Month: July 2019

Renting – what do you think about it?

Lesley Davis Leave a comment

Despite all the bad press that renting often seems to attract, most people are happy with their rented home and have no complaints about their landlord. This is the good news for the rented sector from the latest English Housing Survey Private rented sector report, published yesterday.

Private rentals are the second biggest housing sector in England. The government estimates the PRS at 4.5 million households compared to 14.8 million owner occupiers, with about one in five households in England renting their home.

Most renters are happy in their homes says the latest English Housing Survey

According to the survey, the vast majority (84%) of private renters say they are ‘satisfied’ or ‘very satisfied’ with their current accommodation, though satisfaction levels are higher among owner-occupiers (95%).  Private renters are also less happy with their tenure, at 69%, compared with 98% of owner-occupiers. In a country where owning your own home is a key aspiration for most people, this is not unexpected.

Compared with social renters and owner-occupiers, private renters spend the most money on housing. On average, they spend a third of their household income on rent. And there are no surprises in the fact that Londoners spent more on rent than people living outside the Capital. What is more unexpected is that despite the often high cost of renting in comparison to paying a mortgage – and the number of renters who receive Housing Benefit –  the majority of people polled said they found it ‘easy’ or ‘very easy’ to pay their rent.

And despite the difficulties of getting onto the house-buying ladder, more than half of private renters thought they would eventually buy a home – even though a sizeable proportion freely admit they have no savings. Younger renters were more likely to think they would eventually become home owners. But without any clear idea of how this might happen, this sounds more like the optimism of youth, rather than a sign of increasing affordability in the housing market!

Is it time to ditch licensing schemes?

Lesley Davis Leave a comment

Passports are fashionable in the rental sector right now. Last month we had deposit passporting and now we have the concept of a so-called rental property passport.

This is the suggestion of  Theresa Wallace, head of lettings customer relations at Savills and current chair of The Lettings Industry Council. Speaking at The Property Ombudsman Conference last week, she told delegates the passport “could rapidly improve the quality of accommodation and landlords, and would be far fairer than the slew of licensing schemes now in force”.

Could the idea of rental property passports signal the end of licensing schemes?

It would be based on the DVLA model which manages the details of almost 50 million drivers and 40 million vehicles. Letting Agent Today outlines how the passport might work.

  • Each rental property would have a unique reference number. These are already allocated to properties by the Land Registry;
  • Any property without a reference number would not be ‘official’, so may have been illegally converted;
  • Every advertisement for a rental property must include its reference number and would also include the equivalent of a ‘property MOT’ certificate to ensure it had passed appropriate tests. 

Delegates at the conference were told that Hunters have already successfully piloted the scheme and that the Lettings Industry Council has found a not-for-profit supplier who may be able to operate a PropTech portal. This would mean the properties could be quickly and easily viewed by the public and Trading Standards.

If you are a landlord – or a tenant – we’d like to know what you think about this idea, so do leave your comments below.

Looking forward to the flat of the future

Lesley Davis Leave a comment

Ever wondered what the flat of the future will look like? Laura Geode from American Proptech company Homebase has some interesting ideas. Most of them revolve around IoT or the internet of things. This means greater connectivity between the devices and appliances in our homes; something we will soon all take for granted.

First, says Laura, our homes will talk to us. Many of us already have AI assistants in the form of Alexa or a Google hub but this technology is evolving fast. For flat owners and renters, a digital concierge will soon be there to turn on your lights, rent a car from the block’s car-sharing service or find a film for you to watch.

The internet of things will transform the way we live

And what about fixtures and fittings? Laura predicts that from windows to appliances and light bulbs to locks, there will be dozens of IoT devices in each unit making them more user-friendly and energy efficient. Picture this: your refrigerator door features a screen showing a digital image of all the food inside of it. You click on the chicken breasts and a list of recipes appears, all based on the food you have in stock. Missing an ingredient? There’s a one-click option to buy and have it delivered to you in time for tea!

Developers are keen to take up this technology but Laura says it’s important to approach it correctly. Most properties that try to be “smart” start with installing IoT devices like thermostats and locks, she says. Instead, developers should start with property-wide wi-fi, Bluetooth, and sensors. This network infrastructure allows devices to work seamlessly together.

In America apartment blocks feature air conditioning as standard. In the UK this may be essential in future as global warming takes hold. So in order for a block air conditioning system to be as energy efficient as possible it needs to communicate directly with the lights, thermostats and windows in the building. That’s not possible without network infrastructure in place.

Above this, says Laura, will sit the building operating system. This means residents will be able to control all of their devices from a single app and property managers can collect building-wide data too. This data makes it possible to find ways to run blocks more efficiently and create a better resident experience. And if all this sounds a bit far-fetched, don’t forget that the 5G technology we need to make all this possible, is already here.

Finally, Laura urges block owners and managers – especially in the rented sector –  to constantly ask themselves “How can we provide more things ‘as a service’?” From dog walking to wifi, residents want to live somewhere that makes their life easier. Hospitality and block management are coming together. And that won’t stop anytime soon. 

Buy-to-let – where can you get the quickest returns?

Lesley Davis Leave a comment

UK rents are going up. According to new figures from HomeLet, rents have increased by an average of 13.9% in five years. The average rent in the UK is now £941 a month, – an increase of £17 – on the same time last year. Rents in June increased in all 12 regions monitored by HomeLet, led by gains in Northern Ireland, where rents are up 4.7% year-on-year.

Also, rental yields are at their highest level for two years, according to the latest Buy to Let Britain report. The average yield now stands at 4.5% – the highest rate since the first quarter of 2017.

Buy-to-let: where’s the best UK location?

Great news for landlords, particularly those with buy-to-let property. They are under increasing pressure from the government in the form of additional tax, property reforms and new regulations – with more to come in the next few months. So research from Benham and Reeves could be required reading for anyone thinking of investing in the BTL market in the near future.

The report looks at the best parts of the UK to buy your BTL property. It ranks locations on the time it takes to recoup the investment on purchase and stamp duty costs, based on annual rental return. Benham and Reeves say Scotland is the now best place to invest. They claim annual rent is repaying stamp duty and average property prices in just over 17 years.

Northern Ireland comes out second, followed by England and then Wales. In Scotland, buying a rental home in Glasgow shows the quickest returns at 13.3 years, followed by Belfast at 15.8 years and Aberdeen at 17.8 years.

In England, Nottingham and Newcastle show the fastest returns. And in London, Tower Hamlets is the best location, closely followed by Barking and Dagenham, Newham and Greenwich.

But making a good return on a rental property is complicated. There are other things to take into account. Contingency budgets, capital growth and the impact of gentrification or other types of development on the location you choose must all be considered.

What this research really shows is that BTL isn’t the best way to make a fast buck. It’s a long term investment that needs careful thought. With so much changing in the market, only those who are prepared to stay the course – and understand the obligations and responsibilities of providing homes for tenants – should think about putting their money into rental property.

Deposit passporting – have your say

Lesley Davis Leave a comment

In June we blogged about the idea of rental deposit passporting. The idea is to make it easier for renters to transfer deposits directly between landlords when moving from one property to the next,

Housing Secretary James Brokenshire MP has now announced a Call for Evidence on tenancy deposit protection in England that, among other things, invites views on passporting.

Deposit passporting – what do you think?

The government hopes to get a better understanding of the problems tenants face in providing a second tenancy deposit when moving from one tenancy to the next. It is also searching for ways to speed up the return of deposits to tenants at the end of their contract. The Call for Evidence will look at whether current thinking on making deposits affordable are meeting tenants’ needs and whether the market can offer improved products.

The results from the Call for Evidence will help the Tenancy Deposit Protection Working Group. This is looking at whether improvements can be made to deposit protection to the benefit of tenants and landlords. ARLA Propertymark is part of the working group – which has been running for the last 12 months. ARLA supports the idea of moving deposits between tenancies. But it says any solutions that the government comes up with must consider the interests of all parties.

“For deposit passporting to work, we need to ensure that both the outgoing landlord’s deposit can be used if needed, while the incoming landlord has certainty they will get the full deposit they have agreed by the tenant,” said ARLA this week.

“Affordability for tenants of any bridging loan or insurance policy will be key if deposit passporting is going to be a workable and affordable solution for the future of deposits.”

So if you are a landlord, a property manager or a tenant with strong views on how this could work in future, you can download the Call for Evidence and have your say by email to DepositReform@communities.gov.uk or online by 5 September.