Foot-dragging on Renters Reform Bill ‘damaging PRS’, says big property firm

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The seemingly endless delays to the Renters Reform Bill are prompting landlords to leave the market due to uncertainty around potential changes, says one property expert.

Despite former Housing Minister Simon Clarke recently assuring Parliament that the Bill would be introduced in the next parliamentary session, in practice this means any time before spring 2024, according to Joanne Millward (pictured), divisional lettings coordinator at property consultancy Fisher German, who believes this is creating anxiety in the sector.

The white paper, A Fairer Rented Private Sector, aims to reform rules around the rental sector and includes a commitment to replace Section 21 evictions, the adoption of a Decent Homes Standard and appointing a new ombudsman – but still has no definite date.

Press ahead

Millward is urging the government to press ahead with putting the Bill through Parliament as she says that although the proposed reforms will not be entirely helpful to landlords, the delay is causing harm.

“The industry is essentially stuck in limbo until we know the details of what will appear in the legislation,” she says.

“While the white paper improves rights for tenants, some of the proposals in it will make becoming a landlord more difficult and will give current landlords more problems to deal with.”

It’s yet another reason for many to sell up, reducing rental stock across the country, adds Millward. “The supply of rental housing is already under strain in the UK, and this delay is only making it worse by discouraging landlords to keep going.”

Read more about renting reform.

View Full Article: Foot-dragging on Renters Reform Bill ‘damaging PRS’, says big property firm

Landlord vents anger at councils who tell bad tenants to ignore eviction notices

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A concerned landlord has shared his frustration at the way councils manage problem tenants facing eviction by telling them to stay put while they are found alternative accommodation, informing the tenants that they will be making themselves ‘intentionally homeless’ if they move out.

His “tenant from hell” was physically violent, had mental health issues and threatened neighbours, while wrecking his house – but he ended up having to bear the burden.

After he served a Section 21, she found another property, but became violent before moving in and the new landlord refused to give her a tenancy. However, the council insisted that she move back to her original home because she had a six-month tenancy.

“I tried to persuade officers that it would have been more sensible to get a court to grant possession, as there was a strong likelihood of the tenant being homeless very soon, requiring me to incur unnecessary and substantial costs,” he tells LandlordZONE. It refused.

Insult to injury

To add insult to injury, despite having provided evidence to Universal Credit, including a statement from the prospective landlord and council that she didn’t move in, it refused to reinstate benefits to his property as she’d told them she had moved.

While advising tenants to remain until bailiffs arrive or a court order is produced, councils don’t warn tenants about the possible consequences of such an action, says the landlord.

Bailiffs or High Court Enforcement Officers can turn up without notice so tenants have an hour to vacate, putting their belongings at risk, while the landlord can then get an order for costs and a County Court Judgement against them, which affects their credit record and might also dissuade prospective landlords from offering accommodation.

“It seems this policy of advising tenants not to move happens, not because it is the right thing to do but because it is the easiest option given the problems, cost and officer time associated with the alternatives,” he says.

Read more about evictions.

View Full Article: Landlord vents anger at councils who tell bad tenants to ignore eviction notices

TOM ENTWISTLE: ‘Preparing a boiler for winter in rental properties’

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As winter approaches landlords’ thoughts turn to frozen pipes, water leaks, damp and condensation in rental properties.

And Boilers provide the heat that will prevent all of this so they need your special attention.

These issues are what landlords’ nightmares are made of. They all have the potential to wreck your property and can cost you a fortune to put things right if there’s a massive water leak, not to mention the rental income you’re likely to miss in the meantime. Insurance might cover some, or all of the cost if you’re lucky, but that doesn’t cover the anguish it causes you and your tenants.

The thing is, all of this is avoidable given the right kind of attention played out by you and your tenants. But you as a landlord can only do so much.

It needs attention given to the issues by your tenants to prevent these problems, especially preventing frozen pipes which lead to busts. It also needs basic education in many cases – tenants are not always aware of what’s needed, especially if they’re young and have never managed a home before.

Importance of the boiler

Central heating boilers, which also supply hot water, are usually of the combination type and ubiquitous in rentals. At an average cost of around £2,000 plus fitting they are perhaps the most expensive item in the rental. They require regular servicing, and mandatory checks by a Gas Safe engineer if they run on gas.

Boilers also pose a potential risk of producing deadly carbon monoxide (CO) gas if they are not properly serviced, so it’s important to have a CO monitor in close proximity to the device. Occupants also need a certain amount of knowledge to make sure the controls and settings are optimised, that the system remains pressurised at the correct level and that any air in the system is bled out from the radiators from time to time, to maintain efficient operation.  

What can the landlord do?

My preference is to explain to my tenants exactly what they need to do as winter approaches. Total landlord’s guide to boilers and heating contains lots of useful information, from how to bleed radiators to top heating tips for tenants. First off, boiler controls. Explain how they work and how to set the thermostats in rooms and those fitted to radiators, how to set timers and monitor the system pressure.

Most tenants should be capable of bleeding the radiators if necessary, but they need to know that after bleeding the system it will need to be repressurised correctly, at the boiler. If the system pressure should drop repeatedly then there is most likely a fault with the boiler or a leak in the system, so the landlord should be informed.

I believe that keeping the house on a low heat when you are out or away from your home for a short time is vital to prevent pipes freezing up. And in the long run it is more economical than having to re-heat your home from cold every time you come in.

Prevening condensation in the home is also key – by venting steam at its sources, such as when cooking or bathing. Using the extractor fans, which should be provided, is the answer. I also warn about the results of drying clothes indoors and on radiators – this will cause a lot of condensation.

In addition to explaining these issues very clearly to tenants I provide written guidance as well, a winter letter if you like, that explains about the precautions that tenants need to take. For example, in this case study on call out charges for boiler repair, mydeposits explain the importance of tenants reporting any issues at the time they occur.

Most rental properties with central heating these days have a boiler of some kind, be that gas, oil or in some country areas liquefied petroleum gas (LPG).

These boilers need to be serviced and it’s a good idea to schedule your annual gas checks and gas boiler service to coincide with the start of winter so you know it’s safe and in good working order to last trouble-free throughout the winter – if it’s a really cold winter then your boiler is going to be working 24/7.

Condensation debate

Condensation, damp and mould occur when tenants don’t have enough heating on, letting the temperature fall so low that there are lots of cold surfaces where water will condense. Secondly, because it’s so cold, tenants will keep all the windows tightly shut and therefore any steam generated by cooking, washing and drying clothes is trapped inside, simply condensing on all the cold surfaces.

I’ve even seen tenants block up extractor fans. It’s a vicious cycle that gradually results in harmful black mould appearing everywhere. Total Landlord has produced a very useful tenant checklist for landlords to print off and give to their tenants, to help them recognise damp and including tips to keep the property free from condensation and mildew.

You can download it here. You can also read Total Landlord’s ultimate guide to identifying and preventing damp, mould and condensation for more information and listen to their podcast[1]  on this topic, which is packed with advice for landlords and agents, featuring guests from mydeposits and HF Assist.

Automatic extraction

There a few things you can do in addition to trying to educate your tenants. One is to fit automatic extractor fans in the kitchen and bathroom. These are normally closed to prevent cold drafts, and only operate when the humidity reaches a certain level, but they are highly effective.

The only drawback to the automatic extractors is they are removing warm air from the house which will only be replaced by colder air seeping in through gaps – it’s expensive to throw away warm air when you’ve paid to heat it up.

The next stage up is a full house ventilation system which recycles the warm air. Fitted in the attic space, an air pump circulates air around the house. These mechanical ventilation systems with heat recovery (MVHR) are a whole house ventilation system that both supplies and extracts air throughout a property. Heat recovery is used to reduce the heating and cooling demands of buildings.

They typically recover about 73–95% of the heat in exhausted air and will significantly improve the energy efficiency of a house.

Going to the expense of such a system would make most landlords pause and think, but if it can result in the prevention of a bad case of condensation and black mould and make the lives of your tenants better, then it may well be worth it.

These systems are best fitted when you are doing a full renovation or building a new house rather than a retrofit, but if you consider this is appropriate, it will help you meet the more stringent energy efficiency targets coming down the line – EPC level “C” is likely to be the next target set by the Government.

What can the tenants do?

Tenants should follow the advice given, maintain a low heat at all times especially when the weather is very cold, and if they go away, say at Christmas. They should vent steam at source and avoid wet clothes drying indoors. They need to familiarise themselves with the boiler and thermostat controls and inform the landlord immediately if things go wrong.

Replacing boilers

Boilers have a lifespan, so you should budget for their replacement after a reasonable time. The life expectancy of a boiler will depend on the type of boiler you have. On average, a standard gas combination or stand alone boiler will last for 10 to 15 years and if you’re lucky a good quality boiler might function normally for over 20 years, that’s providing it is well maintained and serviced annually. 

The advantage of replacing a central heating and hot water boiler is that technology moves on quickly. A 10 year old boiler may be well out of date and difficult to get spare parts for, plus you will probably find that its replacement is not only smaller, but much more energy efficient. A modern condensing boiler that is capable of collecting gas generated by burning fuels, like gas and oil, and used to heat water entering the system, saves a lot of money and reduces carbon emissions in the process.

Repairing boilers when they break down, if they are above a certain age, can be uneconomic. It’s also the case that spare parts become more difficult to source and there may be a long wait, which your tenants won’t thank you for.

Service contracts

If you want to reduce the hassle if a boiler does break down, you may have considered using a breakdown service such as those provided by British Gas or Homeserve, or you may know a local heating engineer who attends quickly. The main problem is, these things generally break down when everyone needs an engineer, so unless you have some influence with local engineers, a breakdown service is worth considering.

Replacing the boiler

Replacing a stand alone boiler – which usually takes up a lot of space – with a modern combination boiler, which is much smaller, gives you great flexibility as to where you place the boiler. It means that water tanks, say in a cupboard or in the attic space, along with pipework, are no longer needed, and this may release even more space.

General property maintenance and repairs, such as replacing an ageing boiler, are genuine items that HMRC says you can claim for against your income for tax purposes, but you cannot claim for improvements. Though your new boiler may well be a technical improvement over the old one that breaks down, it is still a replacement and an allowable expense.

Working on or replacing boilers and heating systems should cause little disruption, so no need to start moving tenants out. In the meantime, if you need a source of heat when a boiler breaks down you should have a standby portable heater or heaters, but make absolutely sure these are serviced and safe to use in short-term emergencies. In any event you should be looking to have a broken down heating boiler up and running within two or three days at the outside and preferably sooner, to be fair to your tenants.

Insulation

You can have the latest energy efficient boiler available, but if most of the heat is being lost through an uninsulated home, then not only is it going to cost a fortune to keep the place warm, but your tenants are more likely to skimp on heating because of cost, causing condensation, black mould, health risks and long-term damage to your property.

As a responsible landlord you need to get your priorities right in these times of sky high energy prices. Properly insulating your rental homes makes economic sense, so don’t wait until you are forced to do it. It’s likely that 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.

Alternative forms of heating

Electric heating, either with electric boilers or individual heaters, was always considered to be more expensive than oil and gas, but times have changed and some modern systems can actually work out cheaper, depending on your own situation and taking the average cost over the seasons.

Modern electric heaters are highly controllable, some come with an App control on a smartphone, and they are designed to be energy efficient, meaning you can actually save more energy and cut down heating costs, especially if you can combine this form of heating with solar panels.

Gas or oil heating requires an annual service and gas needs an annual check by a Gas Safe engineer, which can be a hassle when trying to tie down tenants to appointment times, and there’s the annual cost. With electric heating you’ll never have to do this. There’s no flue pipework or the risk of carbon monoxide leaks, giving you some peace of mind.

It’s much easier to control how your home is heated with modern electric heaters and the cost of electricity has come down over the years. Separate zone heating solutions fitted with digital thermostats mean that you can control these heaters on a room-by-room basis. It’s something worth considering, so do your own research.

Heat pumps

Last year the Government introduced a scheme to encourage people to install more environmentally-friendly heating systems, with grants made available to existing homes and non-domestic buildings in England and Wales.

There are two types of heat pump, the simplest one being air-source which is slightly less effective. Ground-source is more effective but much more expensive to install.

Heat pumps only suit houses that are very well insulated, and they must have room for a large water tank, plus increased (double) radiator sizes. Underfloor heating is best. The scheme is not available for social housing or a new-build property, but private rented accommodation is eligible.

To be eligible for the scheme the property must have an EPC issued in the last 10 years, and the certificate must have no outstanding recommendations, such as installing loft or cavity wall insulation. Otherwise, you can insulate before you apply. Your private rented accommodation is eligible but the decision to install has to be taken by you, the landlord.

Under the scheme, the Government is providing £5,000 for households to install air source heat pumps which should cover 50 to 75% of the cost. £6,000 can be extended for a ground-source heat pump or even a water-source heat pump which is likely to cover between 30 to 50% of the cost of the installation. There is to be no VAT on heat pumps for five years in England, Scotland and Wales.

Proving inadequate

My view is that you need to be cautious about fitting heat pumps in rental properties. There have been many instances of installations providing inadequate heat and they need careful control. The house must be suited to the installation by being ultra well-insulated and having space for the necessary equipment.

The other important consideration is that heat pumps don’t necessarily save on heating bills. They simply transfer the cost from gas or oil onto the electricity bill because they consume a considerable amount of electricity.

See this video from ‘Skill Builder – Worcester Bosch’ which gives in my opinion an accurate expert view of some of the latest developments in heating systems, namely hydrogen boilers and heat pumps. It also gives some idea of the many problems you can encounter when you retro-fit a heat pump installation where a standard gas or oil system was used before.

Hydrogen burning boilers

Another form of heating which holds out some promise for the future is boilers using hydrogen gas. Currently, hydrogen has several drawbacks, not least that it costs as much if not more in energy to produce it as it gives back. But by using off-peak or surplus green energy, such as wind and solar, hydrogen acts like a battery, a form of energy storage. Green hydrogen is produced in this way and is transportable energy.

Blended hydrogen gas boiler trials for domestic properties, using the existing gas infrastructure, as mentioned in the video, are ongoing and could become viable in the near future.

Total Landlord’s ultimate guide to having an eco-friendly property contains lots of useful advice on what you need to do to make sure your property complies with the law, both now and in the near future, and that it’s as eco friendly as possible.

And for more information on how to provide your tenants with a safe, comfortable home, which includes a decent heating system, this winter, read Total Landlord’s ultimate guide to preparing your tenants’ boiler and heating system for winter.

Mass appropriation of rental properties for asylum seekers?

admin    Uncategorized     agents

So, what do landlords think of this latest initiative?

https://www.serco.com/uk/sites/serco-aasc/landlords

On the one-hand, the government are berating landlords for the rent levels which are linked to shortages in supply (read – failure by Govt to build)

View Full Article: Mass appropriation of rental properties for asylum seekers?

LandlordZONE probes: How the Energy Prices Bill will impact landlords

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The recently-introduced Energy Prices Bill promises to give tenants whose (usually HMO) landlords include bills in the rent a legal power to chase them for the Government’s energy bills support cash.

The Bill, introduced in Parliament on 12th October 2022, provides the legislative footing needed to ensure that people and businesses across the UK receive support with their energy bills this winter through the Energy Price Guarantee, Energy Bills Support Scheme or Energy Bill Relief Scheme (for businesses and non-domestic properties).

But what many landlords may not realise is that, for those who charge tenants – usually in HMOs – either electricity as part of their rent, or have ‘all-inclusive’ arrangements with their tenants, it is ‘expected’ that the £400 provided by the Government’s various energy bill support schemes this winter will be passed on to them.

This follows a concerted campaign by some MPs and lobbying groups on the issue in recent weeks, who have claimed that some ‘dodgy landlords’ will pocket the cash rather than pass it on – albeit supported with little evidence that this might happen.

Read more: Landlord leader: Charities are ‘scaremongering’ over £400 bills support scheme

On launching the initiative, the now-former Chancellor Kwasi Kwarteng said: “This legislation is intended to ensure support from the Energy Price Guarantee, Energy Bill Support Scheme, or Energy Bill Relief Scheme (for commercial landlords) is received by the end user in cases where intermediaries procure energy on their behalf in accordance with the terms of regulation.

“For example, the legislation will require landlords to pass benefits to tenants with further details of the requirements under this legislation to be set out shortly.”

Debt recovery

But after reading the Act, which is now law, it is evident that Ministers want to develop regulations that will give tenants for whom this does not happen the right to either complain through energy regular OFGEM or chase their landlord for the ‘debt’.

LandlordZONE has approached the relevant department (BEIS) for comment, which told us that: “The Government will introduce regulations to allow end users to recover any benefits they are due as a debt if they do not receive them by a specified period. This means that end users will be able to pursue recovery of benefits through civil proceedings.

Complicated

But the scheme, although well-intentioned, is likely to be complicated for tenants to navigate and difficult to implement.

Sean Hooker (pictured), Head of Redress at The Property Redress Scheme, says he has written to the Government and Trading Standards to clarify their understanding of how this will all work.

He says: “The problem is that as the ‘bills’ are incorporated into the rent and that therefore is a contractual arrangement. It all depends on what the tenancy agreement says.

“A lot of existing rents also would have been set before the tariffs were increased, so the tenant is probably benefitting from this. Landlords can put up rents via a Section 13 notice but determining whether their increase includes the £400 will not be straightforward.

“The only situation I can see this working is where the landlord surcharges the tenants the energy bill and even here they cannot charge more than the unit charge they are paying, which I assume should include the discount.”

View Full Article: LandlordZONE probes: How the Energy Prices Bill will impact landlords

Broken front door key in lock?

admin    Uncategorized     agents

Hi Property 118, We wondered what your thoughts are.

We have recently let a property out to a nurse who doesn’t come from the UK. She’s a bit demanding even wanting her bins emptied and didn’t realise until she was told by the letting agents that she has to put them out for emptying.

View Full Article: Broken front door key in lock?

RICS survey indicates global downturn in commercial property market

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The RICS global Commercial Real Estate Market Monitor (Q3 2022) is indicating that the sector is in the early stages of a downturn. That’s according to around 81% of the survey’s respondents in Q3 2022. It marks a significant increase from the previous quarter sample when just 11% of the survey’s respondents felt that the market would turn down.

In the latest survey, which covers domestic (UK) and foreign markets, the RICS Commercial Property Monitor gives a clear indication that both domestic and foreign investors are turning their back on commercial property.

Tenant demand is a big factor in this result in the Monitor’s numerical classification scheme showing tenant demand fell to a net balance of -10 per cent, down from +17 per cent in Quarter 2. Projections for prime office values turned even more negative, with the net balance falling to -21 per cent from +15 per cent last quarter.

Fall in the value of the pound

Capital values and rental projections have as a result taken a negative turn for the year ahead, a dramatic change from the previous quarter’s survey which was showing positive numbers. Despite the fall in the value of the GBPound, enquiries from overseas investment prospects are now in negative territory across all main commercial property sectors.

Everything is pointing to a weakening market activity. With reduced activity comes also the prospect on people’s minds of significant further interest rate rises. This is weighing heavily on the commercial market outlook over the year ahead.

Tenant demand had been recovering following Covid with five successive quarters of growth, but now, in this last quarter, most parts of the UK are seeing a downward trend for tenant demand particularly in office and retail space. Industrial space is still in demand with a positive net balance of +21%, but even here demand is down from the +61% posted in the Q4 survey last year.

Office and Retail affected most

The decline in demand for office and retail space as well as a modest decline in industrial property demand is resulting in landlords offering value added incentive packages to tempt prospective tenants.

90 per cent of the respondents to the surveys now feel that with home working and/or hybrid working bedding in, in most companies, expect businesses to start to scale back at least some of their office footprint over the next twelve months.

One-third of the survey respondents believe this reduction in demand for office space will be in the order of 5 to 10 per cent, while an equal number are predicting that trimming office footprints could be between 10 and 20%+ over the full year.

In the RICS full global version of the survey, it found that two thirds of its respondents reported observing a modest amount of repurposing of offices properties going on, with only around 10 per cent seeing a “significant” reshaping of the estate.

With major external economic forces affecting the commercial market and structural changes impacting the office sector in particular, RICS thinks prime office rents will remain broadly flat over the year ahead. This is a reversal of the position they were in in the previous quarter when an increase was predicted.

For the secondary non prime office market the outlook seems even more negative. For prime and secondary retail, the story is much the same, as twelve-month projections have slipped deeper into negative territory. In the industrial sector however, rent increases are likely to be modest in comparison to the period in the early stages of the pandemic.

Key insights from regions covered in this quarter’s report include:

“North America: A significant shift in sentiment has been noted from the results across North America, with previously strong expectations for growth across all sectors now declining due to the more challenging economic conditions and the prospect of further tightening in monetary policy. Though demand within the occupier market remains firm this quarter, 52% of survey participants from the United States and 59% from Canada now feel the market is in the downturn phase of the property cycle.

“UK: Feedback from respondents this quarter indicate a cautious tone as a weakening outlook for the broader economy weighs on the commercial market. Furthermore, as interest rates increase, -42% of respondents highlight a deterioration in credit conditions this quarter which has dampened momentum behind investor activity.

“Asia Pacific: Results from APAC remain varied at the national level. Sentiment in real estate markets across Singapore and India continues to improve, with tenant demand rebounding in recent quarters (net balances of +55% and +53% respectively in Q2) across all three main sectors. Sentiment from China, New Zealand and Hong Kong however declined from previous quarter and respondents now see the market in a downturn phase.

“Middle East and Africa: Sentiment from MEA remains positive this quarter, with both occupier and investment demand indicators strengthening slightly at a headline level. The strongest momentum is being seen in Saudi Arabia and the UAE, possibly due to higher oil prices. Respondents across MEA also foresee solid capital value growth in most sectors over the coming twelve months at an aggregate level.

“Europe: Macro economic impacts, such as intense inflationary pressures and the prospect of a significant tightening in monetary policy have resulted in a decline in sentiment from respondents across Europe this quarter. As per the findings, investor demand growth has stalled (dropping to -3% net balance from a reading of +13% previously) and capital value expectations have turned marginally negative overall. Some national markets however are showing more upbeat results, with Croatia and Greece recording positive CPSI.”

RICS Economist Tarrant Parsons, says:

“Deteriorating conditions across the UK economy are having an increasingly noticeable influence on the UK commercial property market, with higher interest rates, and the prospect of more to come, now clearly weighing on investor demand.

“The weaker survey feedback is particularly evident in the retail sector, as the cost-of-living crisis and falling consumer confidence takes its toll on household spending. Likewise, the office sector has also seen a renewed decline in demand, with ongoing structural changes to working patterns brought about by the pandemic further exacerbating the broader cyclical downturn in the economy.”

Cost of living crisis

The cost of living crisis, brought on by the war in Europe, increasing energy and food prices, and spiralling inflation, have combined to bring about interest rate hikes by the BoE, with further rises still in prospect. The net result is more caution across the commercial property market.

There was a significant deterioration in credit conditions though Quarter 2, which has had a dampening affect on investor activity. All sectors are still seeing occupier demand increasing, but this is far below the levels seen at the tail end of last year and early this year.

View Full Article: RICS survey indicates global downturn in commercial property market

A question about insurance?

admin    Uncategorized     agents

Hello. Is it usual for insurance for an empty property (which is up for sale) to only provide cover for subsidence? No cover for malicious damage or escape of water.

I’ve been quoted over £600 for one tenanted and one empty property.

View Full Article: A question about insurance?

Michael Gove urged to focus on getting rental reform ‘right’

admin    Uncategorized     agents

Landlords are calling on Michael Gove to get the planned Rental Reform Bill right for both landlords and tenants.

Mr Gove was reinstated as the Levelling Up, Housing and Communities secretary by the new Prime Minister, Rishi Sunak.

View Full Article: Michael Gove urged to focus on getting rental reform ‘right’