Here’s a shocking story we’ve just spotted in Letting Agent Today. It illustrates exactly why at Ringley, we have been campaigning in favour of keeping the so-called no-fault eviction process known as Section 21. There are rogue tenants out there and there must be an efficient process in place for landlords to evict them when necessary.
Landlord David Wright, who owns a property in Warrington, was recently left with rent arrears of around £29,000 by one of his tenants. When he finally regained possession of his rental home, he had to spend £2,000 on clearing the property of rubbish and waste. He faces a further bill of thousands of pounds to repair the damage that the tenant caused to the property.
According to the press report, the house was coated in grime and mould and littered with half-eaten food containers, pet food and medication. Many of the fixtures and fittings, including the carpets, were damaged beyond repair. No one should have to put up with this when all they are doing is trying to make a living by providing a home for someone in good faith.
Legal for Landlords, the law firm representing him in gaining possession of the property, does not think the landlord is likely to recoup the rent he is owed. Sim Sekhon, managing director of the firm says “This case illustrates why plans to abolish Section 21 are so dangerous for landlords’ rights…. It’s vital to have a robust legal mechanism in place to reach a resolution in a timely manner.
In fact, a Section 8 notice was used in this case because of the amount of damage caused and the extent of the rent arrears. But, as Sim points out, there are plenty of cases where that wouldn’t be appropriate. “Section 8 alone doesn’t have enough teeth to protect the landlord and, for many, it’s frankly a terrifying thought that this outdated legislation is all they may have to protect their interests”.
We want to see positive change in our industry – read on to find out more
In a week when all the political parties are setting out their stalls and manifestos are popping up all over the place, at Ringley we have taken the time to produce one of our own.
Yesterday, we blogged about the changes in the industry that ARLA and the NAEA want to see taken up by the new government. Today, it’s our turn. Despite moves to reform both leasehold and the rental sector, there is still a long way to go to ensure that landlords, tenants and flat owners get a fair deal. So here is how we think our industry could be changed for the better.
IF a house has to be sold leasehold, ban ground rent on it. We accept that Crown land may require leasehold sale, but there is no excuse to burden house owners with ground rent and leases of less than 999 years. BUT Don’t ban ground rents on new build flats or set them at zero. If freeholders have no income to gain from their leasehold properties this could lead to an abdication of care and the potential to take no interest in the condition of the buildings, health and safety or compliance issues. None of this would benefit leaseholders.
Change the qualification criteria for freehold purchases, to ensure that all buildings can legally qualify for a freehold acquisition by the leaseholders or the Right to Manage process.
Give houses the opportunity to challenge estate charges. Like apartment leaseholders, house owners should have the right to challenge unfair charges at the FTT. AND Introduce Right to Manage for houses on estate developments.
Hurry up the New Homes Ombudsman scheme to ensure that owners receive transparent and fair treatment.
Regulate how client money is held. Too many letting and managing agents are not subject to RICS checks which, for example, require a three-way bank reconciliation and client balances to be proven monthly.
We would also like to see a whole tranche of new legislation to right the wrongs that, we as property managers, have to deal with every day:
make reserve funds mandatory to overcome the problems suffered by thousands of blocks with inadequate leases. Scotland does it, so why can’t we?
make it easy for leasehold blocks to make environmental improvements. Currently, most cannot, simply because the leases as drafted do not allow improvements (see our blog on solar panels here)
make RTM costs recoverable as service charge expenditure. That they are not, simply because these costs were never drafted into leases and are therefore the fact that they remain recoverable only from RTM members, is just unfair.
make the right to manage transferable – a share in the freehold is transferable – why can’t an RTM be transferable too? The never-ending process of trying to recruit new RTM members is draining.
legislate so that blocks that have not had major works for sometimes 50 years+ are then not frustrated from collecting the money desperately needed by the Garside case requiring them to collect slowly. Either the owners have benefitted from buying flats cheaply (because the block was run down) or they will have saved spending any money for years.
And finally…Grenfell has been in the news this week as the inquiry has started to report its findings. In the wake of the fire and the questions it has raised about the safety of our blocks, leaseholders should not be paying for the removal of flammable cladding. They were not responsible for choosing the construction materials for their block and bought their properties in good faith. The government could have banned these dangerous materials when Europe and the USA did – if you allow it to be sold, you should fix your mess!
There are an estimated 4 million people in the UK living in leasehold properties and, according to the English Housing Survey, 4.7 million more rent their homes from private landlords, plus all the many block managers, property agents and suppliers that keep the sector running smoothly. That’s a lot of people whose lives are affected by government policy on property on a daily basis. And a lot of votes.
Our message to politicians is that they should give that fact due consideration when they are campaigning in constituencies around the country over the next few weeks.
Its election time again. Love it or hate it, most of us have some idea of what we want from a new government – and the property sector is no exception. This week, Letting Agent Today published 13 key demands from ARLA and the NAEA. Both organisations want the next government to intervene in the industry in a big way.
Here’s
what they set out in their manifesto:
Regulation
of property agents – The new
government must commit to regulating property agents and take forward the
recommendations of the Regulation of Property Agents working group chaired by
Lord Best.
Abolish the 3% surcharge on additional residential property – This policy has contributed to a stagnation of the private rented sector, which is now the second-largest housing tenure after owner-occupiers.
Property
MOTs – An
annual MOT of rental properties should replace existing discretionary licensing
schemes. It would improve enforcement, and give landlords a steer on how to
maintain or improve conditions for tenants.
Exempt
downsizers from stamp duty or give them incentives to encourage them to move – Pensioners wanting to downsize
to a smaller home should be exempt from paying stamp duty; more specialised
homes should be built for older people, and the Government should introduce
over-65s bonds for downsizers.
Court reform
– Introducing
a dedicated Housing Court for England and Wales would considerably cut the time
taken for a landlord to gain possession of a property and will make the process
more straightforward for all parties involved.
Digital
logbooks – To cut down the number of failed property transactions and speed
up the process of property buying and selling, the government should introduce
a digital property logbook to allow for a more interactive, streamlined and
transparent process for both home buyers and sellers.
Legislate to ensure developers remedy leasehold agreements containing onerous clauses – The next government should legislate to ensure that developers help those affected. This would encourage mortgage lenders to lend to buyers of these properties and promote the sale of existing leasehold properties.
End the Local Housing Allowance cap and improve how Universal Credit operates – The continued cap in Local Housing Allowance must be lifted to accurately reflect the cost of renting. Also, tenants should be able to choose whether the housing element of their Universal Credit is paid direct to their landlord. The new government should introduce the option for Universal Credit to be paid twice monthly to assist with budgeting.
Open up the database for rogue landlords and property agents – Access for tenants, agents, and regulatory bodies would make the database a stronger deterrent to rogue operators and would allow agents to vet potential employees, limiting rogue individuals from moving into sales from lettings.
Review
landlord taxes – Investment is falling due to the phasing out of tax relief
on mortgage interest for landlords, the additional SDLT surcharge on buy-to-let
property and the repercussions of the Tenant Fees Act.
Introduce new regulations for short term lets – Left unchecked, Airbnb is likely to have a bigger impact on the wider lettings market. As Airbnb grows, and more legal requirements are placed on letting agents and landlords, it could take more properties out of the private rented sector because the returns on short term lets are potentially more lucrative and there are fewer regulatory requirements.”
Help the
Private Rented Sector with energy efficiency and climate change – The Landlord’s Energy Saving
Allowance (LESA) should be reintroduced and extended to include anything
contained within the Recommendations Report of an Energy Performance
Certificate (EPC).
Extend
Flood Re to the leasehold and Private Rented Sectors – An estimated seven million
homes remain excluded from the Flood Re insurance obligation, including 1.1m
leasehold homes and three million homes in urban areas.
Do you agree with these demands? What would you like to see the new Government do to help the property sector?
We will be setting out our own Ringley wish list in a future blog but in the meantime, leave your comments below. We would love to hear your views.
Manchester is the best place in the country to rent a new build flat says Homeviews
A BTR development in Manchester has topped the polls in a new report that rounds up residents’ reviews of their rental homes. More than 100,000 people around the country now live in a Build to Rent (BTR) apartment building. Initially, the sector was focused on London but now the regions are picking up speed both in terms of completed developments and projects in the pipeline.
HomeViews publishes resident reviews that give the developments they live in a star rating out of five across a range of categories. These include facilities, design, location, value and management. Homeviews has just published its latest report, rounding up more than 5,000 reviews from tenants living in 84 BTR and 438 build-to-sell developments across eight UK cities. The message for BTR developers and operators is a positive one: new build developments are delivering for tenants with more than two-thirds of BTR developments getting ratings of more than 4 out of 5. So what does BTR have to offer that is resulting in such great reviews?
Residents talk positively about communication, reliability, personalised service, kindness and – parties! Being pet-friendly, having a concierge and gardens, as well as gyms and parking got top marks from tenants. It’s also clear that customer service and good building management really matter. Management isn’t perfect, with 10 of the 84 developments receiving a management rating of 3 or below. However, 26 developments are delivering an incredible building management service and have been rated 4.5 and above. These include schemes managed by Allsop, Essential Living, Fizzy Living, Way of Life, Greystar, be:here and Legal & General.
BTR management is being handled in different ways – from apps, third party suppliers and building managers all called ‘Bob’ – presumably to make them easy to remember! What is clear is how passionate residents can be about the management team on site. The people BTR operators employ appear to be their greatest investment and it is paying off.
The Trilogy in Manchester tops the list for the highest-rated BTR development in the UK and the city boasts three of the top ten rated schemes. The Cargo Building in Liverpool came in second, followed by Dressage Court, Sailmakers and Vantage Point in London. Schemes in Birmingham and Newcastle also made the top ten. When comparing the average ratings and scores from BTR tenants living in the regions to London, the regions scored higher on every rating.
The US rental market is already familiar with the power of reviews with 70% of renters deciding to visit a property with a higher reputation score and 73% saying reviews affected their decision to rent.
The UK BTR sector is growing at a faster rate than anyone predicted. Earlier this year Savills reported that by the end of Q1 2019, there were more than 140,000 BTR homes complete, under construction or in planning. This marks a 22% increase from 2018 and is a figure 13% higher than identified at the end of Q1 last year.
To find out more and to download the Homeviews report click here
The
Old Kent Road is probably best known for being the first and cheapest square on
the Monopoly board. But it’s a road with a long and interesting history,
starting with the Celts and then forming part of Watling Street – a Roman Road
stretching from Dover to London and then up to the Midlands and across to
Wales.
In recent times the area has become a hub for industry and transport with its odd mix of new council housing estates, retail warehouses and a traffic hub in the shape of the Bricklayers Arms junction and flyover. Burgess Park, now one of the largest parks in South London, provides locals with some much-needed greenery.
There are now plans for an ambitious regeneration of the area that could rival – or even improve on – the redevelopment of the nearby Elephant and Castle. The proposals for the Old Kent Road are ambitious: three new Tube stations on the Bakerloo Line, a new town centre, 20,000 new homes, 10,000 new jobs, two new primary schools and a new secondary school; all to be developed over a 20-year programme of investment.
There are already 43 new residential or mixed-use developments either recently built, under development, granted planning consent or in the pipeline, providing an estimated 8,000 new homes. New homes developments on the Old Kent Road can expect to command values of £700 to £800 per sq ft.
One new development on the site known as Ruby Triangle, will be delivered by property developer Avanton. Sky Gem Tower London phase 1 has just been given planning permission and will provide 1,152 new homes across five new buildings. There will also be a new community sports hall and fitness centre, new open space including a public park, flexible commercial space including incubator workspace and studios for local entrepreneurs.
As a known name in Build to Rent in both London and the North East, Ringley is delighted to have been chosen as operator for the Ruby Triangle scheme. Avanton aims to deliver homes where tenants want to stay, wıth options to trade up or down within the development, building brand loyalty with renters. With more than 20 years’ experience in residential management, we will have a key role to play.
While we are waiting for the Ruby Triangle scheme to be ready to rent, we will be using our knowledge of the rental sector to provide Avanton with strategic advice and working with them to plan each resident journey to deliver a lifecycle-led offering. We will also be recruiting and training on-site staff, building up to full operational asset management.
We will be blogging about the scheme again as it starts to take shape, so watch this space. And if you live in London, keep an eye on the Old Kent Road. It’s all change from now on.
We all understand how important it is to keep tenants safe in their homes. A useful article in Landlord Today, written by a health & safety consultant, points to the key issues for landlords. With the Grenfell inquiry on-going, fire safety is top of the list, followed by compliance with electrical and gas regulations. As the article says, landlords have always been expected to maintain rented homes to a reasonable standard, and current health and the safety rules give clear guidance as to what is expected.
However, health and safety legislation isn’t static – and keeping up with changes can be a major responsibility, particularly if you have a portfolio of different types of property, all of which may require compliance in a slightly different way. For example, the rules that apply to HMOs are not always going to be the same as those for a block of flats or a buy-to-let home.
Across the board, effective compliance means ensuring your properties, their fixtures, fittings and appliances meet the regulations and that any work has been carried out by registered or qualified professionals. But it is also important that landlords retain evidence to prove they have done what they were supposed to do.
This can be complex and time-consuming and is why Ringley has developed a solution with landlords in mind. Our PlanetRent app makes it really simple to organise your health & safety compliance and to know what safety checks or certificates are missing or expiring soon.
This is
how it works:
First we will need some information about you and your property.
Next, upload the documents as you find them OR use our bulk import tools.
Then while you make a cup of tea – we’ll map all the PDFs to the correct properties.
It’s that easy.
Also, we will save you even more time and money because every time you upload a document we will send it to the tenant, and, if you are an agent we will send a copy to your landlord too!
It’s free, so why not take a look at the PlanetRent website to find out more and download the app today.
The average deposit costs renters around £1,110. And this sum is often doubled due to delays while tenants try to get their previous deposit back. This leaves a third of renters having to pay a new deposit before they had received their previous one. According to Which? this means almost half of renters having to take out loans to cover the cost of their deposit when moving home. The consumer champion found that 43% of tenants planning to move to a new rental property had to use a credit card, loan, overdraft, or borrow cash from friends and family to pay for the deposit on their new home. The government now accepts that tenancy deposits are a problem and recently published a call for evidence.
More than £4bn of public money is locked up in deposits across England and Wales. So property pundits are now calling on the government to embrace tech solutions to help solve the problem. Ideas for change include:
Tax incentives to landlords who opt for alternative deposit solutions
A central clearing system to manage all tenancy agreement transactions
An independent adjudicator to settle disputes between landlords and tenants
Ringley has been looking after landlords and their tenants for more than 25 years and created a proptech solution – PlanetRent – because of the cumbersome nature of the tenancy process and tenancy compliance. We know it is hard for tenants to find their deposits and it is equally hard for landlords to ensure their properties don’t suffer damage beyond ‘fair wear and tear’. PlanetRent offers landlords the option to embrace deposit-free renting so tenants can opt to pay the equivalent of one week’s rent (as a deposit alternative) and the landlord gets eight weeks’ rent cover.
What we would like to see the government set up, is an easily searchable database of troublesome people, ie those who have LOST previous deposit adjudication. We support the call for a single independent adjudicator to preside over disputes between landlords and tenants. Letting agents are already burdened with significant legislative compliance including Ombudsman membership and Deposit Scheme membership – so this would really bring private landlords into line with what agents already have to do.
It would be great for the government to offer tax incentives to landlords who opt for deposit alternatives. But the challenge here is to satisfy the ‘perfect tenant’ who will be guaranteed to lose one week’s rent buying a deposit alternative, but as a perfect tenant would expect to get their deposit back in full.
And finally, our view on a single clearing system to manage all tenancy transactions is that this is probably a method to tax any rental income that is undeclared by some landlords!
US-style homes at Brook Place – but will renters spot the difference?
We’ve all heard the phrase “American-style renting” but what exactly does it mean? Renters in Sheffield are about to find out. Last week, build-to-rent operator Grainger launched Brook Place, a brand-new residential development 10 minutes from Sheffield city centre comprising 237 “American-style professional private rental homes”. It is the first scheme in the city built and designed specifically for renters.
So what’s on offer at Brook Place? Fully-furnished studios and one- and two-bedroom apartments are available, with all utilities ready to go from day one, a selection of furnishing options and fully integrated appliances. Residents also get super-fast Wi-Fi and they can easily work from home in the co-working space. There’s also a choice of a residents’ lounge and a games corner with table football plus three roof terraces and a podium garden to chill out and unwind.
So
far so standard – none of this sounds particularly new. The ‘stay as long as
you want’ contract at Brook Place, with tenancies of up to three years is
becoming the norm for build-to-rent developments. As is the 24-hour gym, onsite
management, concierge desk and bicycle storage. But there are some notable
features that may give the scheme an edge.
For starters, residents have the choice of two themed interior styles. Most renters don’t get to choose their décor but Grainger are offering colour palettes in either blue and grey or copper and red hues, inspired by the nearby Peak District. And those who opt for a longer tenancy will be able to paint and decorate their apartments, giving them the chance to personalise their new home; something which is often not possible in traditional renting.
Another feature that is being imported from the US is the emphasis on ‘lifestyle’ events to bring residents together, such as cooking classes that will be hosted in the ‘experience kitchen’, which features professional kitchen equipment including a pizza oven.
Food for thought for other BTR providers? Our Manchester office LifebyRingley will be keeping a close eye on the success of Brook Place. Some of these ideas could become a model for others to follow.
The Government announced last week that there will be no changes to the right to rent for EU, EEA and Swiss citizens and their family members living in the UK until 31 December 2020 if the UK leaves the EU without a deal.
Tenants will be able
to prove their right to rent using:
their passport or national identity
card if they are an EU, EEA or Swiss citizen
their residence card issued by the
Home Office if they’re a non-EU, EEA or Swiss citizen family member
You have a duty not to
discriminate against tenants on the grounds of their race or nationality. You
cannot require EU, EEA or Swiss citizens to show you that they have status
under the EU Settlement Scheme or European temporary leave to remain when
entering into new tenancy agreements until 1 January 2021.
A new immigration
system will apply to people arriving on or after 1 January 2021. You will not
be required to undertake retrospective checks on existing EU, EEA or Swiss
tenants when the new system is introduced.
Landlords should not be expected to act as immigration officers. It is stressful and can lead to bias in favour of tenants who do not require the additional hassle of carrying out checks. But until any new system is introduced this has become a fact of life for anyone renting property. So download the guidance, follow the rules and if you have any problems, contact the Landlords’
Helpline on 0300 069 9799.
Have you ever considered buying at auction? If so, do your homework first.
Are you brave enough to consider investing in a new buy-to-let property in the current market? Tough new regulations and tax changes plus the spectre of Brexit uncertainty aren’t doing much for the popularity of the sector with investors. So we’re now seeing a major sell-off, with small landlords quitting the market to the tune of an estimated 4000 properties a month. But if you are a cash buyer – and you can hold your nerve – now may be a good time to buy. And if you don’t have ready money, the Bank of England base rate is at a historic low, so this could be a good time to take out a loan.
There is plenty of demand out there for rental property and house prices are holding up well in most parts of the country. So if you’re willing to buy into the sector for the long term, capital growth still looks strong. So where to start looking? New research looking at the best places to invest in buy-to-let property based on rental yields, shows that Scotland is currently leading the field with rental returns in Glasgow at 7.5%. The next best three places with good returns are in Midlothian (6.8%), East Ayshire (6.8%) and West Dunbartonshire (6.7%).
If you are thinking of taking the plunge, it always pays to do your homework. The days of landlords needing to be close to their rentals are over, with the advent of PropTech such as our PlanetRent app making it easy to manage your properties remotely; we have connected with partners nationwide to help them manage their properties across the country.
This technology frees up investors to search the market for the best returns but once you’ve crunched the numbers don’t forget there are other factors that impact local rental markets. These include any major developments that are planned or new infrastructure in the pipeline, as well as the renter’s profile in that area. If you are looking in an area with a high student population, investing in a house split into flats close to a university will likely offer better returns than a large family home in a high end location.
Whether or not your property will hold its value long-term is another question and one that may be tricky to second-guess. That’s why it pays to get professional advice from a qualified and reputable property agent. You should also look for a good mortgage broker – if you need one – and a reliable accountant to ensure your BTL income is as tax efficient as possible.
Finally, there are often genuine BTL bargains to be found at auction – but again, research the market – and make sure you fully understand the way this sector operates. Purchasers buying rental property at auction can avoid the long-drawn-out conveyancing process, as properties are sold immediately the hammer falls. But buyers must do their own due diligence. They also need to make financial arrangements in advance. A 10% deposit must be ready for payment when the contracts are signed and they must have access to the remaining 90% within 28 days.
Don’t forget, there is more to buying property this way than simply turning up and making a bid.
