Is hybrid working the future and what are the implications for property?

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A wide range of research has been conducted recently about the shift to hybrid working. A YouGov survey and CIPD research, indicate that after the pandemic many workers would like to continue to work from home at least some of the time.

On the one had this presents new opportunities for organisations to establish new ways of working, but what are the implications for property owners and the support infrastructure for city centres: coffee shops and restaurants, apparel stores and transport?

According to the CIPD research, some 40% of employers said they expect more than 50% of their workforce will regularly work from home after the pandemic has ended. This shows a dramatic shift from the pre-pandemic position when Office of National Statistics showed that only around 5% of the workforce worked mainly from home.

What is hybrid working?

Hybrid work has many variations: some companies may allow every employee the flexibility to work on-site and remotely part of the week, while others will insist on full-time on-site, or some combination of these two. A lot depends on the characteristics of the work and while some employees are lucky enough to be able to work remotely, for others that’s an impossibility.

Recent research by a US market intelligence company, Wakefield Research, found that almost half of employees (47%) would likely look for another job if their employer doesn’t adopt a flexible working model.

So clearly, post-pandemic, many employees see value in hybrid working. Although there are undoubtedly advantages in this type of working, many employees and employers see this as a perk, and the media often touts the part-remote, part-office schedule as the future of work, some employees say they have never been so tired.

One London office worker quoted by the BBC saw her company’s hybrid policy “initially came as a relief,” but as time went on the novelty of hybrid work soon gave way to hassle and a jarring one-day-in, one-day-out routine.”

From the employer’s point of view, the lack of synergistic contact within teams, security issues, the difficulties around monitoring and co-ordinating work flows and the difficulties when it comes to inducting and training new staff all detract from home working.

Organisations deciding to offer hybrid working will require a significant culture shift to establish new ways of working and the associated policies and practices. Lessons have been learned though the pandemic, but hybrid will undoubtedly make greater demands on managers and organisations. Time without the disruption of Covid may well see a drift back slowly toward mainly office based work?

Rethinking urban centres

Many planning experts are calling on central and local government to recognise that the purpose of city and town centres needs a major re-think. Some advocate a greater mix of uses with more emphasis on leisure activities and residential living, meaning many retail spaces would be repurposed. Others foresee more local work, with people tired of long commutes opting to work in a new generation of flexible offices based in their communities.

Andrew Almond, Partner at property consultants Pick Everard says that: “adaption is part of the picture moving forward”. This is unlikely to “fully address the void” left by businesses moving away from cities but, “I believe city centres need to become centres of excellence. We need to see cities specialising more in the areas that they are good at and the areas where they have assets that already support them.”

For urban centres that might mean supporting industries which require workers to be physically present, to create footfall. In smaller towns it might mean backing independent retail and other local businesses.

“The retreat of national retailers opens the opportunity for local businesses and I consider that to be a really good thing,” says Almond. “They’re a great source of vibrancy, variety and innovation, and they’re fantastic for local identity.”

The impact on property

During the peak of the lockdowns, commercial real estate companies went from fearing that their office buildings would be abandoned for good, to being optimistic about keeping most of their corporate tenants. However, the sector will need to go through important changes in order to stay relevant in a post-pandemic and environment friendly world.

The reality is that even if companies don’t leave their offices, they are very likely to demand reconfiguration and perhaps need less space in the future. Many are on leases which will take time to come to an end, so the crunch will come some time in the future for many property owners. In addition, legislation is likely to demand some major changes to office space for environmental reasons which would be better accomplished in vacant premises.

The changes brought about by the pandemic, changing working practices and the accelerated digitalisation of organisations, mean that landlords will have to adapt their premises to new ways of working.

Shared spaces and break-out spaces are likely to come to the fore with many employees coming in to their companies offices to brainstorm and socialise with colleagues as much as to do actual routine work. Tenants will want their buildings fit for future environmental standards as well as for any future pandemic, in particular with work spacing and more efficient air purifying systems.

Serviced offices

One sector likely to benefit the most from the shift in working patterns is with the serviced office providers

IWG.plc (Regus) the company that claims to be the world’s largest flexible workspace company, forecasts that hybrid working will continue to accelerate throughout 2022, bringing, “social, economic and health benefits to businesses and employees.”

IWG cites research by Global Workplace Analytic which claims to show that the adoption of hybrid working, and utilisation of flexible office space can significantly reduce a business’s cost base, saving on traditional fixed overhead costs including rent, heating, and support staff, adding up to an average of £8,100 per employee.

Financial savings for businesses aren’t only generated by reducing utilities needed within an office, says IWG Regus, they can also be created by changing the location of the offices themselves. Office buildings are typically concentrated in expensive city centres, which often means long commutes for staff.

IWG Founder and CEO Mark Dixon argues:

“The rapid global rise in the adoption of the hybrid-working model, where companies use technology to give their employees effective remote access and home working, in combination with easy-to-access local centres and traditional head-office sites, is here to stay. Not only do employees benefit from a dramatically improved work-life balance, but the model also represents a significant win for a company’s bottom line as well as employee bank balances. By switching to a hybrid model, businesses can expect to save an average of £8,100 per employee, all while minimising their carbon footprint.”

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Six compliance traps to avoid!

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If you’re a DIY landlord, don’t get caught out by upcoming changes to rental regulations. The experts at Belvoir advise…

1. Extension to smoke alarm regulations. Don’t ignore faulty smoke and carbon monoxide alarms! If landlords are informed that their smoke and carbon monoxide alarms are faulty, they are now legally required to repair or replace them.  Landlords must also ensure that a carbon monoxide alarm has been installed in any room where there is a fixed combustion appliance (including a gas boiler). In addition, when a new fixed combustion appliance is installed, landlords are legally required to install a carbon monoxide alarm. Although the implementation date for this is yet to be announced in England it has been enacted, so check those alarms!

• Levelling Up – On 2^nd February 2022 Michael Gove, Secretary of State for Levelling Up, Housing and Communities launched the long-awaited Levelling Up White Paper. This policy aims to shift focus and resources away from London and the South East and into some of Britain’s forgotten communities throughout the 2020s. The White Paper centres around 12 quantifiable missions, including a pledge for all homes within the PRS to meet a minimum standard – The Decent Homes Standard. Section 21 ‘no fault evictions’ would be abolished, and the Government is also consulting on the introduction of a Landlords’ Register to help crack down on rogue landlords. For more information, visit https://www.gov.uk/government/news/government-unveils-levelling-up-plan-that-will-transform-uk or talk to your local Belvoir agent who will be able to guide you through all of these upcoming changes as they unfold.

• The Leasehold Reform (Ground Rent) Act aims to help tackle inconsistency and ambiguity of ground rents for future leaseholders and is due to be implemented imminently. The Government is also aiming to protect owner occupiers and landlords of one property from bearing the brunt of the costs of correcting cladding issues, but this does leave portfolio landlords potentially exposed.  

• Fire Safety Act – The new Fire Safety Act 2021, designed to strengthen fire safety for multi-occupancy residential buildings is due to be implemented in the near future, this widens the definition of buildings that may need to address further fire safety requirements. The new legislation applies to:
• The building’s structure and external walls (including windows, balconies, cladding, insulation and fixings) and any common parts
• All doors between domestic premises and common parts such as flat entrance doors (or any other relevant door). For more information visit: https://www.gov.uk/government/publications/fire-safety-act-addendum/fire-safety-act-addendum

• Take care of admin! To stay on the right side of the law it is vital that landlords pay attention to detail. For example, ensure you serve terms and conditions within the tenant deposit scheme as well as the prescribed information, and obtain permission to serve the how to rent guide electronically before you do so, or it will not be considered served. Test smoke alarms ON the actual move in day, not when the inventory is done. These, and many other essential details, are all things that a reputable agent can do for you.

• Energy Performance Certificate (EPC) changes. Belvoir is currently awaiting confirmation of the next phase of the minimum stage of EPC requirements to move from the current level E to a level C on new lettings by 2025 and existing lettings by 2028. The changes aim to reduce energy bills for tenants and increase the quality, value, and desirability of a landlord’s assets.   

Wales

The long-awaited Renting Homes Wales Act is being implemented on 15th July 2022.  This is a major change in legislation for the PRS in Wales, changing the nature of tenancies from Assured Shorthold Tenancies to ‘occupation contracts’. The changes included a mandatory six-month notice period after a six-month minimum term for non-fault evictions, some succession rights, required terms and ability to change occupants when a joint occupation holder leaves without a new tenancy being completed. 

Scotland

Scotland has already implemented many changes to the rental market, however there is currently a consultation underway to move towards further tenants’ rights. A reputable agent will keep landlords up to date with all new developments.

Northern Ireland

The Private Tenancies Bill, which does not yet have an implementation date, contains several changes that will affect the PRS in Northern Ireland. The changes will impact notice periods, rent receipts, tenant deposits, rent increases, smoke alarms, energy efficiency and electrical safety regulations. Failure to implement the new rules will incur penalty breaches and fines. Belvoir will have all the amended processes in place to ensure that landlords remain compliant with the new laws, so make sure you have a chat with your local agent.

To find your local Belvoir office, visit belvoir.co.uk/offices

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Six compliance traps to avoid! | LandlordZONE.

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Daft TikTok videos tell tenants how to get around ‘no decoration’ contract clauses

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TikTok videos watched by millions of people advising tenants to get around ‘no decoration’ clauses in rental contracts risk causing more headaches for landlords, according to trade professionals.

One ‘renter-friendly wallpaper hack’ suggests tenants should use painter’s tape, followed by double-sided tape in ladder formations on their walls to hang wallpaper. Toolstation reckons it’s the second wort DIY hack on the social media platform, despite gaining more than 43,000 likes.

It polled 100 professional painter and decorators, 82% of whom warned against it. Explains one: “If it is a rental and you can’t decorate, the painter’s tape and double-sided tape will leave ladder marks.

“The longer it is left up, the worse it will be. It is not a hack I would use. I would go back to the landlord and ask permission to paper a feature wall.”

Complete shower

Landlords might also want to check that tenants haven’t been watching a shower pressure video – along with 4.8 million others – that suggests removing a flow restrictor from a showerhead, but isn’t recommended by 65% of professionals.

One plumber and bathroom fitter warns: “Flow restrictors are in place for a reason – removal can cause temperature issues, especially in the case of combi boilers. I would say never remove them unless the manufacturer clearly states they can be removed entirely.”

Another water leak hack suggesting home DIYers place an epoxy ball into a pipe to stop a water leak has had more than a million views on TikTok, however 87% of professionals reckon they should leave well alone.

“I feel that will not work and for the UK you will be contaminating the water supply as you have introduced a foreign body into the water supply,” advises one plumbing and heating engineer.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Daft TikTok videos tell tenants how to get around ‘no decoration’ contract clauses | LandlordZONE.

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These landlords sold 75 BTL properties in less than 2 weeks with tenants still in situ

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There’s no doubt that now is the time to start downsizing our property portfolios. With many of us reaching our 50s and 60s, the property machines we built have become more of a financial burden than a financial gain. Taxes

View Full Article: These landlords sold 75 BTL properties in less than 2 weeks with tenants still in situ

Licencing – Financial tsunami incoming?

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With Selective Licencing now coming to Birmingham I have been trying to get a grip on what this means financially by reading other landlords’ experiences/demands by councils to achieve certain requirements.

Has anyone managed to get a ball park figure of what it has cost them to ‘upgrade’

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Government swings behind heat pumps with £30m fund to install 5.5m by 2030

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The government will spend £30 million making British heat pumps this year as part of its bid to reduce demand for gas and address the current energy crisis.

A Heat Pump Investment Accelerator Competition is part of the UK Energy Security Strategy to ‘supercharge’ clean energy and expand nuclear, wind, solar, hydrogen, oil and gas, while supporting domestic oil and gas production in the short term.

It follows the announcement of the Boiler Upgrade Scheme last week, allowing landlords to claim £5,000 towards the cost of an air source heat pump.

The Heat Pump Association has welcomed the news after calling on Ministers to help strengthen the UK supply chain and remove barriers to installation.

Chair Phil Hurley (pictured) believes it has never been more important for heat pumps to be deployed at scale in UK homes. “We remain committed to collaborating with government and industry to make this happen,” says Hurley.

“Not only can heat pumps reduce carbon now but their benefits will increase over time as the grid continues to decarbonise.”

The government hopes to fit 5.5 million heat pumps in UK homes by 2030 with the aim of phasing out all gas boilers by 2035. However, the Chartered Institute of Plumbing and Heating Engineering has previously warned that the infrastructure is not in place for wholesale adoption of low carbon heating and that 100,000 engineers trained to install the new technology are needed. 

The Energy Security Strategy published yesterday (7th April) includes an ambition to produce up to 50W from offshore wind by 2030, more than enough to power every home in the UK and also promises to look to increase the UK’s current 14GW of solar capacity by up to five times by 2035, by consulting on the rules for solar projects, particularly on domestic and commercial rooftops.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Government swings behind heat pumps with £30m fund to install 5.5m by 2030 | LandlordZONE.

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Will developers reach a satisfactory cladding deal with Michael Gove?

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UK developers and the housing secretary Michael Gove are nearing a deal that could resolve a large part of the building safety crisis highlighted by the 2017 fire at London’s Grenfell Tower – a horrendous fire that killed 72 people – reports the Financial Times (FT).

Mr Gove has been pressing the sector to release more funds for fire remediation work on mid-rise blocks between 11 and 18m tall. The housebuilders and the UK government have been locked in talks since the start of 2022 and there are now signs that progress is being made.

The cost estimates

It has been estimated by Mr Gove’s department – The Department for Levelling Up, Housing & Communities – that the cost of addressing safety issues on blocks in this height range at £4 billion. His idea is to have the developers pay by imposing an annual levy on the sector that will be used to repair the affected buildings.

One developer, UK housebuilder Crest Nicholson, has announced that it is planning a big increase in the amount it is setting aside to fix flats with fire safety problems – a sign that Mr Gove’s tough stance is having some success, says FT.

The FTSE 250 company has said it is willing to set aside between £80 million and £120 million for alterations to any of its mid-rise buildings that require fire safety work. This amount of spending would be substantially above the £47.8 million it has already paid out to deal with the safety issues.

Crest Nicholson is the first builder to make an announcement that it had signed up to the pledge and to put a figure on the forecast cost of remedial work. The pledge has since been followed by three other major UK house builders: Taylor Wimpey, Persimmon and the Berkeley Group.

Taylor Wimpey is making provision for an additional £80mn on top of around £165mn it has already provided for fire safety work, while Persimmon has promised to remediate every mid-rise block with fire safety issues that it has built in the past 30 years, without increasing its already announced provision of £75mn. Berkeley, it seems, has not disclosed its estimate of the cost of providing its own remedial fire safety work, but crucially it has made the commitment.

More house builders are now expected to follow these leaders after Mr Gove gave the sector until the end of March to come up with a fully costed plan to remediate mid-rise buildings they are responsible for.

Another developer, Bellway, has indicated that its remediation costs could be almost treble the £187mn it had already set aside, but it has not come up with the exact figure.

No further Government work

Developers have been told that if they do not sign up to the pledge they will be locked out of government housing funds and the planning process in the future, a measure that would severely limiting their ability to operate successfully.

Since he took over from Robert Jenrick as housing secretary in September 2021, Mr Gove has ramped-up the pressure on housebuilders to resolve the cladding fire safety crisis that has left tens of thousands of homeowners and some landlords facing potentially life changing costs. They are stuck in properties (mainly high rise flats) with fire safety problems that are making them effectively unsaleable.

Some issues still unresolved

Progress in the talks has been welcomed by Government and leaseholders alike, but there still remain some difficult unresolved issues, such as who pays for fixing those blocks needing remediation where the builder went bust or cannot be located?

Clyde Lewis, an analyst at Peel Hunt, told the FT that Crest Nicolson’s announcement was a sign that the sector was coming closer to accounting for the crisis, but that costs would vary considerably between builders.

“It all depends on what they have built historically: it will come down to who has built lots of mid-rise blocks and who has not. Redrow and Persimmon have built very few; Barratt, Berkeley and Bellway have built a lot.”

A spokesperson for Mr Gove’s housing department has said: “We welcome the developers who have signed pledges so far and we have the powers to impose a solution in law if those in scope do not do the same.”

Government sets out new plan to protect leaseholders and make industry pay for the cladding crisis

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Will developers reach a satisfactory cladding deal with Michael Gove? | LandlordZONE.

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House price growth records unlikely to last

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The latest Halifax House Price index reports March recorded the biggest monthly increase since September last year with house price growth of 1.4%. The average property price has now reached £282,753, meaning two years on from the first lockdown, house prices have risen by £43,577.

View Full Article: House price growth records unlikely to last

Paul Shamplina seeks big hitter landlords who could pack a punch for charity

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Landlords who fancy being big hitters are being invited by evictions expert Paul Shamplina to join him in the boxing ring.

The Landlord Action founder has for the past six years run an annual charity boxing event to raise funds for various local and national charities, raising in total some £115,000.

Each year Shamplina seeks out and then offers rigorous ringside training to a clutch of recruits ahead of the gala evening event which this year is on 22^nd September at the Holiday Inn hotel at 58 Regents Park Road, N3.

Those watching during the Rumble with the Agents event get a three-course meal, unlimited drinks and the opportunity to watch both the novice and more advanced boxers do six minutes in the ring, all for £160 a ticket.

For those who would like to be one of the boxers, Shamplina says it’s an ideal opportunity to ‘get fit for summer, be a hero for six minutes, learn to box and raise money for charity’.

‘One more’

Shamplina says this may be the last time he boxes in public. Last year he had to withdraw at the last moment after contracting Covid, and says he’s got ‘one more year’ left in him.

“Last year we raised some £12,000 for Cherry Orchard Cancer Care and I was gutted not to be there,” he says.

“We will be confirming our chosen charity for this year’s even in the next couple of weeks.

“Last year’s event was extremely well attended by landlords, agents, property professionals and suppliers, and we’re hoping to make this year even bigger.”

To contact Paul either email him or call him on 07956 414 254.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Paul Shamplina seeks big hitter landlords who could pack a punch for charity | LandlordZONE.

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Does our tenant have to pay CGT after 10 years?

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A few months ago an email was sent to our PDPLA (Portsmouth and District Private Landlord Association) mentioning that tenants must start paying CGT (Capital Gains Tax) after 10 years in the same home!

It vaguely rang a bell

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