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I did something similar with Edinburgh Council - they offered leases of 3 years. Slightly less than market rent but no voids - it worked well.
I am no expert but i approached a broker (i am unsure if the forum allows me to name them) - and gave them the facts and got them to come back with some lenders who found it acceptable - and there were a few. 3 year leases tended to be the max at the time but this may have changed. The lenders only concern is getting their money - and the only issue they had was that they required a clause in the lease contract which said that if i defaulted on payments, the lease could come to an end. my experience is that the bigger lenders are scared of anything outside what they perceive as the norm. But these schemes are more and more prevalent and some lenders are ok with them. My initial stance was "how can they not grasp that it is guaranteed rent - its a no brainer" - when i spoke to a couple of lenders, their stance was "it may be a no brainer to you - but we don't know if you are going to default for whatever reason - and if you do, we need to get the property back - and if the lease doesn't allow that then we cant lend"
I do see their point
Northwood* has been offering guaranteed rent for over 20 years and they have over 13K landlords using it. They work with the Property Ombudsman, Trading Standards, and other regulatory bodies to ensure that their commercial arrangements are compliant.If in doubt, speak to your lender about it for clarification but it has proven to be an excellent and trusted solution for many thousands of landlords over two decades and I am sure your local Northwood office would be pleased to answer any questions you have in this regards.*Northwood are the lettings partner of Property Tribes.
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
I had a horrendous experience with Northwood in Glasgow. They were basically putting any tenant in the property. I had them manage two of my properties. Both were wrecked by the time I got them back and in one case my husband was physically threatened by the ex-tenant watching the property and waiting for him. Northwood to get off the hook would blame the landlord rather than their shortcomings in managing the property. They were obviously housing problem tenants but not making the landlord aware. Almost put me off being a landlord for life.
Hi Louise,I am sorry that you had such an experience and it does depend to some degree on each individual office.If Northwood are guaranteeing the rent and using factoring to make a small margin, it seems counter-intuitive for them to put "any old tenants" in a property. They almost have to have even stricter criteria for their business model to work. However, I am sure there are a minority of occasions when it doesn't work out, and you should let Head Office know of your experience as I am sure they would wish to address it with you and the Glasgow office.
Please Vanessa do not insult my intelligence. I am a 56 year old landlord and developer with 30 plus years experience. You are denigrating the integrity of this site by blatantly endorsing your preferred supplier. Anyone with any common sense will be able to understand your response.
Hi Louise,If that is what you thought, I sincerely apologise. I used NW GR myself about 6 years ago (High Wycombe office), and did not have any issues with tenants or the service, so was speaking with my landlord hat on. I wasn't endorsing them, just trying to bring clarity to their business model and that each office is an independent business and responsible for their own activities.On that basis, it would be prudent to check the reviews for each individual office.Again, sincere apologies as it was never my intention to insult your intelligence. All feedback is welcomed as it helps landlords make decisions and also brings clarity to business models. It also assists PT partners in improving their proposition.
Oh I understand now where you're coming from. I have been rather naive in responding to your post for "help". Seasoned users of this forum will no doubt be rather amused. I'm a newbie to the site and it shows. Vanessa's response did give the game away and your support has kicked the ball well and truly into the net. Yes indeed contributors will be able to use their own intellect to assess whether someone is pushing an agenda. Thank you for reminding me that sharing one's experience must be done with caution and reserve.