Rental market is ‘most competitive ever’ in living memory, says Rightmove

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The UK now has the most competitive rental market in living memory, portal Rightmove has claimed.

Its latest rental trends tracker reveals that this competition has pushed up rents outside London by 10.8% over the past 12 months, the first time this figure has ever exceeded 10%, while rents are now 15% higher than just before the pandemic hit.

This is being created by extraordinary tenant demand but an ongoing but significant drop in properties available to rent; tenant demand is up 6% but stock is down 50% compared to a year ago.

The figures for London are an 81% jump in tenant demand and a 47% drop in stock, leading to a new record of £2,193 rent being achieved for each tenancy on average.

Mismatch

Rightmove says the result of this ongoing mismatch between tenant demand and the properties available to rent means that tenants looking for a new place to move to are being faced with the most competitive rental market that the property portal has ever recorded.

Finding a reasonably-priced rental property means many tenants are now considering areas they otherwise would not have considered in suburban areas around cities.

Rightmove cites two examples in Merseyside, Prenton and Birkenhead, where average asking rents are £591 and £551pcm respectively compared to £876pcm on average for nearby Liverpool.

“There are several factors affecting supply and demand,” says Rightmove’s Director of Property Data Tim Bannister.

“On the supply side, we’re hearing from agents and landlords that tenants are signing longer leases, which has prevented some of the stock that would normally come back onto the market from doing so.

“When it comes to demand, we’re still seeing the effects of the pandemic, whereby tenants are balancing what they need from a home and how close they need to live to work with where they can afford.”

Read the rental trends tracker in full.

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EPC and Economy 7 Immersion Heaters?

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Can anyone advise how to heat water for an all-electric flat to comply with a reasonable EPC rating?

The previous EPC stated ‘Hot Water- Electric Immersion, off peak – Average. But recommended an insulation blanket on an already insulated tank.

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What does the new Trecarrel House vs Rouncefield decision mean for landlords?

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The Supreme Court’s decision means that the interpretation of the law accepted by Court of Appeal’s in June 2020 remains binding on District Judges who deal with possession claims.

The Court of Appeal’s decision was greeted as a good outcome for landlords.

It has meant that where a landlord has failed to provide a new tenant with the last gas safety certificate before occupation they are able to remedy this by providing the certificate late.

That was a welcome relief to the many responsible landlords fearful that accidental mistakes in providing tenants with certificates could result in them permanently losing the ability to serve a section 21 notice.

Furthermore, a failure to complete a subsequent annual check on time will not bar the landlord from serving a section 21 notice provided the certificate is given to the tenant prior to serving the section 21 notice.

Again, this will be reassuring to landlords, particularly in recent circumstances where arranging gas safety inspections has been a challenge.

The Court of Appeal’s decision, however, did not resolve all the issues that have arisen since gas safety was linked to the section 21 procedure in 2015.

There are still difficult questions left unresolved. For example, what does this mean for a landlord who has failed to carry out a gas safety check at all before the tenant goes into occupation?

Are they able to rectify this breach and serve a valid s21 notice? While the Court of Appeal determined that late provision of the initial gas safety certificate is remediable, they do not go so far as to say that all historic gas safety breaches, including failing to actually have a certificate before the commencement of the tenancy, are capable of remedy.

In addition, the gas safety regulations only require landlords to retain the gas safety certificate for two years from the date of the check which means even where a check has been carried out before the start of the tenancy, landlords may face difficulties remedying the breach later or proving that they have done so.

Author bio: Robin Stewart is a senior associate at legal firm Anthony Gold.

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NEWSFLASH: Judges reject appeal against Trecarrell vs Rouncefield decision

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Landlords have been given some good news today after the Supreme Court refused a further appeal in the landmark gas safety certificate Section 21 eviction case.

Known as the Trecarrell House Limited v Rouncefield case, it centred on whether a tenant can be evicted via a Section 21 notice if a gas safety certificate had been served after the tenancy has begun.

In June 2020 the Court of Appeal ruled in a 2-to-1 majority decision that late service of a gas safety certificate does not prevent a landlord from serving a section 21 notice on their tenant, provided the certificate has been given to the tenant before service of the section 21 notice.

The tenant in the Trecarrell v Rouncefield case had sought to overturn the Court of Appeal’s decision in the Supreme Court.

A panel from the Supreme Court consisting of Lord Briggs, Lord Stephens and Lady Rose have now rejected the tenant’s application on the basis that the application does not raise a point of general public importance.

The panel made the decision on the basis of written submissions from both parties’ lawyers, according to legal firm Anthony Gold, which acted for the landlord together with barristers Justin Bates and Brooke Lyne of Landmark Chambers.

NRLA support

The landlord’s successful appeal to the Court of Appeal was supported by the National Residential Landlords Association.

“The Court’s decision will be welcomed by private sector landlords who feared that a failure to provide the gas safety certificate before occupation permanently prevented them from recovering possession of their properties,” says senior associate solicitor at Anthony Gold, Sarah Cummins (pictured).

“It has been nearly two years since the Court of Appeal’s judgment and the Supreme Court’s decision to refuse to hear the tenant’s appeal now brings some certainty to this difficult area of law.

“There is no requirement for the Supreme Court to explain its reasons, but it may be that the promised abolition of section 21 notices played some role in the court’s decision to refuse permission to appeal.”

Main Pic: Trecarrel House in St Ives, Cornwall, the property involved in the case.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – NEWSFLASH: Judges reject appeal against Trecarrell vs Rouncefield decision | LandlordZONE.

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BREAKING: Judges reject appeal against Trecarrell vs Rouncefield decision

admin    Uncategorized     agents

Landlords have been given some good news today after the Supreme Court refused a further appeal in the landmark gas safety certificate Section 21 eviction case.

Known as the Trecarrell House Limited v Rouncefield case, it centred on whether a tenant can be evicted via a Section 21 notice if a gas safety certificate had been served after the tenancy has begun.

In June 2020 the Court of Appeal ruled in a 2-to-1 majority decision that late service of a gas safety certificate does not prevent a landlord from serving a section 21 notice on their tenant, provided the certificate has been given to the tenant before service of the section 21 notice.

The tenant in the Trecarrell v Rouncefield case had sought to overturn the Court of Appeal’s decision in the Supreme Court.

A panel from the Supreme Court consisting of Lord Briggs, Lord Stephens and Lady Rose have now rejected the tenant’s application on the basis that the application does not raise a point of general public importance.

The panel made the decision on the basis of written submissions from both parties’ lawyers, according to legal firm Anthony Gold, which acted for the landlord together with barristers Justin Bates and Brooke Lyne of Landmark Chambers.

NRLA support

The landlord’s successful appeal to the Court of Appeal was supported by the National Residential Landlords Association.

“The Court’s decision will be welcomed by private sector landlords who feared that a failure to provide the gas safety certificate before occupation permanently prevented them from recovering possession of their properties,” says senior associate solicitor at Anthony Gold, Sarah Cummins (pictured).

“It has been nearly two years since the Court of Appeal’s judgment and the Supreme Court’s decision to refuse to hear the tenant’s appeal now brings some certainty to this difficult area of law.

“There is no requirement for the Supreme Court to explain its reasons, but it may be that the promised abolition of section 21 notices played some role in the court’s decision to refuse permission to appeal.”

Main Pic: Trecarrel House in St Ives, Cornwall, the property involved in the case.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: Judges reject appeal against Trecarrell vs Rouncefield decision | LandlordZONE.

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BREAKING: Major house builders forced to pay £2bn towards cladding costs

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Thirty five of the UK’s leading housebuilders have agreed to pay for the remediation of cladding on any building over 11 metres tall that they have developed over the past 30 years.

The package, brokered by Michael Gove, will initially be worth some £2 billion with an extension to the Building Safety Levy due to raise a further £3 billion.

This new agreement will be legally enforceable rather than being a ‘promise’, and builders who fail to sign up to the scheme will ‘face consequences’ says Gove.

For a list of the housebuilders involved so far, click here.

Also, Gove’s department is to introduce new powers that will enable enforcement on any companies who fail to sign up, as well as those that breach the agreement they have signed up to.

These new powers would allow the Secretary of State to block those who refuse to make and deliver on their commitments from building and selling new homes. 

As set out in January, a new government scheme will also see industry pay to fix buildings where those responsible cannot be identified or forced to in law.

Loans scrapped

This follows previous confirmation that plans for a 30-year loan scheme paid for by leaseholders would be scrapped. 
The new scheme will be funded through an extension to the Building Safety Levy that will be chargeable on all new residential buildings in England and raise £3 billion.

“Today marks a significant step towards protecting innocent leaseholders and ensuring those responsible pay to solve the crisis they helped to cause,” says Gove (pictured).

“I welcome the move by many of the largest developers to do the right thing.

“But this is just the beginning. We will do whatever it takes to hold industry to account, and under our new measures there will be nowhere to hide.”

But the proposals have not been without disappointment for landlords. After initially saying ‘qualifying leaseholders’ would not include landlords, the government recently relented and, after lobbying from the NRLA, included ‘accidental’ landlords with no more than three properties in total – i.e. excluding ‘professional’ landlords with multiple property portfolios.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: Major house builders forced to pay £2bn towards cladding costs | LandlordZONE.

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BREAKING: MPs slam DLUHC over ‘piecemeal’ regulation of the private rented sector

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A committee of MPs has criticised the Government’s ‘piecemeal’ approach to regulation of the private rented sector which, they say, has only made matters worse for tenants, landlords and local authorities in the sector.

Launching the report, the Public Accounts Committee’s chair Dame Meg Hillier (main picture) says “unsafe conditions, overcrowding, harassment, discrimination, and dodgy evictions are still a huge issue in the PRS”.

“Renters with a problem are faced with a complex and costly redress system which is not fit for purpose and many tenants give up at the first hurdle.

“We need to see a change in balance. We expect DLUHC to produce the promised White Paper in a timely and effective fashion and start to turn around its record on addressing the desperate housing crisis in this country.”

The report concludes that Ministers must commit to properly funding local authorities to police the sector; that tenants should be better informed of their rights; and that proper redress should be ushered in – one of the Government’s proposals within its looming White Paper.

Ministers are also urged in the report to make it easier for councils to bring in landlord licensing schemes, and get a grip on what’s happening on the ground with proper housing data to end the ‘postcode lottery’ of local enforcement.

Pitiful

“Tenants and responsible landlords are being let down by the pitiful lack of enforcement action by councils using the array of powers available to clamp down on bad practice in the sector,” says Ben Beadle, Chief Executive of the NRLA.

Beadle (pictured) adds: “Too often reforms have been piecemeal, based on insufficient information to understand their true impact or how workable they are.

“Such a strategy needs to include assessing the impact of reforms on the supply of homes for rent at a time when demand for them is soaring.”

Seah Hooker (pictured), Head of Redress at the PRS says: “Whilst redress for letting agents has been effective in identifying the shortcoming and gaps in the standards of properties, an educated and accountable agent sector, that abides by a set of rules and regulations is needed. 

“Landlords who experience the poor quality of some agents go it alone and this is often when mistakes and non-compliance with the law occurs. 

“If property standards are to improve a professional agent sector will be an essential part of the equation. 

“This with landlord redress and a register of rental properties, that have be inspected and are safe, fit for habitation and energy-efficient, would provide a robust regime for a first-class rental sector.”

Rotten deal

Polly Neate, chief executive of Shelter, says: “Private renters are getting a rotten deal from a broken system where the odds are stacked against them.

“The PAC report backs up what we see through our services all the time – that renters live in fear of being evicted for challenging poor conditions or bad landlord behaviour.”

Read the full report.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: MPs slam DLUHC over ‘piecemeal’ regulation of the private rented sector | LandlordZONE.

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£5 billion agreement with major developers to fund building safety repairs

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The Department for Levelling Up, Housing and Communities and Michael Gove have revealed an agreement that will see industry contribute £5 billion to address the building safety scandal.

Michael Gove has agreed a solution with the housing industry that will see developers commit a minimum of £2 billion to fix their own buildings.

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Agents insisting on their own AST?

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Do you have to use an Agents own AST for a tenant find service?

For a tenant find service it is normal to reference the applicant you select and prepare the tenancy, arrange signing, collect deposit and lodge with the DPS as well as serving all compliance documentation.

View Full Article: Agents insisting on their own AST?

Demand for industrial property outstrips expectations

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As reported by Bdaily’s Members’ News, Coventry-based commercial property agent Bromwich Hardy says that the market in key parts of the midlands is now becoming highly competitive and just as active are markets further south. Across the regions agents are finding that demand is running ahead of supply.

Founding partner at Bromwich Hardy, Tom Bromwich has said that, for example, two recent lease deals were on industrial units at Harrowbrook Industrial Estate at Hinckley. Both deals were completed in record time, indicating the strength of the market, and the huge demand for East Midlands industrial units, as the country recovers from the pandemic.

“We have recently concluded deals for our client Mileway on Unit D1, D2 and D6 and set new groundbreaking rents at the estate on both leases,” said Mr Bromwich.

“Both units are in a fantastic location, benefiting from an excellent landlord in Mileway and are in first-class condition. Unit D1 & D2, which extends to more than 15,500sq ft, had just benefited from a comprehensive refurbishment to bring it up to the highest standards, whilst the 7,500 sq ft on offer at D6 was also hugely sought after.

“In fact, we could have let either of them three times over such was the quality of the offer. The market in Hinckley is now starting to rival those further south like Coventry and Leamington, with its excellent transport links and skilled workforce helping drive demand.”

The same picture further north…

The late Blackburn Rovers owner Jack Walker built his empire on steel, as a steel merchant, and he built a rambling industrial estate south of Blackburn – the Walker Industrial Estate on Junction five of the M65 motorway – recently acquired by San Francisco-based 4th Industrial, backed by US based TPG Real Estate Partners, with $6.4bn of assets under management.

The deal was hailed as a “significant vote of confidence” in commercial property as well as the national and local economies, post Brexit and post the pandemic.

The confidence shown by 4th Industrial and TPG Real Estate Partners is seen as firm evidence of the growth in the demand for industrial space in Lancashire and the confidence show by foreign investors in the UK.

Simon Wood, head of investment at B8 Real Estate, acting as agents for the buyers, told LancashireBuisnessView.co.uk (LBV) that there was plenty of demand for the Walker industrial park, which was sold for an undisclosed sum.

Wood says:

“Lancashire has a vibrant industrial base which is driving demand for space all along the M65 corridor from Chorley to Blackburn. We particularly liked the Walker estate because of its excellent layout and the opportunities to add value.

“This deal demonstrates the way in which major overseas investors are increasingly willing to look beyond the M6 corridor and make significant investments in industrial areas like Blackburn. As such, it represents a significant vote of confidence in the North’s economy.”

The Walker estate with its 21.3-acre site was redeveloped by the Walker family following the sale of its steel supply business to British Steel for £330m in 1989. At the time, according to LBV, it was the largest sum ever fetched for a private company.

Currently the park houses eight fully let units totalling 324,340 sq ft of space with an annual rent roll of £1.49m. Tenants include Wincanton, Perspex International, Steel Dynamics, NeoNickel (Blackburn), Pentland Wholesale and Carlisle Interconnect Technologies.

Manchester-based The Property Alliance Group also bought in Lancashire recently, acquiring a 32,166 sq ft industrial unit in Blackpool for £1.3m. Smaller units are also in high demand in Lancashire, with PJM Property Investments acquiring Cuerden Green Mill in Lostock Hall and other units at Charnley Fold Lane at Bamber Bridge, plus the group bought Gaskell House in Rough Hey Road, Preston.

PJM director Patrick Murphy told LBV:

“The demand for good warehouse space is high. Our model is based on acquiring, adapting, and modernising commercial properties to make them attractive to new occupiers.

“All three of these properties will help us support the Lancashire economy by providing viable spaces for growing businesses in thriving locations.”

Supply difficulties

Industry experts say the wider North West market reflects the industrial property market nationally which is characterised by a significant supply shortages coupled with strong occupier demand, leading to competition the available units and increasing rent levels.

New builds held back

Building work has been hampered by the pandemic and more recently by bad weather. The February storms led to a hold up on building sites but the construction industry says it’s now on track for a sustained long-term recovery.

Figures from The Office for National Statistics (ONS) show that there was a 0.1 per cent decrease in construction output in February over the previous month. With storms Dudley, Eunice and Franklin, having a big impact in the north. They caused disruption that was untypical for the time of year, prompting the complete closure of construction sites with overruns and delayed progress on projects.

Beard Construction finance director Fraser Johns has said that there are long-term signs of recovery, demonstrating “the resilience of the sector”.

War and inflation

The next big challenge would appear to be supply issues and increasing prices. Gareth Belsham, director of national property consultancy and surveyors Naismiths, told LBV that the latest data painted a picture of the industry “on the eve of war”, referring to the Russian invasion of Ukraine in February. Since then, the industry has seen the impact of the ongoing conflict along the global supply chain, he said.

“Construction is highly reliant on global supply chains for building materials, and the imposition of tough sanctions on Russia following its invasion of Ukraine is now disrupting the supply of key materials, including steel and timber,” Mr Belsham said.

Last week the Construction Leadership Council said building material suppliers were issuing quotes that were valid for only 24 hours, “as fears of inflation rattled the industry.” This has been attributed to both the Russian invasion and the pandemic.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Demand for industrial property outstrips expectations | LandlordZONE.

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