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  • Buy-to-Let

    German model of renting in the UK?

    A thought experiment.

    The standard practice is Germany for long term rental is to rent a shell, and T supplies kitchen and bathroom (and carpets?).

    Given that we and our tenants are just being .. er .. fooked over by another crazy set of rules wrt fees and prevention of recovery of legitimately incurred costs, and the Housing Department appears to be run by a person from the planet Zarg with all the intelligence and sense of a lobotomised sea-slug, how close can we get to the German practice as a way of eg minimising Deposit issues etc? 

    I can see a well-insulated shell (say an EPC B or a C which is OK but not great) with:

    Electric only heating - either ASHP plus UFH, or storage.
    Good quality double glazing.
    Either a robust floor - eg porcelain tiles, or floorboards with no covering.
    Electrical wiring, sockets etc.
    Minimal kitchen for mortgage / habitable - which I think is water, sink and cooker.
    Loo.
    Electrics.
    Tenant decorates.

    The ability to save on the costs of replacement kitchens + bathrooms + carpets looks attractive for rent reduction and risk reduction.

    This is basically the same strategy as people who have given up on Deposits due to the red tape, applied to teh property itself.

    It may not make much difference in eg London, but for rentals in normal areas to below-average-income-but-above-benefits, it could be a difference which could make some rentals viable, whilst avoiding some of the abusive regulation / unnecessary risk.

    What else is required by law, and how far can approach this go in the UK?

    Ferdinand

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    can't imagine any tenant renting in shell condition.

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    I don't think you'd get away with no bathroom.  I'm not up on the legal aspect but surely bathroom facilities are required?  I live in France and only let my ex family home in the UK.  In France it's normal for a tenant to supply their own kitchen but it's a legal requirement for there to be a kitchen sink (that's all that is required in the kitchen) and washing and toilet facilities, so toilet, sink and shower or bath. Are you sure it's not a requirement to provide an equipped bathroom in Germany?

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    I don't know much about the German model but what you describe is very close to a commercial FRI Lease.

    From my basic understanding this is possible on a residential letting where the term is longer than 7 years. (Any less is subject to the AST and The Landlord and Tenant Act 1985)

    This may not be useful for the general market, but it may be attractive to those that have taken succession planning advice and decided to rent when they receive a pension.


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    I’m sure I couldn’t let my properties without kitchen and bathroom in the UK.

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    I've lived in Germany and what you get offered is plain white painted rooms that must be returned this way, a tiled fitted bathroom and a kitchen with some units and counters but no cooker. I've never rented long enough there to know what happens if a bathroom gets to the state of needing to be replaced, mind.

    There's a bit of a myth that all Germans are happy to rent forever. Not really true, the middle classes often buy or keep an inherited property as they approach middle age. Many rent in Germany and own a nice holiday home in the Med. The German model works because rents have traditionally been so reasonable for the sq. m you get that it is affordable on wages as you are in your 20s and 30s with enough spending cash left over. The UK seems unable to sustain such a model.

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    I lived in Cologne for 5 years and I don't remember ever seeing an apartment that didn't come with finished flooring of some sort (carpet, laminate, tile, etc) and a fully fitted bathroom.  Kitchens however, were a different matter.  They were usually nothing but a kitchen sink and a socket for an electric oven/hob that must be fitted and certified by a professional.


    Some advertised with a fitted kitchen but the rent was more expensive as a result and often snapped up pretty quick.  It used to be that if you moved out, you had to paint the apartment white again (including the ceiling!) before you left.  If a new tenant was already lined up to take the apartment, often the old tenant would offer to sell the kitchen for cheap or give it to the new tenant FOC in exchange for the new tenant painting the flat.  But the law changed so that painting the flat only became the tenants responsibility if they lived there for more than 5 years I think.


    Being realistic, who takes a fitted kitchen with them when they move flats?  Odds are it won't be the right shape anyway and it would severely limit prospective new tenants in the UK.  I think the only realistic way is to factor in wear and tear of fitted units and flooring into the rent and accept that it's an unavoidable cost of being a landlord.  End of the day, if you have good tenants that live there a long time, you've made considerable income from rent anyhow and squabbling over a few hundred pounds is just greed.  Like my last flat in Germany, I paid over €40k in rent during my time there.  I'd be quite annoyed if my landlord was like "the flooring looks a little worn and needs replaced, I'm taking a few hundred off your deposit" after all that time.  It would be akin to a tenant saying "the boiler is too old and costing me more on gas.  I'm deducting it from the rent".


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    Thanks for the replies to this.

    I am just throwing ideas about to cope with the side effects of the tenant Fees acts - eg the 40% reduction in max. deposit. I can see the advantage in simplicity of managing deposits over long term tenancies - say 5-10 years.

    It is a bit like my dog-tenancy approach - ideally I give T a week or rent free, and they are responsible for decor and perhaps carpet. That means few arguments about normal pooch damage, as it is Ts paint not mine. Much easier. If the carpet is 5 years old it is depreciated to nothing anyway, so not an issue.

    In Germany the type of tenancy I am referring to is quite common. You would either supply your own kitchen, or buy the one from a previous T. Typically it could be free standing units not fitted. Ikea do some such ranges. I found this, which is funny:

    We Germans are really weird sometimes. As I moved about ten times in the last 12 years I always had the luck to rent an apartment with kitchen. Sometimes I had to buy them from the previous tenant and resold it to the new tenant. But a friend has now two kitchens because there was one in her new appartement and the new tenant didnt want to buy the other one as they already owned one.
    https://www.goseewrite.com/2011/05/the-o...-kitchens/

    For the UK, I think one approach could be to supply a utility room with a sink, cupboards and Baby Belling - if that meets HHSRS, and perhaps a downstairs cloakroom with shower.

    I must open a conversation with my Council as to how they see it.

    Again, thanks all.


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