Extra layer of Management with RTM?

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We have just been successful with our Right to Manage ‘bid’ and the handover is in June. What is concerning a number of us is that our current management company is managed by and answers to a property management company

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Generation Rent aims to stop landlords using Section 13 notices to raise rents ‘unfairly’

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Tenant advocacy group Generation Rent has set its sights on preventing landlords from raising rents via Section 13 notices by reforming the Fair Rent tribunal system that underpins them.

The group, which is headed up by Baroness Kennedy and has considerable clout in Whitehall and local authority corridors of power, says its research suggests the whole Fair Rent review system is tipped too much in the favour of landlords.

Research chief Dan Wilson Craw (pictured) says he expects more landlords to turn to Section 13 notices to raise rents once it becomes more difficult to evict tenants when ‘no fault’ Section 21 notices are eventually abolished by the government within its much-anticipated Spring rent reform White Paper.

“If landlords can no longer use the threat of a Section 21 eviction to force tenants to pay a higher rent, we might expect more landlords to use Section 13 notices,” he says.

“This may result in more cases where the tenant has to move because they cannot afford a higher rent – cases that could be thought of as ‘economic evictions’. The Rent Tribunal will in turn become more important.”

With an assured shorthold tenants (AST) tenants can challenge a rent rise if it is ‘significantly higher’ than similar ASTs in the area.

Tribunal decisions

Generation Rent looked at 341 Fair Rent tribunal cases between January 2019 and August 2021 and found that tenants who challenge a rent increase at the Rent Tribunal come away with an average increase of 5.5% per year – much higher than rent inflation in the country, and much higher than most people see their wages increase by.

“This is because the Rent Tribunal bases its decisions on what similar properties to your home are being listed for on the market,” says Craw.

“Without an overhaul of the Rent Tribunal, renters will continue to face unaffordable rent increases and economic evictions after the abolition of Section 21 evictions.

“This is why we argue that alongside efforts to restrict Section 13 notices, improve awareness of the Tribunal and widen accessibility for renters, capping rent increases in tenancies at wage inflation is needed to protect renters from unaffordable rent rises.”

Read the Generation Rent blog in full.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Generation Rent aims to stop landlords using Section 13 notices to raise rents ‘unfairly’ | LandlordZONE.

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LATEST: EPC firm launches first-of-kind Band C upgrade consultancy service for landlords

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A company based in Wales has launched a first-of-a-kind service that helps landlords work out how to most cost-effectively raise a property’s performance to EPC Band C.

Vibrant says its EPC Plus service is offered alongside the mandatory EPC that every rental property must undergo every ten years.

Each bespoke report produced by Vibrant as part of the EPC Plus service details the current and potential EPC rating, how it compares with the average for the area, the CO2 produced by the property each year and the CO2 savings that could be achieved.

The report itself has been designed to be simple to understand, with clear and concise advice on what upgrades and improvements are recommended, as well as information on multiple sources of funding that may be available.

Services like are ‘nice to have’ but the government’s proposals to force all landlords to bring their properties up to a Band C by 2025 for new tenancies and the remainder by 2028 will make it a pressing and expensive issue for millions of landlords very soon.

These proposals as they currently stand will impact an estimated 3.2 million landlords whose properties have an EPC rating of D or below.

“The increased attention on improving the performance of the UK housing stock means that in the coming years landlords will be under greater pressure to make improvements that will bring down energy usage,” says Daniel Kittow, MD of Vibrant.

“Our EPC Plus Service will provide them with a complete overview of the current performance alongside clear and targeted recommendations, allowing proactive improvement and management of each property.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: EPC firm launches first-of-kind Band C upgrade consultancy service for landlords | LandlordZONE.

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Coventry landlord first to be fined under new electrical safety compliance legislation

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A landlord in Coventry has become the first in England to be fined under the recently-introduced Electrical Safety Standards legislation.

Since July 1^st 2021 all residential landlords in England must ensure that the electrical installations in the property are safe and are inspected and tested at least every five years.

The inspection must be carried out by a “competent person” and an Electrical Safety Certificate issued, a copy of which must be made available to the appropriate authorities if required, and copy given to the tenants within 28 days of being completed.

Should the local authority request a copy of the report it must be provided within seven days.

£1,600 fine

Coventry City Council, which has chosen to save the landlord’s blushes by not naming him, has nevertheless fined him £1,600. After being given seven days to provide a certificate within this statutory time limit, he subsequently failed to provide it.

This was for a property on Stoney Stanton Road near the centre of Coventry (pictured).

The Council will now also be serving a remedial notice requiring further action to be taken.The EICR report should have been completed on or around the 1st April 2020 by a competent and suitably qualified electrician to show that the electrical installation in the property was safe and a copy provided to the tenant.

Adrian Chowns (pictured), Property Licensing and Housing Enforcement Manager for, Coventry City Council says: “We believe this is the first time these powers have been used by a Local Authority in England.

“It highlights how Coventry City Council are taking a proactive approach to enforcement and clamping down on rogue landlords in its city.”

Read more about electrical safety compliance.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Coventry landlord first to be fined under new electrical safety compliance legislation | LandlordZONE.

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ACORN holds demonstrations in six cities calling for ‘cheap rent’ and more PRS regulation

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Renters Unions around the UK held demonstrations over the weekend during which campaigners called for ‘cheap rent’ and also urged the government to implement its rent reform proposals fully.

Members of tenants union Acorn gathered in Brighton, Leeds, London, Newcastle, Sheffield and Walsall, sharing their experiences of private renting and putting their demands to MPs with key ministerial and governmental housing positions.

The group managed to win approval from one politician over the weekend – Lloyd Russell-Moyle, who is a member of the All Party Parliamentary Group looking into reform of the rental market.

He is the Labour MP for Brighton Kemptown and an energetic housing activist in parliament.

Change needed

An Acorn speaker told those attending the Brighton event that: “Successive governments have failed to reform the private rented sector and give England’s 11 million private renters a decent place to call home — this needs to change.”

Acorn’s activities over the weekend are designed to put pressure on the government not to backtrack over its Rent Reform Bill proposals, which are expected imminently.

As well as abolishing Section 21 evictions and reforming Section 8 notices, the government’s plans include a national landlord register, mandatory redress for landlords and their tenants and a lifetime rental deposit system.

Eviction ignorance

Some of the demonstrators at the events seemed to be unaware of English law governing the PRS – one man told The Morning Star newspaper that renters were fed up living under the threat of being evicted at ‘a moment’s notice’.

As many LandlordZONE readers will be aware to their cost, Shelter estimates that the most commonly-used eviction process, a Section 21, can take between seven and eight months to complete from serving notice to the bailiffs enforcing a court decision.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – ACORN holds demonstrations in six cities calling for ‘cheap rent’ and more PRS regulation | LandlordZONE.

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Inflation spike drives investors to seek ‘safe haven’ in private rented sector

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Rising inflation is pushing more landlords and investors into high-yield buy-to-let property markets as they seek safe havens for their cash, estate agency Hamptons has reported.

Consequently, the North East which offers investors average gross yields of 9% has seen the proportion of properties bought by landlords in the region jump from 20% to 27% over the past 12 months.

Similar dramatic increases in landlord buying activity has also been seen in the East Midlands, East of England and Wales.

In Middlesborough, a staggering 58% of homes for sale were bought by landlords, including an increasing number from London.

And overall investors bought 14% of all homes sold across the nation during the first three months of 2022, the highest proportion recorded since 2016 when landlords rushed to complete before the new 3% stamp duty charge kicked in.

Hamptons say this investment surge means some of the 300,000 properties lost from the private rented sector since 2017 as landlords, faced with extra costs and red tape have exited the market, are being recouped.

Buying doubles

Overall, investors bought 42,980 homes across Great Britain during the first three months of this year, equating to £8.5bn worth of property – nearly twice the figure recorded pre-Covid during the same period.

Coupled to a slowdown in landlords selling their properties, this means the private rented sector is set to grow again, and there was a net gain of 13,480 rental properties in Great Britain between January and March this year compared to a 7,640 net loss during the same period last year.

“Tax and regulatory changes have weighed heavily on the buy-to-let sector over the last five years causing more landlords to sell up at a time when fewer new entrants were looking to buy,” says Aneisha Beveridge, Head of Research at Hamptons (pictured).

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Inflation spike drives investors to seek ‘safe haven’ in private rented sector | LandlordZONE.

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Treasury to recognise Stablecoins and develop Cryptoasset strategy

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The Treasury has announced moves to recognise ‘Stablecoins’ as a valid form of payment and part of wider plans to make Britain a global hub for Cryptoasset technology and investment.

This is part of a package of measures to ensure the UK financial services sector remains at the cutting edge of technology and includes:

• introducing a ‘financial market infrastructure sandbox’ to enable firms to experiment and innovate

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REGULATION: Wales reveals 29 reasons why a property can be ‘unfit’ after July 15th

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Landlords in Wales have been given detailed new guidance to make sure their properties are up to scratch ahead of the new Renting Homes (Wales) Act.

From 15^th July, they will need to ensure homes are fit for human habitation at the start of, and during, the occupation contract, and the new guidance aims to help them understand their responsibilities.

The Act provides 29 examples of ‘matters and circumstances’ where action might be needed to prevent contract-holders (tenants) from potentially living in unfit conditions.

These include damp, mould growth and exposure to the cold, but are so extensive they even cover explosions and the threat from debris created by a blast and the resulting partial or total collapse of a building.

Landlords are advised to, “conduct visual and/or physical inspections to minimise the likelihood wherever possible”.

At the other end of the risk scale, they are warned to conduct visual and physical inspections to minimise the likelihood of “collision or entrapment” occurring in doors or windows.

Smoke alarms

The guidance also sets out landlord requirements which must be complied with, namely ensuring that their properties have both smoke alarms and carbon monoxide detectors in proper working order and ensuring the inspection and testing of the electrical installation.

Read more about England's legislation on Fitness for Human Habitation.

The guidance states: “It is important to understand that where a landlord fails to comply with these requirements, the dwelling is to be treated as if it were unfit for human habitation.”

The requirements relating to installing smoke alarms and electrical safety testing will not apply to existing tenancies that switch to an occupation contract until 15th July 2023, however, from 15th July 2022 all new contracts will need to comply with them. Carbon monoxide detectors must be installed in all relevant properties from 15th July 2022.

Details can be found on the Welsh Government website.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – REGULATION: Wales reveals 29 reasons why a property can be ‘unfit’ after July 15th | LandlordZONE.

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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.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Is hybrid working the future and what are the implications for property? | LandlordZONE.

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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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