London renters pay the price for going all-inclusive

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Average rents with bills included have jumped by a staggering £1,022 a month in London since April, according to new research. 

Renters are paying an average of £3,045 per month, a 51% increase on the £2,023 paid in April, while those paying their rent and bills separately are still only forking out £2,781 per month – up from £1,964 – that’s £265 less a month than the average rent for a property with bills included, says lettings agent Benham and Reeves.

In the Spring, the difference between the cost of paying bills and rent in one payment compared to paying rent and bills separately was just £59 a month.

Rental stock

Although only 5% of available rental stock covers the cost of bills within the monthly rent, with rising energy bills, demand is growing and 34% of these have already had a let agreed, up from 26% in April. Availability is at its highest in Brent, where 12% of all listed rental properties include the cost of bills, followed by Hounslow and Barking and Dagenham (10%). 

Out of pocket

Director Marc von Grundherr says the increase in rent isn’t down to savvy landlords trying to offset their own high energy costs, but the reality of the current situation. “However, it’s important for landlords to consider just how much they may be in line to pay should they find themselves with a tenant who plans to work from home this winter, as it could leave them out of pocket even when charging a rental premium to cover the increase in running costs,” he advises.

“At the same time, any landlord who does opt to keep the bills in their name may also find themselves liable should their tenant fail to cover these costs.”

View Full Article: London renters pay the price for going all-inclusive

Council backtracks on plans to clamp down on short-term lets

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Brighton & Hove has failed in its attempt to restrict second homes and holiday lets in the city.

The council had hoped to clamp down on landlords profiting from the staycation boom amid fears that the sector had impacted on the availability of long-term rentals and forced up rental prices. However, Labour councillors were unable to win the support of other political parties for plans to set up an online registration scheme.

Tourist industry

Labour Councillor Amanda Evans asked the council’s tourism, equalities, communities and culture committee to support a proposal, reports The Argus. She told the meeting: “It’s not just individuals letting out a room a couple of times a year. There are a lot of professionals involved with this now who are making a lot of money, not paying tax on it and harming our tourist industry as well. It causes misery and has a knock-on effect on our already crisis-hit housing market.”

Committee co-chair councillor Martin Osborne said while he supported the idea of a registration scheme it should be a government-regulated national scheme. The committee agreed to support sending a response to the government’s ongoing consultation into the sector, providing evidence about the problem and detailing how housing demand and rising private sector rents have an adverse effect on the affordability of housing.

Party houses

A Brighton and Hove City Council report says that more than 3,000 properties could currently be in use as short-term holiday lets – some of them as party houses.

Earlier this year, the DLUHC was reportedly drawing up plans to ban second homeowners from renting out their properties on websites such as Airbnb by giving powers to regional mayors to restrict people renting out second properties for fewer than 90 days. Instead, landlords would have to apply for planning permission for a change of use.

View Full Article: Council backtracks on plans to clamp down on short-term lets

Government gives Midlands’ mammoth selective licensing scheme the go-ahead

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The UK’s biggest selective licensing scheme has been given the green light in Birmingham covering between 40,000 and 50,000 properties.

The city council had approved the scheme in March, covering 25 wards including North Edgbaston, South Yardley and Sparkhill where there are high levels of deprivation and/or crime, but needed permission from the government because of its size. Landlords will now have to pay £700 for a licence from 5th June, generating an income of £28 million for the authority.

Poorest wards

Councillor Sharon Thompson, cabinet member for housing and homelessness, says it will create 130 new jobs to deliver the scheme. “We want to ensure that private properties in our poorest wards are providing fit and proper accommodation and that landlords are adhering to their legal responsibilities,” she adds. “While many already do, the introduction of licence conditions that cover a range of issues including waste bins, references and tackling anti-social behaviour will ensure the council is in a position to engage and regulate this sector appropriately.”
 
Through the scheme, Birmingham aims to join up with other services such as the police to tackle high levels of crime in the 25 wards.

Flyer drop

The council carried out a large consultation before making the decision, including a flyer drop in all 125,000 properties in the 25 wards. It gathered 800 responses, with “significant support” from residents and businesses however, 77% of landlords and managing agents disagreed with the proposals.

Birmingham Council has recently finished consulting on an additional licensing scheme across the city that would include 12,000 properties in all 69 wards, which if approved, would launch on 1st April.

View Full Article: Government gives Midlands’ mammoth selective licensing scheme the go-ahead

Selling an HMO

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Hello, We’re thinking of selling a fully tenanted and licensed 5 bed HMO in Aylesbury.

Does anyone have any experience of this process and options to sell with tenants in situ?

We’re aware of Vesta and are waiting for a call back from them.

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Most landlords are supporting their struggling tenants

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With most tenants making lifestyle changes to cope with the cost-of-living crisis, it has been revealed that three-quarters of residential landlords (75%) are supporting their tenants.

The findings from Shawbrook Bank highlight the steps that landlords are taking with news that 85% of renters have made changes to deal with inflationary pressures and 25% of landlords have frozen their rent.

View Full Article: Most landlords are supporting their struggling tenants

Opinion: landlords, get your priorities right in these times of sky high energy prices

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There’s a changing of the guard at the palace with the sad passing of our beloved Queen, and at Number 10 with Liz Truss’ new team.

With Truss, a qualified chartered accountant, and chancellor Kwasi Kwarteng, a PhD in economics from Cambridge, between them they should be getting the numbers right – and by all accounts they will need all the arithmetical powers they’ve got to do that in the present economic climate.

As the country leaves behind the incessant Number 10 controversies, Truss’s staid accountant’s world, contrasting with the previous incumbent’s, it should give investors confidence that she knows how to tackle an energy crisis, a crisis brought on by the biggest European war since WWII.

Insulating makes sense

But is seems an oversight to me that the government’s proposed policies of tax cuts and energy subsidies miss the low hanging fruit of improving housing insulation.

I certainly don’t agree with their methods, but the Extinction Rebellion drive to improve home insulation makes a lot of sense when according to The Department of Business, Energy and Industrial Strategy, one-third of all those homes with a loft don’t even have loft insulation. And a goodly proportion of these will be rentals.

You really don’t need to be an accountant to work out that heating a home at great expense and having that heat disappear quickly through the roof, walls and windows, in a poorly insulated home, is seriously uneconomic. Not only that, it leads to health problems when tenants cannot afford to heat their inefficient homes properly.

There’s nothing planned as I can see to to replace something like the Green Homes Grant that was cancelled last year. This would pay up to two-thirds of the cost of simple improvements that could be very cost effective in saving energy – draft proofing, fitting energy efficient boilers, thermostats on radiators, low energy light bulbs, wall and underfloor insulation, as well as loft insulation.

In fact even without Government help, fitting basic insulation and other measures can easily be tackled by most landlords, home owners and even tenants by applying very basic DIY skills. The payoff is out of all proportion to the cost of the materials.

A new Green Homes Grant scheme, even a simplified one, could perhaps be more cost effective long-term than the money that will be pored into keeping the wholesale cost of gas and oil down. Such a scheme like that should not be beyond the capabilities of a good accountant, and preferably a scheme that avoids the profiteering that often accompanies such Government initiatives.

Old property stock

Much of the rental property stock in England is older and often poorly insulated, much of it with single brick or solid masonry walls. These properties are inherently inefficient and expensive to heat compared to a modern home with cavity wall insulation, underfloor and loft insulation, as well as double or even triple glazing and an energy efficient heat source.

A government drive to improve the country’s housing stock in this way would not only help the government achieved its energy saving and environmental targets, it would drastically cut down on energy usage at a time of extremely high prices – it would improve people’s lives at comparatively low cost, and might just cut down the huge energy subsidies we are now expecting.

Improving lives

As a landlord you should want to improve the lives of your tenants and well as the energy efficiency of your property, indeed further down the line you are likely to be compelled to do so. Most properties will be targetted to reach EPC grade C by around 2025 when a new Act becomes law.

Government financial help or not, and an energy crisis or not, the objective is still to increase energy efficiency and achieve the Government’s committed net-zero carbon targets. A big part of that will be a drive for greater energy efficiency in peoples’ homes. All newly rented properties will require an EPC of at least Band “C” when the Minimum Energy Performance of Buildings (No. 2) Bill becomes law.

Then, the proposal is that all existing tenancies will have until 31st December 2028 to reach this new target. For most properties this target should be achievable by practical, affordable, and cost-effective upgrades that could if necessary be largely implemented by simple DIY improvements. The fines for not having a valid EPC will be increased from £5000 to £30,000.

These new measure are expected to come into effect this year, though given the current situation in Parliament, this may get delayed. But what’s more, The Renters’ Reform Bill white paper currently under consultation includes measures to deliver on the Government’s levelling up housing mission to halve the number of non-decent rented homes by 2030.

Decent Homes Standard

This will require privately rented homes to meet the Decent Homes Standard for the first time. This is intended to give tenants “safer, better value homes and remove the blight of poor-quality homes in local communities.”

We’re not there yet, but these measures will come down on landlords that don’t make the effort to bring their rental properties up to modern standards. Tenants will be given the power to claw-back their rent payments if they are deemed to be living in sub-standard conditions.

Incentivise improvements

My argument is that the Government should seriously consider incentives to encourage landlords to improve standards in their properties right now. This would be highly cost effective because of the energy it will save – far better to insulate and save the cost than subsidising wholesale prices of oil and gas, energy usage which will go through the roof.

If you know your properties need improvements, why not start planning to carry out the work sooner, rather than later.

View Full Article: Opinion: landlords, get your priorities right in these times of sky high energy prices