LATEST: 18% of tenants rank ‘pet friendly’ lets as main priority when house hunting

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Nearly one in five tenants rank permission to keep pets in their top three priorities for renting a home, new research has found.  

A report by the Social Market Foundation, sponsored by Paragon Bank – Where next for the private rented sector? – highlights how 18% of tenants particularly look for landlords who allow four-legged friends into their homes.

Despite this, government statistics show only 7% of landlords market their properties as ‘pet friendly’. 

The survey quizzed more than 1,300 renters and found that they most value aspects that enhance their experience, with outdoor space alongside permission to own pets among their top priorities. 

The most important consideration is the monthly rent cost – a top three priority for 55% of those surveyed – followed by property size, in terms of the number of bedrooms, which is prioritised by 35% of renters. 

In terms of what is important about the area where rented accommodation is located, being close enough to work was a priority for just under one in four renters (38%), followed by public transport facilities (37%) and shops (36%).

Richard Rowntree (pictured), mortgages MD for Paragon Bank, says the study shows that tenants are likely to stay in a property for the long-term and want to make it a real home, so he encouraged landlords to consider how they can facilitate that. 

Rowntree adds: “In the current economic climate, we’re likely to see further pressure on rents but it is encouraging to know that there are things that landlords can do to improve the experience of renters.

“By listening to tenants and working to meet their needs, we can help to provide houses that people will be happy to call home which benefits the renters, landlords and wider community.”  

Have your opinion on pets heard

LandlordZONE is supporting an ongoing effort by campaigning group AdvoCATS to find out landlord attitudes to pet damage to properties. Have your say here.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: 18% of tenants rank ‘pet friendly’ lets as main priority when house hunting | LandlordZONE.

View Full Article: LATEST: 18% of tenants rank ‘pet friendly’ lets as main priority when house hunting

Pandemic has exposed weaknesses in rent-to-rent, PRS annual report reveals

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The weakness inherent in the rent-to-rent model have been exposed by the rent arrears caused by the economic downturn created by the Covid lockdowns, the annual report from redress scheme the PRS has revealed.

Rent-to-rent is where a landlord permits a third party – usually a letting agency – to take over the management of their property in return for a ‘guaranteed income’.

The letting agent then makes a profit on the difference between the income paid to the landlord and the rent charged to the tenants. The properties are often operated as HMOs.

But the profits can be thin and the PRS says that last year rent-to-rent was the only sector where it saw a large increase in complaints.

Landlords have been left high and dry during Covid by failed third-party firms and agents engaged by them to operate a rent-to-rent agreement – largely because losses from rent arrears rendered these types of agreements uneconomic.

“Many of these [rent-to-rent] businesses struggled during lockdown and the increase in rent arrears that resulted during the pandemic led to a lot of problems,” says Sean Hooker, Head of Redress at the PRS (main picture).

Read a recent case we reported on about a landlord trapped in a dodgy rent-to-rent agreement.

The PRS annual report also warns landlords and letting agents that the private rented sector is ‘on the cusp of dramatic reform’ when the Government’s Renting Reform Bill proposals are unveiled in the Queen’s Speech next month.

Membership

During 2021, the PRS had a membership of 16,272 estate agents, an increase of 9% on 2020 and of whom 81% are letting agents.

Landlords may soon have to join a redress scheme too – assuming proposals to include landlord redress in the Bill come to fruition.

Complaints about agents reduced by 2.4% last year to 1,872. In lettings, the top complaints by landlords and tenants about agents were a lack of ‘duty of care’, disputed terms of business and disputes over tenancy agreements, completing inventories and deposits.

The report also includes a case study involving a disputed £9,600 ‘sourcing fee’ charged by an agent to a rent-to-rent property, a case that highlights the world of such sourcing fees but also, in this case, how the description of the property failed to reflect the true condition of the property.

Read the PRS annual report in full.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Pandemic has exposed weaknesses in rent-to-rent, PRS annual report reveals | LandlordZONE.

View Full Article: Pandemic has exposed weaknesses in rent-to-rent, PRS annual report reveals

By reducing the tax on properties landlords can reduce rents?

admin    Uncategorized     agents

Following the recent sky news and shelter report regarding section 21 and many tenants being asked to leave, surely now is the time to review the section 24 tax increase, perhaps owing to some landlords having to increase rents to cover the additional tax cost?

View Full Article: By reducing the tax on properties landlords can reduce rents?

Shelter needs to stop its campaign of scaremongering

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Responding to research published by Shelter on repossessions in the private rented sector, Ben Beadle, Chief Executive of the National Residential Landlords Association, said:

“Shelter needs to stop its campaign of scaremongering. The vast majority of landlords do not spend their time plotting ways to get rid of their tenants for no reason.

View Full Article: Shelter needs to stop its campaign of scaremongering

Shelter accused of ‘scaremongering’ as it steps up campaign to abolish Section 21 evictions

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Shelter has stepped up its campaign to ensure Section 21 evictions are abolished within the looming Renters’ Reform Bill, details of which are expected in next month’s Queen’s Speech.

The organisation has claimed that a private renter has been handed a Section 21 ‘no fault’ eviction notice every seven minutes in England since 2019 when the measure was first mooted, or some 230,000 people.

It also claims that landlords ‘kick out’ tenants using this kind of possession route ‘on a whim’.

Based on new research on Shelter’s behalf by YouGov among 1,029 tenants within the PRS, Shelter says tenants are having to move too often – 25% of respondents had lived in three homes since 2017 – pointing out that losing a private tenancy is the second most common reason why people become homeless.

The organisation wants the government to honour its pledge to deliver a Renters’ Reform Bill this year to make private renting fairer and safer for all including banning Section 21 evictions.

But Shelter’s campaign is selective in its messaging. For example, official data shows that the use of Section 21 notices has been in decline for several years, even though this kind of possession route is often the only sensible route for a landlord to take when a tenant stops paying the rent or a property needs to be sold.

And access to a relatively affordable and quick repossession process has been, since Section 21 was introduced in 1988, one of the key reasons why so many landlords have felt secure enough to spend billions of their own pounds growing the PRS.

By Shelter’s own admission, renters have few other places to turn to – Built to Rent remains in its infancy and the social and affordable rented sectors remain hopelessly under-funded.

Paul Shamplina, the founder of Landlord Action, says: “Shelter’s figures from this campaign show that 2% of the people it canvassed had been served an S21 notice, which feels about right given the period covered includes the pandemic and the eviction ban that it ushered in.

“Approximately 35% of our instructions are landlords seeking to use an S21 eviction, often because they want to leave the sector to cash-in on rising house prices or because they are disillusioned by the wave of extra taxes and regulation that has hit them in recent years.

Read more about Section 21 notices being abolished.

“There is no such thing as a ‘no fault’ eviction – landlords always have a reason to evict a tenant and a big factor is anti-social behaviour, but nevertheless it’s clear the government intends to ban them, so a workable system to enable landlords to evict badly-behaved tenants or if they want to sell their property or move back in, so the section 8 grounds need to be updated, with more mandatory grounds, with also landlords having faith in the court systems.”

‘Stop scaremongering’

“Shelter needs to stop its campaign of scaremongering. The vast majority of landlords do not spend their time plotting ways to get rid of their tenants for no reason,” says Ben Beadle, (pictured) Chief Executive of the NRLA.

“Official data shows that fewer than 10 per cent of tenants who move do so because they are asked to by their landlord or letting agent. Likewise, the number of cases coming to court as a result of Section 21 notices has been falling since 2015.

“The Government has committed to abolishing Section 21 possessions, but this has got to be replaced by a system that is both fair and workable for both tenants and landlords. Simply getting rid of Section 21 on its own would, for example, make it all but impossible to take action against anti-social tenants who blight the lives of neighbours and fellow tenants.

“The NRLA has published its detailed plans for a new system that strikes the right balance. We urge Shelter to work constructively with us on these.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Shelter accused of ‘scaremongering’ as it steps up campaign to abolish Section 21 evictions | LandlordZONE.

View Full Article: Shelter accused of ‘scaremongering’ as it steps up campaign to abolish Section 21 evictions

Shelter accused of ‘scaremongering’ as it pushes to end Section 21 evictions

admin    Uncategorized     agents

Shelter has stepped up its campaign to ensure Section 21 evictions are abolished within the looming Renters’ Reform Bill, details of which are expected in next month’s Queen’s Speech.

The organisation has claimed that a private renter has been handed a Section 21 ‘no fault’ eviction notice every seven minutes in England since 2019 when the measure was first mooted, or some 230,000 people.

It also claims that landlords ‘kick out’ tenants using this kind of possession route ‘on a whim’.

Based on new research on Shelter’s behalf by YouGov among 1,029 tenants within the PRS, Shelter says tenants are having to move too often – 25% of respondents had lived in three homes since 2017 – pointing out that losing a private tenancy is the second most common reason why people become homeless.

The organisation wants the government to honour its pledge to deliver a Renters’ Reform Bill this year to make private renting fairer and safer for all including banning Section 21 evictions.

But Shelter’s campaign is selective in its messaging. For example, official data shows that the use of Section 21 notices has been in decline for several years, even though this kind of possession route is often the only sensible route for a landlord to take when a tenant stops paying the rent or a property needs to be sold.

And access to a relatively affordable and quick repossession process has been, since Section 21 was introduced in 1988, one of the key reasons why so many landlords have felt secure enough to spend billions of their own pounds growing the PRS.

By Shelter’s own admission, renters have few other places to turn to – Built to Rent remains in its infancy and the social and affordable rented sectors remain hopelessly under-funded.

Paul Shamplina, the founder of Landlord Action, says: “Shelter’s figures from this campaign show that 2% of the people it canvassed had been served an S21 notice, which feels about right given the period covered includes the pandemic and the eviction ban that it ushered in.

“Approximately 35% of our instructions are landlords seeking to use an S21 eviction, often because they want to leave the sector to cash-in on rising house prices or because they are disillusioned by the wave of extra taxes and regulation that has hit them in recent years.

Read more about Section 21 notices being abolished.

“There is no such thing as a ‘no fault’ eviction – landlords always have a reason to evict a tenant and a big factor is anti-social behaviour, but nevertheless it’s clear the government intends to ban them, so a workable system to enable landlords to evict badly-behaved tenants or if they want to sell their property or move back in, so the section 8 grounds need to be updated, with more mandatory grounds, with also landlords having faith in the court systems.”

‘Stop scaremongering’

“Shelter needs to stop its campaign of scaremongering. The vast majority of landlords do not spend their time plotting ways to get rid of their tenants for no reason,” says Ben Beadle, (pictured) Chief Executive of the NRLA.

“Official data shows that fewer than 10 per cent of tenants who move do so because they are asked to by their landlord or letting agent. Likewise, the number of cases coming to court as a result of Section 21 notices has been falling since 2015.

“The Government has committed to abolishing Section 21 possessions, but this has got to be replaced by a system that is both fair and workable for both tenants and landlords. Simply getting rid of Section 21 on its own would, for example, make it all but impossible to take action against anti-social tenants who blight the lives of neighbours and fellow tenants.

“The NRLA has published its detailed plans for a new system that strikes the right balance. We urge Shelter to work constructively with us on these.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Shelter accused of ‘scaremongering’ as it pushes to end Section 21 evictions | LandlordZONE.

View Full Article: Shelter accused of ‘scaremongering’ as it pushes to end Section 21 evictions

Commercial property investment trusts outperform, as optimism returns

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The AEW UK REIT fund, (AEWU) currently priced at 132p per share and capitalised at £206mn, has had a stellar run since the depths of the Covid pandemic.

The rock-solid performance the trust has achieved has topped the UK diversified commercial property investment trust market over the past one, three and five years, with stock analysts now pushing through more upgrades.

The Investors’ Chronicle writer Simon Thompson reports a net asset value (NAV) total return of 7.37 per cent for the three-month period to 31 March 2022. He says the 4.74 per cent like-for-like valuation increase is driven by investments in the office and industrial sectors, with a very healthy and robust outlook with its total portfolio’s estimated rental value (ERV) forecast to be 20 per cent higher than its current gross income.

The company’s 7.37 per cent quarterly NAV return is driven by a £10.7mn valuation uplift across its £240mn investment portfolio. Half of this comes from its industrial property (representing 50 per cent of the portfolio weighting), and around one-quarter comes from offices (18 per cent weighting).

Steady improvement post the pandemic

New research from Cluttons Investment Management shows that total commercial property returns have remained in line with the MSCI Monthly Index of almost 20% in 2021, up from 13.4% in 2020 and above the industry predictions which varied between 10-14%.

Investment volumes in 2021 rose 9% and reached 10% above the long-term average. Q4 returns alone rose from 4.6% to 7.9%. This represents the strongest quarterly performance since Q4 2009 when the industry started to bounce back following the Great Financial Crisis (GFC).

Cluttons says that Q4 commercial property performance was boosted by London’s West End and Midtown offices, as well as industrials and retail warehouses, in a sign that the Omicron virus and Plan B restrictions, including the latest ‘working from home guidance’, have had little impact on confidence in central offices as an asset class.

Jamie McCombe, head of Cluttons IM, has said:

“Despite the ongoing pandemic, inflationary pressures and Brexit, 2021 saw a solid performance in commercial real estate with investment volumes up, returns well up on expectations and yields hardening.

“Property funds are open again, assets under management have risen and while lending remains muted, transactions are increasing. On the rental side, June 2021 saw the bottom of the cycle for all property rental values and we expect recovery to pre-pandemic levels by Q2 2022 while capital values have already recovered and will continue to rise in the foreseeable future.

“We think this year will see further inflationary pressures with perhaps four rises in the Bank Rate of 0.25%, ending the year on 1.25%. For property returns themselves, we expect another strong year with over 10% returns for all property.”

Industrial warehousing leads the charge

The familiar themes of expansion in industrial warehousing markets and demand within the retail warehousing sector have delivered 4.65 per cent and 3.95 per cent quarterly valuation uplifts, respectively. AEW’s NAV per share is now more than 20 per cent higher than it was 12 months ago and the board has agreed an 8p per share dividend payout at the interim.

AEW recently agreed the sale of Eastpoint Business Park at 90 per cent premium to carrying value, while rental growth remains a key driver for its positive re-valuations. One example is AEW’s industrial site in Basildon, The Apollo Business Park, which has been revalued upwards by 22.5 per cent. This was during the last quarter following the signing of a new five-year lease at a rent 15 per cent ahead of the valuer’s previously estimated levels.

In Bradford, the open market rent review of an industrial asset occupied by Pilkington UK led to a 14 per cent increase in income (over a three-year period) and an 11.7 per cent uplift in capital value, while in Rotherham, terms were finalised with a new tenant to take the 80,000 square foot (sq ft) space vacated by Hydro Components last December. Once the 10-year lease has been completed later this year, rental income is set to significantly exceed previous passing levels of £3.35 per sq ft, underpinning a 20 per cent valuation uplift on that one asset.

Office revival

There’s a similar story with the firm’s office portfolio. In Oxford, Eastpoint Business Park has successfully signing up tenants from the City’s burgeoning life sciences sector, the higher rent roll supporting a 20 per cent capital rise in the property’s value. In Glasgow, a former office building in Bath Street has been awarded planning consent for conversion to student accommodation, pushing up its valuation by 13 per cent.

Given that the investment trust’s overall estimated rental value is 20 per cent higher than the company’s passing rent roll, then further material rental uplifts should be expected as assets come up for rent review or are re-marketed after refurbishment.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Commercial property investment trusts outperform, as optimism returns | LandlordZONE.

View Full Article: Commercial property investment trusts outperform, as optimism returns

DPS reports rent increases for the sixth consecutive quarter

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Average UK rents have increased for the sixth consecutive quarter, according to The Deposit Protection Service (The DPS), whilst also producing evidence that some tenants are paying above the going rate to secure a property. Average rents now stand at £849 a month: a £15 (1.80%) increase on £834 in Q4 2021

View Full Article: DPS reports rent increases for the sixth consecutive quarter

Looming Welsh rental reform laws slammed for ‘huge holes’ despite being only months away

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Welsh landlords face uncertainty around their ability to evict tenants after their government again failed to approve vital regulations to clarify its imminent Renting Homes (Wales) Act.

The Senedd’s Legislation, Justice and Constitution Committee has previously criticised gaps in the legislation – which takes effect on 15^th July – but this week failed to alleviate landlords’ concerns.

“There are still obvious regulations missing from the Act which comes into force in less than three months,” says David Smith (pictured), of solicitor JMW.

“Most obviously there is nothing that will allow Section 8 and Section 21 notices issued now to carry over beyond 15th July, despite the Welsh government saying on their FAQ pages that they will carry over.”

The government underestimates the work required for such a radical change in legislation, Smith tells LandlordZONE.

“There are areas that are really important we don’t know about and this still has to progress through the courts. I’m worried that if it’s rushed, there will be confusion and errors and might mean a landlord who should get possession, won’t, because the judge doesn’t understand the law.”

This doesn’t just impact landlords with one or two properties, he says, but social landlords and student landlords with hundreds of tenancies.

Smith adds: “In an Act, there is normally a section of ‘schedule of repeals and consequential amendments’ – but until we get that we can’t be sure about how it meshes with everything else. There will also be legacy stuff that hasn’t been repealed.”

Minister for Climate Change Julie James (pictured) told the committee: “We are keen to learn lessons and continue to keep the legislative programme under review. In the meantime, I can assure the committee that the priority is to continue to fully implement the remaining aspects of the Act.”

Smith hopes the next committee meeting scheduled for early May will provide more clarification.

Read more about the legislation.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Looming Welsh rental reform laws slammed for ‘huge holes’ despite being only months away | LandlordZONE.

View Full Article: Looming Welsh rental reform laws slammed for ‘huge holes’ despite being only months away

Welsh rental reform laws slammed for ‘huge holes’ despite being only 12 weeks away

admin    Uncategorized     agents

Welsh landlords face uncertainty around their ability to evict tenants after their government again failed to approve vital regulations to clarify its imminent Renting Homes (Wales) Act.

The Senedd’s Legislation, Justice and Constitution Committee has previously criticised gaps in the legislation – which takes effect on 15^th July – but this week failed to alleviate landlords’ concerns.

“There are still obvious regulations missing from the Act which comes into force in less than three months,” says David Smith (pictured), of solicitor JMW.

“Most obviously there is nothing that will allow Section 8 and Section 21 notices issued now to carry over beyond 15th July, despite the Welsh government saying on their FAQ pages that they will carry over.”

The government underestimates the work required for such a radical change in legislation, Smith tells LandlordZONE.

“There are areas that are really important we don’t know about and this still has to progress through the courts. I’m worried that if it’s rushed, there will be confusion and errors and might mean a landlord who should get possession, won’t, because the judge doesn’t understand the law.”

This doesn’t just impact landlords with one or two properties, he says, but social landlords and student landlords with hundreds of tenancies.

Smith adds: “In an Act, there is normally a section of ‘schedule of repeals and consequential amendments’ – but until we get that we can’t be sure about how it meshes with everything else. There will also be legacy stuff that hasn’t been repealed.”

Minister for Climate Change Julie James (pictured) told the committee: “We are keen to learn lessons and continue to keep the legislative programme under review. In the meantime, I can assure the committee that the priority is to continue to fully implement the remaining aspects of the Act.”

Smith hopes the next committee meeting scheduled for early May will provide more clarification.

Read more about the legislation.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Welsh rental reform laws slammed for ‘huge holes’ despite being only 12 weeks away | LandlordZONE.

View Full Article: Welsh rental reform laws slammed for ‘huge holes’ despite being only 12 weeks away