill considered posts and delete them or apologise if they are over the line. If you don’t you may soon find you need to find another forum on which to post your ill informed negative nastiness

    • 17 July 2019 18:13 PM

    You are of course totally correct that there is a place for LL and LA to manage.
    There is no one way to manage letting properties.
    BUT and this is a big BUT LA have no more qualification s than a LL.
    So high charges cannot be justified.
    Once qualified a LA can more easily justify their fees.
    When fees are charged there is usually an understanding that those charging fees have experience and qualifications.
    There are NO barriers to being a LA which is scandalous to say the least!
    Any Johnny come lately can set up as a LA.
    It would actually be in the best interests of LA to formalise their knowledge and experience with formal CPD or qualifications.
    Anyone who uses a bus or coach now has a driver who has been required to undergo 30 hours of CPD training.
    This has to be done at least every 5 years
    It is only 5 days in 5 years.
    Hardly onerous.
    LA should be required to do this.
    But I also reckon LL should undergo similar.
    Before any new LL is allowed to be one a licence should be required which would include 30 hours of CPD training.
    It is highly likely that having undergone the CPD training many prospective LL won't bother becoming one so put off will they be by all the risks if being a LL!!
    They will have learnt this from the CPD training

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    Ok SS clearly your upset but dont be. You run a Busieness a Business which has been charging what i consider excessively high fees. Thats my opinion, not wishing to offend. Good luck to you.

    Simon Shinerock

    Than you Steve. As I say, I have no issue with polite opinions, I encourage them, we all see things our way, it would be boring if everyone thought the same way


    My agent charges me 10%, there are some in my area charging as little as 7%, 15% is way over the top.

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    • 17 July 2019 18:47 PM

    Yes it might be a. a bit of a pain to do what you have been required to do.
    But surely it has been no bad thing. Had you been required to do this BEFORE you attempted to become a LL it would surely have assisted you in what you determined to do to enter the PRS as a LL.
    I speak from very personal experience.
    I wish it had been a requirement back in the day for such CPD training to have been COMPULSORY.
    I would have made far fewer mistakes and would have saved hundreds of thousands of pounds of losses.
    Training LL to have a reasonable understanding of what they are getting into would be no bad thing.
    RSW is at least an attempt to achieve this even with all its flaws.
    At least it is something and goes some way to address the paucity of knowledge amongst many LL.
    The training is a bit of a fag but can be very enlightening.
    I've done the CPD training as a PSV and HGV driver and it wasn't onerous at all.
    OK 5 days of my life I will never get back but there are sometimes obligations you have to meet if it has been decided it will be so.
    So in principle I would have no issue with a RSE.
    Tenants expect their LL to know what they are doing.
    Hardly an unreasonable expectation!

    Simon Shinerock

    Paul, replying to your comment on my post. I agree it’s hard for a LL to choose a good LA at the moment and I would welcome sensible regulation but and it’s a big one, I went through regulation of Financial Services and it was an utter mess and made things worse

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    • 17 July 2019 19:05 PM

    Yep I guess as you suggest you experienced a nightmare with the way training was delivered.
    I would suggest that those who have been long experienced in delivering all sorts of training be co-opted to devise a syllabus suitable to meet Govt minimum requirements
    In the case of LA I suppose ARLA as the main deliver of CPD training springs to mind.
    Though I am sure there are other options.
    It is just one that springs to mind to someone who doesn't understand what LA have to do
    I know what I must do as a LL but am not sure about what a LA is required to do.
    Just because in the past training delivery wasn't very effective us no reason to say it will always be so.
    Govt clearly wants to professionalise the whole PRS.
    It would be far better if all those involved came up with some effective self training before Govt imposes it.
    At least with the industry participants they can make a case for their developed training which Govt would probably acquiesce to.
    Make it conditional as part of the ability to trade and then everyone will seek training.
    Trading Standards could police the situation.
    At least this would get Govt off the PRS back.
    If nothing is done then Govt will impose training on PRS participants in the near future.

    Simon Shinerock

    It’s a mine field for sure. What we need is akin to good civil engineering where we create a bridge that just stands, elegant, minimalist but totally functional

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    • 17 July 2019 19:19 PM

    Rather than reinventing the wheel are there any good practice examples in other parts of the world which could translate to the UK market?

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    I am not going to knock Agents they are suffering enough with the stupid fees ban. They employ huge numbers of young people just starting off in working life & their livelihoods put in doubt by rogue regulators, they provide a service & should be entitled to charge a fee, it’s up to the renter if they wanted to use the service or find their own accommodation but if they chose to avail of the service then it’s only right to have to pay for it. We already have too many fee loaders who expects everything for nothing.

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    Regarding, Continuing Professional Development brownie points I’ll pass on this one. Having been a LL for over 40 yrs & able to do everything myself whether Refurbishment or building a House from scratch by my own hand until now when they changed all the rules to render me useless so it’s taken me over 4 decades to become an incompetent LL. Congrats’

    • 17 July 2019 19:49 PM

    I think you are the classic example of where 'grandfathering' would be applied.
    So you would be granted a licence without any further requirements for at least the next 10 years.
    That should see you out of the game by then!
    LL like you are clearly not the ones that need the CPD training.
    I've only been doing things to a far lesser degree than you and I am sure CPD would benefit me.
    I'm sure there ISN'T much you don't know so it would be a bit pointless targeting LL like you.

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    • 17 July 2019 19:40 PM

    Indeed but you still want to know they have appropriate knowledge before you pay fees.
    Paying fees to any johnny come lately is not a good idea.
    Formalised training would give greater confidence to users of those providing services.
    Paying fees is a choice but those paying have the right to know that those providing services have formalised qualifications.

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    Yes I agree with you they need education & formalised training, like I tried to give my own children with uni degrees etc, but there is something else missing their minds seemed conditioned to think the same, of Course the Town was built by great craftsmen
    when the only Certificate they had was a birth Certificate amazing that isn’t it, it’s my opinion this generation with all the education, laptops & iPhones / digital everything wouldn’t hold a candle to them & got no State help.

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    • 17 July 2019 20:42 PM

    I don't believe any training needs to involve any creative thinking.
    Most PRS regulation is formulaic.
    Training is just required to manage this.
    It is not degree level stuff.
    Not even O Level stuff.
    Highway Code level.
    A CPD syllabus could easily be devised to facilitate knowledgeable LA and LL.
    You don't need the Brain of Britain to deliver competent services to tenants etc.

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    I'm what we called a professional LL. Carry out our own Inspections/Check Outs/ chasing any arrears within half an hour of not recieved in my bank account, deal with issues within 24 hours. Interview new tenants when LA has not found under a Tenant Find only. Create TA, carry out Right to Rent. Formed RTM on several blocks. The list is not endless.
    I have FPC123, CeMap. Commercial Bank training and Managing. Introduced First Female Rep into Banking Finance industry in the 80s, managed over 100 properties at same time and 100s more overr some 35 years or more. So yes know how to operate as a Professional LL.

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    Very good a very impressive record indeed. I just hope some other LL’s I know with 100 properties who have been skyting the Deeds for yrs haven’t caused S24 surely they have. Buy one property then get it revalued after 6 months
    take equity out to put on an other & so on, used to be totally tax efficient. Two things happened Woolwich started buy 2 let Mortgages instead of Commercial loans. Bank of England reduced Base rate which used never be below 5% so we were paying 8/9%, they kept reducing Base rates to one quarter %. This ment in effect they abolished Savers altogether, they were left with saving disappearing & had to do something so they brought property that they didn’t want or necessarily need all bidding against each other driving
    prices through the roof

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    • 17 July 2019 21:37 PM

    I think for every knowledgeable LL there is an idiot LL.

    It is the idiots that need the CPD training.
    I include myself in this category as there is probably no doubt that I could benefit from CPD training.
    Having never undergone any form of training I would not be arrogant enough to suggest I know it all.
    Far from it which is why I consider I would benefit from CPD.


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