Jump in BTR planning approvals signals boom for growing housing sector

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The build-to-rent (BTR) sector has been booming during the pandemic including a record 11,975 planning applications submitted, up 52% year-on-year.

Of these, 58% received full approval, a rise of almost 6% since the start of the pandemic, while 42% were either rejected or withdrawn, a drop of nearly -6%, according to BTR specialists Ascend Properties.

It says the sector is becoming a driving force in the UK new-build market and that Covid has failed to impact the positive momentum.

Ascend’s research shows that the pre-pandemic peak for BTR planning application approval came in Q2 2019 when 6,682 applications were submitted.

Of these, 4,151 – an all-time high of 62% – were granted full planning consent, while 2,531 – an all-time low of 38% – were either rejected or voluntarily withdrawn. By the time the pandemic began, applications had risen to 7,900 submissions but the amount being granted was down to 52%, while rejections and withdrawals rose to 48%.

Q2 2020 brought a predictably significant slump for the sector; while the total number of applications only fell slightly to 6,530, the approval rate dropped significantly to just 39%, while rejection and withdrawal jumped to almost 61%.

Predictable slump

Ascend MD Ged McPartlin (pictured) says build-to-rent is becoming the go-to choice for developers, with projects popping up both in major cities and smaller regional towns.

He adds that there’s also greater willingness from local planning authorities to grant permission for developments.

“While developers sense high yield, low-risk opportunities, local authorities sense an opportunity to simultaneously meet the demand for new homes while rejuvenating and reinvigorating their economies and communities by introducing this new, dynamic way of living,” says McPartlin.

Read more about build to rent.

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Here’s a lesson for overzealous landlords

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A Portsmouth buy-to-let landlord thought he would take advantage of the renovation efforts on his Victorian house in Southsea to meet the government’s projected minimum EPC rating targeted for 2030.

The local council thought otherwise. It is now demanding that the new triple-glazed windows he has installed be replaced at a possible cost of £10,000. It will mean getting custom made-to-measure sliding sash front windows fitted and scrapping the new windows at the four-storey rental property.

Landlord Mike West has replaced his single-glazed sliding sash windows with modern UPVC triple-glazed ones whilst carrying out his renovation works, which perhaps understandably he thought would future proof the Victorian property and meet the projected band C rating.

However, this thought clashed with the council’s thinking as the property is in a conservation area, subject to the many restrictions that implies when it comes to alternations, windows being one of the controlled elements.

What is a conservation area?

These are designated areas of historic and architectural interest, areas in which there are legal restrictions on what changes can be made to buildings, gardens and street furniture in order to preserve the unique character of the place. 

There are now around 10,000 conservation areas in the UK since they were introduced into the planning system in 1967 comprising housing estates, parks, canals, historic town centres and some entire villages.

Local conservation restrictions vary depending on the local authority’s vision. Examples might include things like the prevention of changes to railings, street lighting, trees, windows, extensions, and even including such things as the colour of paint that can be used on front doors and windows.

Always consult before you buy

Most local councils have their own Conservation Officer. This person should always be consulted before carrying out any renovation work or changes to properties in conservation areas. A site visit should be arranged at an early stage in the process of planning your changes, to establish exactly what is and is not acceptable to the council.

The Minimum Energy Efficiency Standard (MEES) came into force in England and Wales on 1 April 2018 and applies to private rented residential and non-domestic property. It is aimed improving the energy efficiency of rental properties by legally restricting the granting and continuation of existing tenancies where the property has an Energy Performance Certificate Rating of F and G. Currently the Minimum Energy Efficiency Standard Rating is E and above.

However, the government recently stated that it wants to upgrade as many private rented sector homes as possible to EPC Band C by 2030 at this it would seem motivated Mr West to go for the ultimate in windows energy efficiency, with modern triple blazing. 

Unfortunately, standard design UPC windows rarely meet the requirements in a conservation area, and because older sliding sash windows are rarely made in standard sizes, their replacement means having them specially made at considerably higher cost than normal.

Mr West has learned about conservation restrictions the hard way as Portsmouth Council has ordered him to remove his triple glazed windows and replace them with windows more in keeping with the style of the originals, as the authority says, to prevent any further “erosion” of the area’s heritage.

Mr West had had comented:

“We put in triple glazing. It’s very energy efficient and also very comfortable for the tenants.

“We’re not conservation cowboys… anybody walking casually up and down the street would not notice the difference.”

However, Mr West’s view was not upheld when it came to his appeal. The Planning Inspectorate upheld the council’s decision.

A spokesperson for Portsmouth City Council said: 

“Unfortunately, there are other UPVC windows on the street. We can’t do anything about these, because we didn’t know about the changes at the time, and legally too much time has passed for us to take action.”

The lesson here perhaps is that with planning matters it rarely pays to make assumptions, especially when it comes to conservation areas and listed buildings. The fact that other properties in the area do not meet the requirements, it does not necessarily follow that any new alterations will – always start off any project by consulting your local authority.

Of course, there are other ways of improving the energy efficiency of traditional sliding sash windows without drastic changes to the outside appearance, possibly with secondary glazing or by fitting double or triple glazing into the wood frames.

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‘Eviction delays to get worse when furlough scheme finishes’

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Landlord Action’s new head of legal Paul Sowerbutts fears the protracted delays around the eviction process are going to get worse before they get better.

The eviction service took 707 calls from landlords looking for advice in June, up from 439 calls in April, and Paul Sowerbutts predicts that once the furlough scheme ends in October there will be more job losses, leading to even more landlords needing to evict tenants who’ve built up large rent arrears.

Review hearings have created an extra hurdle that leads to delays too, which Landlord Action is petitioning to remove.

He tells LandlordZONE: “There’s a lot of frustration directed at local authorities who landlords feel aren’t supporting them because they want tenants to stay in properties for as long as possible.”

Loopholes can sometimes be found to expedite the process, says Sowerbutts, who cites the six-month notice period facing landlords in Wales.

Issuing a notice on the grounds of anti-social behaviour along with rent arrears means the courts should prioritise a case, he advises.

In England, relying on a county court bailiff is taking at least three or four months. Consequently, Landlord Action had been advising clients to apply directly to the high court to get a high court enforcement officer to carry out a much speedier eviction in a couple of weeks. However, this is proving less effective as an application now takes several months.

An experienced solicitor with many years working in local government, as well as with tenants using legal aid and social landlords, he believes the market will evolve once Section 21 is abolished, leading to fewer landlords in the PRS but with larger portfolios, where his expertise in housing management – maintaining relationships with tenants – will be useful.

Paul’s rounded knowledge of all aspects of housing law and the strategies needed to bring successful evictions will also be key. “I’m getting my sleeves rolled up and using my understanding of all sides in the process,” he adds.

Visit Landlord Action.

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BREAKING: Rents hit record £1,000 a month as tenants return to city centres

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A significant revival in the city centre private rental market ahead of Covid restrictions being lifted next week has pushed up rents to a record £1,000 a month per property, says Rightmove.

The portal says this is the first time rents have reached this figures outside London on average after a 2.6% quarterly jump. Overall rents are 6.2% higher than this time last year.

These rises are being generated by a surge of tenants returning to their former urban haunts after spending the pandemic living with parents or renting in more rural areas, says Rightmove, with eight out of ten of the largest cities seeing rent increases.

For example, in Nottingham city centre asking rents are up year-on-year by 6.8% and in Liverpool (pictured) by 3.8%.

The rises are also being driven by a shortage of rental property in the market; year-on-year there are 36% fewer properties on the market, and properties that are advertised are being snapped up.

10% more tenants

Rightmove’s Quarterly Rental Trends Tracker, based on over 470,000 properties, reveals that the number of prospective tenants contacting agents about properties for rent is currently 10% higher than in July 2020.

London is the only region with rents lower than this time last year (-6.8%) though rents in the capital have increased this quarter for the first time since before the pandemic

Rightmove’s Director of Property Data Tim Bannister said: “At the start of this year the impact that tenants leaving cities had on rents was clear to see, but with restrictions continuing to lift we’re seeing signs of the city centre comeback.

“As businesses settle into a more structured balance between home and office time, we expect this to continue for the rest of the year.”

Read more about how Covid has impacted the rental markets.

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