LATEST: Landlords report huge leap in demand for their rental properties

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Demand for rental property is nearly four times higher than just before the start of the pandemic, latest research reveals.

Mortgage lender Paragon says 62% of landlords polled by research agency BVA BDRC on its behalf reported increasing tenant demand in recent months.

This is compared to just 16% during the first three months of 2020 just before the first Covid lockdown.

Significant increases

Some 700 landlords advertising properties to rent were asked to assess tenant demand over the previous three months and a ‘significant increase’ was seen by 34% of respondents, with a further 28% reporting some increases.

Perceived decreases in tenant demand, both significant and slight, were recorded by just 3% of landlords, the lowest on record.

The rental markets seeing the greatest increases include within inner London where 84% of landlords operating in the inner capital along with the South West of England and Wales.

Moray Hulme, (pictured) Mortgage Sales Director for Paragon Bank says: “Another record high in the proportion of landlords reporting increasing tenant demand reaffirms the need to increase the supply of homes in the private rented sector.

“There is evidence of landlords exiting the sector with many citing increasing tax and regulatory requirements making their lettings business more arduous to operate.

“While it is clearly important that landlords are taxed appropriately and the sector is regulated to ensure high standards are maintained, we must ensure that buy-to-let remains attractive enough to investors who are vital in supplying the properties needed to meet demand.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Landlords report huge leap in demand for their rental properties | LandlordZONE.

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RICS compensation claim guidence for loss of light

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Homeowners left in the shadows by neighbouring sheds, fences and home extensions could claim for compensation or have them removed – help for these homeowners is set out in a new consumer guide published by the RICS. Click here to download the guide.

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App with ambitions to revolutionise renting wins backers’ approval

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App-based property management service Residently has smashed its latest crowdfunding target as it bids to make renting a home as easy as booking a hotel.

Residently helps renters find, secure, live in, and move home seamlessly by partnering with agents, property managers and institutional owners who use its free software to manage the lettings process. It promises to eliminate voids, saving landlords hundreds of pounds each year.

New innovations

The firm has previously raised £20m in capital and its current offer on crowdfunding platform Seedrs has already surpassed its original £1.25m target, currently standing at more than £1.8 million with 10 days left to run. With the extra cash, it’s planning to launch new innovations such as a renter subscription product that offers the flexibility to move with one month’s notice, as well as letting renters share honest home reviews and get early notice for properties they’re interested in, months in advance.

In 2020, Residently begun offering itself for free to larger landlords; it plans to generate revenue by charging a percentage of rent and getting commission on home services sold to residents on the platform such as cleaners, movers and utility providers.

Seamless experience

Chief operating officer Shareq Husain tells LandlordZONE that the app has the potential to be revolutionary. He adds: “The renting process can be disconnected. With our platform, tenants don’t deal with separate emails for making an offer, referencing and then moving in – our journey is a seamless experience. Tenants can even set up their energy services and Wi-fi through the app.”

Launched in 2017, the company now has more than 7,500 homes on the network and plans to continue growing in the UK, with ambitions to onboard more than 100,000 homes onto the platform, while also planning a US launch.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – App with ambitions to revolutionise renting wins backers’ approval | LandlordZONE.

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Shortage of rental properties so extreme tenants are refusing to leave?

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Hi, my name is Melissa Lawford and I am the property correspondent at The Telegraph. I have heard from some lettings agents that the shortage of rental properties is so extreme that in some cases tenants are refusing to leave properties because they have nowhere to move to.

View Full Article: Shortage of rental properties so extreme tenants are refusing to leave?

Get up to speed with upcoming safety rules or face fine, landlords warned

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Landlords are being urged to prepare for changes to safety regulations that introduce an obligation to repair or replace any alarm which is found to be faulty during a tenancy.

Forthcoming changes to the Smoke and Carbon Monoxide Alarm Regulations are expected as soon as Autumn 2022 when carbon monoxide alarms will be mandatory in rooms with a fixed combustion appliance in private rented homes and when installing any heating appliance – excluding gas cookers. Private landlords will be expected to repair or replace alarms once told by tenants that they are faulty.

Current rules

Since October 2015, landlords have had to ensure that a smoke alarm is fitted on every floor of their property where there is a room used wholly or partly as living accommodation. They also have to put a carbon monoxide alarm in any room where a solid fuel is burnt, such as wood, coal or biomass and includes open fires, apart from gas, oil or LPG. Landlords must also ensure that the alarms work at the start of each new tenancy.

The Department for Levelling Up, Housing and Communities (DLUHC) is now urging all private landlords and registered providers of social housing who would not be compliant with the updated regulations to start installation and repair of these alarms immediately, as they risk being fined for breaching the rules as soon as they come into force.

Legislation imminent

A spokesperson tells LandlordZONE: “We will legislate as soon as parliamentary time allows and the changes will come into effect once regulations are made, which could be as early as Autumn 2022.”

Timothy Douglas, head of policy and campaigns at Propertymark, says: “The current regulations only oblige landlords to check that alarms are in working order on the first day of a new tenancy. Ahead of implementation, agents and their landlords should start now to plan for the changes and the impact on management practices going forward.”  

More information and guidance can be found here.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Get up to speed with upcoming safety rules or face fine, landlords warned | LandlordZONE.

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Do you need help selling your property portfolio?

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If we’ve learnt anything over the last few months, it’s that now is the time to sell our property portfolios. The market is high, prices may not be this high again for another 7 years, and there are regulations and tax bills around the corner telling us: we need to cash in and get out.

View Full Article: Do you need help selling your property portfolio?

Listed property EPCs – possible exemption?

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Listed property EPCs – Whilst having a Listed property is not an automatic “get out of jail free card” it seems to be a rather complex matter as to whether or not a specific Listed property will be exempted. Even on government sites

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Are you under-insured? Inflation poses an existential risk to every property owner…

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Buildings insurance usually covers loss or damage caused by: fire, explosion, storms, floods, earthquakes, theft, attempted theft and vandalism, frozen and burst pipes etc, and a good landlord’s policy will cover much more besides.

A crucial aspect of property insurance is the buildings cover and the replacement value recorded on the policy. Get this wrong and you could be faced with a big shortfall in the event of a claim – it’s the difference between the value on the policy and the actual cost of re-instatement, after say a major fire.

The rapid rise of price inflation and shortages, particularly affecting building materials, now has the potential to leave thousands of property owners under-insured and subject to what is a condition written into every policy and what insurers term “averaging”, should they have occasion to make a claim.

The Condition of Average

When you insure a building you declare to your insurer the ‘insured value’, which then forms the basis of the insurance contract, the sum insured under your policy on which the insurer calculates the premium due. The insurer charges you this Insurance Premium every year, based on the declared sum insured.

The insured value represents what it will cost to re-instate the building and is not the same value as the market price. This insured value should also take into account all the associated costs of re-building, such as site clearance, professionals’ fees, building control costs etc.

It is very easy for a property owner to get this sum wrong, as without a professional assessment most commercial and some residential buildings are very difficult to assess when it comes to defining a true replacement value. Most insurers will up the insured valued annually to keep it in-line with inflation, but if the value is not right to start with, this safeguard does not help.

And with building materials costs rising at a faster rate that CPI and RPI inflation indices, it is almost certain that the replacement cost will race away from your initial insured value.

The consequences of getting it wrong

So, if you get your insured value wrong it will likely be less than the true value at risk, the valued your insurers have calculated your premiums on – you would be paying year-in, year-out less that you should have paid to cover the true property risk.

In the event of a claim therefore your insurers would more than likely look at the cost of the claim and apply their Condition of Average. This is a basic insurance doctrine and a clause in your policy that says that if you have declared an insurance value of say £400,000 on your building, and the total loss claim comes to £500,000, then you were actually 20% under-insured.

In this situation the insurers would be within their rights to reduce your total loss claim by 20%, or indeed any claim for a smaller amount would also be reduced by 20%. In the above example the insurers might pay out accordingly, or £500,000 x 0.8 = £400,000. You would be £100,000 out of pocket.

What’s more, any excess on the policy is deducted after the claim has been averaged, so your real loss with be even more.

A hard lesson to learn

This would be a hard lesson to learn after the event. Insurance contracts are based on a powerful legal principle which means it is a contract of the “utmost good faith”. Honesty and openness shall always be observed between the parties. Anything stated in the insurance proposal by the insured, and any changes that might occur after the policy is taken out, and that includes the insured value, must be accurate and -0declared to the insurer without delay.

Nick Williams, a partner and commercial surveyor at Arnolds Keys says that:

This is a serious potential problem for property owners (under-insurance) and “is a direct result of rampant inflation in the construction sector: the latest BCIS Building Cost Index published in February suggests a year-on-year rise of more than 10pc, with construction materials inflation running at nearly double that figure. These are cost rises well in excess of the already hefty CPI inflation rate – and the result is that it is very easy to find your commercial premises under-insured.”

It is good practice for property owners to commission an insurance valuation periodically to keep the insured valued (replacement cost) in-line with rising prices, especially in the case of replacement building costs. Landlords and property owners generally would do well to check their policies regularly and review the reinstatement cost on an annual basis.

A good landlord policy will cover far more that just the rebuilding costs, so it is worth shopping around and comparing policies’ cover like for like.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Are you under-insured? Inflation poses an existential risk to every property owner… | LandlordZONE.

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BREAKING: Minister reveals latest Government thinking on landlord regulation

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The government has revealed some of its thinking behind the expected increased regulation of the private rented sector within a written reply to a question in the Lords.

Although both parliaments are in recess Lord Greenhalgh, the government’s housing minister in the Lords, has outlined why Ministers are committed to requiring all private landlords to join a redress scheme, although he has revealed that the government is still ‘exploring’ the merits of introducing a national landlords register in England.

“There are a range of potential benefits that different models of registration could have, which are additional to those served by expanded redress provision,” Greenhalgh replied to Lord Bourne of Aberystwyth.

“These include, but are not limited to, providing local authorities with intelligence on private rented sector properties in their locality, making it easier for private landlords to understand their obligations and helping tenants decide whether to rent a property.

“As part of exploring proposals for introducing a landlord register in England, we are considering how the register could interact with wider commitments for reforming the private rented sector.”

Industry reaction

Sean Hooker (pictured), who heads up the Property Redress Scheme (PRS), one of the several organisations qualified to take on the job of landlords registration, says: “The best people to deal with this matter are tenants themselves and this is why a mandatory redress process is needed.

“Tenants need a simple, effective, and free way of raising complaints, with a compulsion on the landlord to put things right and consequences if they do not do so. 

“This would also act as a de facto register of rental properties and landlords making it harder for the criminals to hide.
“Yes, it also needs more resources for enforcement, however, this will make it easier for the authorities to target the worst offenders providing an intelligence-led and focused approach to stamping out unfit properties. 

“Redress can also act to educate and assist landlords to comply without the heavy stick of prosecutions and fines.

“A lot of the problems are down to mistakes and ignorance and a complaint resolution service can help landlords learn from the outcomes. 

“We await with anticipation the announcement of the new reforms and hope they bring a coherent and workable strategy to tackle this problem once and for all.”

The PRS has been working with NRLA to set up a redress pilot that has already had a significant take-up by landlords on a voluntary basis.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: Minister reveals latest Government thinking on landlord regulation | LandlordZONE.

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Supreme Court rejects gas safety certificate appeal request

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The tenants in the Recarrell v Rouncefield case, who lost their appeal at the High Court, have now had their bid to have the case heard at the Supreme Court declined on the basis that it was not a point of general public importance.

View Full Article: Supreme Court rejects gas safety certificate appeal request