Would you put up your rent at the moment? Fewer landlords are doing it, says report

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Most landlords have continued supporting tenants during the pandemic by keeping rent increases at a minimum, according to ARLA Propertymark.

Its November Private Rented Sector report reveals that the number of tenants experiencing a rent increase fell for the third month in a row, with less than one in three (28%) agents seeing landlords increasing rents compared with 37% in October and 40% in September.

Its survey of 209 letting agents shows this is four percentage points lower than in November 2019, when the figure stood at 32%.

But the number of new prospective tenants fell to an average of 65 registered per branch, down from 88 the previous month.

Regionally, the North West had the highest number of new tenants registered per agency branch with an average of 121, while Northern Ireland recorded the lowest number with an average of 26 registered per branch.

ARLA Propertymark reports there was no change in the number of landlords selling their buy-to-let properties, with an average of four per branch in November – the same as one year ago.

Chief policy adviser Mark Hayward (pictured) says the consistent figures illustrate a steady rental market, with letting agents continuing to support landlords and their tenants.

He adds: “The continuing fall of increased rents in particular is testament to the understanding being shown across the sector.

“As the UK experiences ever changing lockdown measures and regional restrictions, it’s vital that tenancies are maintained to keep the rent flowing, as the stability of the private rental sector is essential to the wider economy’s bounce back from the COVID-19 crisis.”

Read more about rents.

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National Residential will solve every landlord problem to sell your buy-to-lets for the best possible price

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If you’re a landlord, and you haven’t yet heard of us here at National Residential, there’s a good chance you’ll want to. Established in 2006, we pride ourselves with our “any problem we can fix” formula, lead by myself, founder and industry expert

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BREAKING: £30m fund established to pay for fire alarms within at-risk cladded towers

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The government has intervened once more in the cladding scandal and has established a £30 million fund to pay for the costs of ‘waking watches’ in at-risk tower blocks.

This will be welcome news for the thousands of landlords who own apartments within Grenfell-type towers fitted with the now infamous ACM cladding, and who have been paying for ‘waking watches’ along with other leaseholders.

Waking watches are round-the-clock regular security sweeps of buildings to ensure residents within compromised buildings can be warned earlier if a fire does break out.

In a recent case highlighted this week by the BBC, leaseholders at one block in Bromley has spent £500,000 since the Grenfell tragedy or £300 a month per property owner.

The government says it is now stepping in to pay for eligible towers to have common fire alarm systems installed as quickly as possible to reduce or remove dependence on waking watches.

Significant savings

The housing ministry says some buildings have already installed these systems due to the significant savings this offers, with leaseholders in those buildings, who on average were paying £137 per month for a waking watch, expected to collectively save over £3m per month.

Minister Robert Jenrick says his civil servants has discovered wildly varying waking watch costs and has asked Trading Standards to step in and stop leaseholders being exploited.

The Waking Watch Relief Fund will open in January, although emergency support will be offered to leaseholders who cannot afford to pay for waking watches any longer and have been forced to flee their homes.

“The measures announced today build on our commitment, which will be enshrined in law through our Building Safety Bill, to improve the safety of buildings across the country,” says Building Safety Minister Lord Greenhalgh (pictured).

Read more about the government’s support thus far for landlords caught up in the cladding scandal.

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More landlords keeping rents down during pandemic

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ARLA Propertymark’s Private Rented Sector (PRS) report has confirmed that the number of landlords not increasing rents for tenants during the pandemic emergency has again fallen for the third month in a row

Figures for the November report show only 28% of ARLA agents witnessed landlords increasing rents compared to 37% in October and 40% in September.

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Watch: Essential fire safety tips

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Watch Hamilton Fraser Total Landlord Insurance’s video to improve the fire safety of your property

Fire damage claims are among the most expensive that insurers receive, with the average fire claim value being £19,527 in the UK. This can result in major financial loss for landlords, but more importantly, fires put your tenants at serious risk.

Unattended appliances, faulty heaters and candles are all common causes of home fires during winter.

Hamilton Fraser Total Landlord Insurance has prepared a video to help you minimise the chances of a fire breaking out in your rental property.

Visit Hamilton Fraser Total Landlord Insurance’s expert guide to find out more essential fire safety guidance.

Hamilton Fraser Total Landlord Insurance has also put together a helpful advice sheet to assist your tenants with reducing the risk of fire, including how to prevent electrical fires and what to do in an emergency.

For further guidance on getting your property ready for the winter months visit Get winter ready – everything you need to protect your property.

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Test Case: Section 21 evictions and a proportionality appeal

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In this case (F.J.M. v. the United Kingdom, November 2018) the lady tenant had been evicted by her landlord using the Section 21 process and following a possession order granted to the landlord. She claimed that the possession order was disproportionate in her case because of special circumstances and that she should have been able to ask the court to make a “proportionality assessment” before granting the possession order and having her evicted.

The principle of proportionality means that a court, irrespective of the rules laid down in an Act of Parliament, should necessarily go into the pros and cons of of the situation at hand and rule accordingly. But generally, unless the action decided is advantageous and in public interest, such an action cannot be upheld.

This case was the latest in a series of exchanges between the European Court of Human Rights and the UK Supreme Court concerning the compatibility of possession orders with Article 8 of the Convention.

At first, the House of Lords had taken the view that a proportionality defence could not be brought against possession orders in the case of council housing tenants—where the landlord is a public authority.

The UK Parliament had already passed legislation striking a balance between the rights of social housing tenants, on the one hand, and public authorities on the other. In a previous case the European Court of Human Rights had held that the existence of legislation should not prevent a social tenant from raising a proportionality defence. The UK Supreme Court had accepted this ruling but importantly both courts stressed that this reasoning did not apply to the private rented sector—where the landlord is either a private individual or a limited company.

This is an important principle and removed a lot of uncertainty for private landlords.

The Facts of the Case

The applicant, F.J.M., lived in a rented house in England belonging to her parents, who had purchased the property in 2005 with a mortgage loan and had granted her an assured shorthold tenancy. The parents fell into arrears, and in 2012 the mortgage company sought a possession order to bring the tenancy to an end, evicted the applicant, and recovered possession of the house.

The special circumstance were that F.J.M. was suffering mental health issues and her psychiatrist maintained that she would have great difficulty finding alternative accommodation if evicted due to her psychiatric health history. There was a significant possibility that she would become homeless, she had argued, and even if she did manage to find alternative accommodation the stress entailed would make her health worse and it could lead to self-harm, suicide, or violence towards others.

The UK Supreme Court had previously ruled in McDonald v McDonald that the lack of statutory protection for tenants “served to reinvigorate the private residential rented sector, without conferring so much protection as to deter private individuals and companies from making residential properties available for letting” As this ruling had already “struck a balance” between the rights and interests of tenants and those of private landlords, it was ruled not justified that tenants should be entitled, as a matter of principle, to require the court to consider the proportionality of a possession order.

F.J.M. then applied to the European Court of Human Rights, claiming a violation of Articles 6 and 8 of the Convention. She argued that the possession order was disproportionate in her case as explained above.

The final decision by The European Court of Human Rights was that in the private rented sector, a measure prescribed by law with the purpose of protecting the rights of the parties may be seen as necessary in a democratic society. It thus held that the balance between the rights and interests of tenants and private landlords could indeed be as those struck by existing the legislation.

The Court stated that the two parties had entered voluntarily into a contractual relationship in respect of which the legislature had already regulated the balance between the ECHR Article 8 rights of residential tenants and the Article 1 of Protocol No. 1 rights of private sector landlords, having regard to the general public interest in reinvigorating the private rented sector. Consequently, it declared the F.J.M. application inadmissible.

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6 reasons for landlords to be optimistic about 2021!

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Crack open the champagne this New Year’s Eve – we have good news for you…

1. A vaccine is on the way!  At the time of writing, this was in the very early stages of being rolled out across the UK, and hopefully by the second half of 2021 we can start to put the coronavirus pandemic behind us so that all our lives can start to return to some level of normality again. This is fantastic news for everyone! In the meantime, continue to stay safe and keep healthy.
2. Whatever happens to the rental and sales market in 2021, you can be assured that Belvoir will always be here for you. Whether you are a landlord who is buying or selling a property, or you simply need advice on any aspect of property management, you can always contact your local Belvoir office and have a chat with one of the team. In addition, have a look at the Belvoir website (www.belvoir.co.uk) and check out the Belvoir rental index, which is published each quarter. This is a fantastic free resource that has been in existence for over ten years and analyses advertised rents for all Belvoir offices. The rental index is there to help landlords identify exactly what is going on in their particular area, as well as providing a summary of the wider UK rental market.
3. Another reason to be optimistic about 2021 is that the rental market proved itself to be very resilient during the pandemic, with a continued cultural shift towards renting as a lifestyle choice. Government ministers have made it clear that regardless of what tier system is in place, they are keen for the housing market to remain open for business. This means that all move-ins and move-outs will continue throughout 2021 and people will still be able to sell, view, and buy properties. In addition, Belvoir will continue lobbying the Government on your behalf for the implementation of a tenant loan scheme to help reduce the risk of tenants going into arrears.
4. Our research shows that tenant demand remains very high, voids and evictions are extremely low, and tenants are staying in properties longer. A total of 41% of Belvoir’s tenants are likely to remain in their rental property around 19-24 months, and almost a quarter are renting for over two years. A survey of Belvoir offices predicts that these factors are likely to continue in 2021.
5. In a recent survey of Belvoir offices, 90% of respondents predicted that house rents will increase or remain static in 2021. In addition, 82% predicted that rents on flats will increase or remain static, although as a result of lockdown houses (particularly those with outdoor space) are proving to be more popular than flats. Predictions regarding the likelihood of rising or decreasing rents vary from region to region, and even for offices within a specific region, so it is highly recommended that landlords contact a reputable professional agent in their area to discuss how the market is likely to perform before making any decisions about opportunities to expand their portfolios or to sell any of their properties.
6. If you are already an existing landlord, it is likely that the value of your properties may have already risen in 2020. Property expert Kate Faulkner, who prepares the Belvoir rental index each quarter, says: “A rise in the value of a landlord’s rental property could lower its LTV, which may enable them to get access to lower mortgage rates and lower costs. If you are thinking of expanding your portfolio in 2021 you may find that after the stamp duty holiday ends in March there could well be some bargains to be had in the property market. For further information check with your local property agent.”

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Cities will be encouraged to plan for more family homes

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Following a consultation launched in the summer that sought views from planners, councils and the wider public, the government has announced its plan for enabling the delivery of more homes across England.

A housing need formula is currently used to provide a starting point in the process of local planning for new homes.

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UPRNs: No more hiding from tax, regulation and licensing for landlords!

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The government-backed organisation that is managing the roll-out of Unique Property Reference Numbers (UPRNs) has revealed how the initiative will impact landlords and rented property.

GeoSpace, which is a joint venture between government and industry, was created in 2011 to digitise the built environment and help both local and national governments put together a unique list of every address in the UK.

After many years of work UPRNs are emerging from the realm of local authorities, which use them internally, into the wider world including the private rental market.

But landlords should understand that this will make their activities, and their properties, much more transparent to both tax, regulatory and licensing authorities.

Property MOT

This is the conclusion of Geoplace chief Nick Chapallaz (pictured, above), whose organisation is backing the efforts of The Lettings Industry Council to create an MOT-style record for every property within the PRS.

“One element of this is to check whether a property has a valid energy performance certificate (EPC), and the identifier can be linked to this and to gas and electricity meters as part of the validation,” he says.

“It also enables local authorities to cross-reference needs for social services with rental properties, to identify landlords who are avoiding their responsibilities for essential repairs, and helps HM Treasury identify those who are not registered for tax.”

But while some rogue operators will not welcome this kind of digital snooping, it will help drive huge improvement to the lettings process for estate agents and compliant landlords.

Theresa Wallace (pictured), chair of TLIC, says UPRNs will bring down costs by making property management much easier by connecting a host of services to a property via one number.

This will include EPC providers, gas engineers, electrical contractors, CRM systems, deposit protection providers and ombudsman schemes.

What is a UPRN?

It’s a unique 12-digit number that is unique to every address in the UK. For example, No.10 Downing Street is UPRN 100023336956.

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Auctions giant launches transparency drive to help ‘newbie’ landlord bidders

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Landlords will see more transparency when they’re buying at auctions than they have before with the launch of a new initiative from auctions giant SDL.

It has introduced a summary sheet of fees for all its lots in each property’s legal pack that details exactly what’s payable, so buyers have a clear understanding of any extra costs before bidding. 

The auctions industry has seen rapid growth as a result of the pandemic, as both buyers and sellers embrace socially distant transactions, according to SDL, which now holds regular live-streamed auctions, running monthly auction events alongside its daily timed auctions.

This has also introduced many newcomers to the market, says MD Andrew Parker (pictured), who wants them to have a positive first experience.

He believes auctions are no longer the preserve of investors and developers.

“We’re seeing a growing number of private individuals buying and selling in this way – particularly in the uncertainty of 2020 – so we consider it our duty to ensure the process is as straightforward as possible, with no hidden costs,” says Parker.

He adds: “Lots listed on our website already include information about buyer fees but the introduction of the summary sheet within the legal pack makes this even clearer, spelling out exactly what costs the winning bidder will be expected to pay.” 

Parker says this clarity extends to guide prices too. “All of our property listings make it plain that the reserve will be no more than 10% higher or lower than the guide price, which means guide prices cannot be set artificially low.

“Some lots will exceed all expectations but that’s just the nature of auctions and competitive bidding.”

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