HPL cladding: More questions than answers

Ringley CEO Mary-Anne Bowring will talk about fire safety in Manchester later this week

Footage from this weekend’s devastating fire at a student block in Bolton must have given the property industry a collective sense of deja vu. Thankfully, everyone was safely evacuated, but once again we watched flames rapidly spreading up the outside of a block, while its cladding melted in the heat. This time though, the cladding was HPL – not the ACM used on Grenfell Tower – and another can of worms was well and truly opened.

In the wake of the 2017 tragedy, experts warned that “the next Grenfell” would involve HPL cladding. Building owners were told to remove all cladding systems, including HPL, that didn’t conform to building safety standards. However, the government’s ban on combustible cladding only applies to blocks over 18m. That lets an awful lot of buildings – including the one that went up in flames in Bolton – off the hook.

Inside Housing today quotes Matt Wrack, general secretary of the Fire Brigades Union, who says “This terrible fire highlights the complete failure of the UK’s fire safety system”. We have to agree with him. Even the reforms proposed by the Hackitt Review only apply to buildings of ten storeys and above, referred to as HRRBs or high-risk residential buildings. It has to be hoped that once in place and seen to be working, these changes will be applied to all buildings, not just high rises.

So what happens now? We expect to see calls for HPL cladding to be tested and removed if it is found not to have been treated with fire retardants,  which gives it a fire safety rating of Class 0 or Euroclass B. However, it is estimated that cheaper versions graded a much lower ‘Class D’ may account for more than 80% of the market.

The continuing nightmare of residents in ACM-clad blocks are well documented. All the same issues around the rights and responsibilities of leaseholders are now likely to be extended to a new group of people. And as if that wasn’t enough, lenders have tightened up their rules since the government issued Advice note 14  last December. This leaves an increasing number of leaseholders stuck with flats that are unsellable because not only are mortgage applicants being assessed but so too are the buildings they want to live in. The Times estimates that up to 50,000 flats around the country are affected. What a mess.

So two important points for the immediate future.

  • If you manage a building with HPL cladding, talk to residents about the implications and commission a fire risk assessment if necessary. Make sure the block has an evacuation policy. If there isn’t one, make it a priority to put one in place.
  • If you own or rent a flat in a building with external cladding, contact your building manager or landlord to find out what measures they are putting in place to ensure resident safety.

Watch this space – this story is going to run and run. And one thing is crystal clear. The issues raised in the last two years around fire safety will not be resolved quickly or easily.

Mary-Anne Bowring, CEO of The Ringley Group, is speaking on this subject for the RICS in Manchester this Wednesday 20th November.


Why rent controls are not the answer to London’s housing crisis

Our message to the London Mayor: focus on investment, not rent control

The London Mayor is being urged to forget about rent controls. Instead, say critics, he should be increasing the supply of rental homes by attracting more people to invest in the capital’s PRS. 

Earlier this year Sadiq Khan called on the Government to give him the power to cap London rents. His aim is to “fundamentally rebalance London’s private rented sector” and make it fit for purpose. There is no arguing with the fact that renting in London has become increasingly unaffordable. Average monthly rents increased by 35% between 2011 and 2018 according to the Valuation Office Agency. And the latest English Housing Survey reveals that private renters in the city spe3nd a massive 42% of their income on rent compared to 30% in the rest of the country.

So the mayor has a point. But rent controls are not the answer. As Paul Sloan, development director for Haart, said in the press last week: “Rent controls sound great in theory, but unfortunately, the reality is that they simply do not work. Around the world, we have countless examples of cities which have introduced rent controls, but that has done nothing to address affordability issues.”

Believe it or not, if you go back 80 years or so, there was significant institutional investment in housing which left the market due to rent controls. At Ringley we think it’s simply nonsensical for the Government, having spent five years enticing the institutions back into the rental market, to even consider now preventing them meeting their investment criteria by capping rents.

The problem with rent control is that landlords are put off entering or staying in the market. It’s a simple equation: fewer landlords mean fewer homes to rent. This in turn is likely to push up prices even further. And as Paul rightly points out – this is the very thing the controls are brought in to avoid. The RLA gives the example of Berlin, where rent control actually made rents rise by about ten% over two years. Before they were introduced they rose by about 1-2% per year.

The other key point is that capping rents may also make landlords more inclined to cut corners and less inclined to maintain their properties to a high standard. This means, over time, the quality of rental housing could start to fall and tenants could find repairs and redecoration being ignored or carried out less frequently.  We say the key to a properly functioning market is supply. The Government must focus on height, density, planning delays, clear guidance and other supply accelerators such as getting land banks developed and encouraging partnerships to release land. The key objective must be to better serve residents by giving them more homes to rent and more choice. Ultimately this will address affordability

Good news for broadband providers – and you!

Faster block broadband made easier

Would you like better broadband speeds in your block? If so, here’s something for you. The government has announced new measures to make it easier to install faster internet connections in blocks of flats where landlords repeatedly ignore requests for access from broadband firms. Digital Secretary Nicky Morgan estimates that an extra 3,000 residential buildings a year will be connected as a result.

Under the law as it stands, to install gigabit-capable broadband in the UK’s estimated 480,000 blocks of flats or apartments, broadband providers need permission from landlords to enter the property and undertake the necessary works. One of the biggest obstacles preventing operators from installing new networks in residential blocks is the building owner’s failure  – in as many as 40% of cases – to respond to requests for access. And while broadband providers can already push for access via the courts, this takes time – and money.

So to solve the problem, the Government is now promising a cheaper and faster process for telecoms companies to get access rights. This will apply when a landlord has repeatedly failed to respond to requests for access to install a connection that a tenant within the building has asked for. And it will give operators a cheaper and more streamlined route via the existing Upper Tribunal (Lands Chamber) to connect the property. The aim is to lower the timescale for entering a property from six months to a matter of weeks, and at a drastically reduced cost.

Good news all round we think.

Ringley’s 12-point plan for change

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.

Election 2019: what does the rental sector want?

What will the election deliver for property?

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 tops latest BTR ratings

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

What’s happening in the Old Kent Road?

The new face of the Old Kent Road

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.

How PlanetRent takes the pain out of compliance

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.

Fire! Should you stay put or evacuate?

Should I stay or should I go? Make sure you know the evacuation policy in your block

Would you stay put if a fire broke out in your block? As the first phase report of the Grenfell Tower Inquiry is published, the “flawed” stay put policy used on the night of the devastating fire is now under intense scrutiny.

‘Stay put’ is the standard advice given to residents in blocks of flats who are not directly affected when a fire breaks out. They are told to stay in their homes with the windows and doors shut. The expectation is that the construction of the building and fire doors leading onto communal areas will protect people from the spread of fire long enough for the fire service to attend if necessary and put out the fire. At Grenfell Tower, this policy proved utterly inadequate. It is now judged to have led to unnecessary loss of life. As a result, the government is working on a “full and detailed examination” of the stay put/evacuation strategy for fire in high-rise blocks.

Housing Secretary Robert Jenrick told the Housing, Communities and Local Government Select Committee yesterday that, while expert consensus is that stay put is “valid” for most tall blocks, the government is now reviewing the advice.

As a layperson it is hard to understand the thinking behind stay put: surely it makes more sense to get out of the building as quickly as possible? So here’s the explanation. The thinking behind it is twofold:

  • First, the fire service needs unfettered access to hallways and stairs to get up and down to evacuate the building in priority order. This would be hampered by everyone trying to evacuate at the same time – particularly in buildings with only one stairway.
  • Second, opening and closing doors increases air circulation which not only accelerates combustion and the spread of smoke but panicking residents rarely stop to close their door behind them. This leaves other parts of the building exposed to the fire.

A stay put policy is intended to protect residents (who can be safely rescued some other way) from smoke inhalation, as smoke kills long before the heat from a fire.  But the Grenfell Inquiry judge is now calling for evacuation plans to be developed for all high-rise buildings. Ringley Group managing director Maryanne Bowring agrees. She does not believe stay put is the right policy for all high-rise blocks.

Her view is this. “If there is no misting system or sprinklers in your building and you are above the height of a ladder (normally assumed to be six storeys) or if the fire is below your home in a tower, or if the facade of a building is burning, or if the building was not constructed in the last 10 or so years, I would say you must get out.

She adds: “You can have as many fire risk assessments as you like, you can have as much fire detection equipment as you like, but there should now be an acceptance that any fire policy is made up of component parts, one of which can fail, even if serviced or checked yesterday – so visual and common sense judgements must be made”.

We all feel for those in the fire and call centres that night, who were under orders to keep telling residents to stay put, when they could watch the fire at Grenfell Tower on mobile phones or in person and see that the building was engulfed by flames.

Dame Judith Hackitt, who carried out a review of fire safety and building regulations for the government post-Grenfell, will now advise ministers on the format of a new building safety regulator. The aim is for a fundamental shift in the design, construction and management of tall buildings with the focus firmly on safety. This is badly needed for the long-term wellbeing of residents and we await the outcome with interest.

Five reasons to love co-living

The Collective is one of the UK’s first co-living providers with schemes in Canary Wharf and West London

Co-living schemes are popular in the US, China and Scandinavia. Renters live in small bedrooms but they have access to communal kitchens and living space as well as other shared amenities. The concept might sound like a glorified HMO. But the size and quality of accommodation and additional facilities such as gyms, co-working spaces, cinemas, cafés, kitchens and laundries – and the fact that residents are encouraged to come up with ideas to enhance the community lifestyle – means that co-living is increasingly being considered as a use class of its own. 

The concept is still in its infancy in the UK. But the idea is catching on as Build-to-Rent providers spot its potential. There are a number of clear benefits for renters. Here are five reasons to take a closer look.

Communal living – co-living provides affordable, community-focused housing in serviced, fully-furnished accommodation with an all-in-one charge. This appeals not only to young professionals but also to older people who would like to be part of a community. Law firm Collyer Bristow spoke to 424 18-44-year olds living in London and the South East about co-living last year. The company’s Ownership Attitudes and Aspirations Report found that while only a very small percentage of renters now live in this kind of development, 74% would consider it. Lifestyle was a key selling point. Loneliness is an issue for all ages and co-living schemes provide a ready-made community with operators often providing a full programme of events and activities.

Single payments – a single monthly payment with no hidden costs is the feature of co-living schemes that holds the most appeal for renters, according to the same survey.

Scale – unlike living with two or three other people in a shared property, co-living provides renters with a whole community to interact with. That means far less chance of falling out over fridge space or who does the washing up! If you don’t want to be friends with your neighbour you don’t have to be – there are plenty of other people to spend time and share activities with.

Institutional backing – In contrast with traditional HMOs, co-living providers are major players in the property market backed by large-scale investors. This is a major plus point. Renters have the peace of mind of knowing that maintenance will be carried out on a regular basis, insurance cover is in place, and health and safety legislation will be complied with.  

Effective management – co-living operators typically maintain not just the fabric of the building, but manage the communal areas too.  If a development includes communal kitchens, it will be their responsibility to replace white goods and other shared items.  And co-living schemes are more likely than traditional blocks to have a concierge and maintenance team on site.

A report published in February by the Social Market Foundation, promotes co-living as an answer to the housing crisis. It suggests that these developments should be available to buy rather than operators simply sticking with the current rental model. This would make owning a property more affordable, particularly in cities.

However, planning specialists at Savills sound a word of warning. They say the planning system is taking time to adapt to co-living and there is currently a lack of clear policy on potential schemes. But despite this, the number of schemes that have planning permission, or are in the pipeline, is on the rise in London and co-living is beginning to emerge in other cities too.