Mandatory five-year electrical checks are required

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There are heavy fines for those landlords who fail to have their rental properties tested by a qualified electrician before letting, and for existing tenancies, or if they fail to comply with any of the important recommendations made in a test report. The landlord will ordinarily have 28 days to make good any reported defects or needed improvements, unless the issue is dangerous, in which case it may be recommended the remedy is made sooner.

This article is
based on English law and is not a definitive statement or
interpretation of the law; rules change and every case is different –
ultimately only a court can decide. Other jurisdictions are similar
but there are important differences. Always seek expert advice before
making or not making decisions.

Local authorities have the power to issue a fine of up to £30,000 and where necessary may carry out any recommended remedial work itself and charge the landlord for this work.

The electrical safety regulations bring electrical testing in-line with the gas safety check regime in England and Wales and the electrical regulations already operative in licensed Houses in Multiple Occupation (HMOs), as well as the electrical testing regulations in operation in Scotland.

Not all tenancies are affected by the regulations, excluded ones include:

• social
  landlords
• resident
  landlords, where the tenant lives in the same building.
• Landlords with
  lodgers
• long leaseholds
  and tenancies in excess of seven years or more.

• student
  lettings in halls, hostels, refugee care homes, hospitals or
  hospices.

Included in the checks are all electrical wiring and all fixed electrical installations. The checks must be carried out by a competent person, usually a qualified electrician, who will produce an Electrical Installation Condition Report (EICR)a report which must be shown to tenants on entry to the property, or in the case of existing tenants, up to 28 days following the 5-yearly checks.

What the regulations require

Landlords of privately rented accommodation must:

• Ensure national standards for electrical safety are met. These are set out in the 18th edition of the ‘Wiring Regulations’, which are published as British Standard 7671.
• Ensure the electrical installations in their rented properties are inspected and tested by a qualified and competent person at an interval of at least every 5 years.
• Obtain a report from the person conducting the inspection and test which gives the results and sets a date for the next inspection and test.
• Supply a copy of this report to the existing tenant within 28 days of the inspection and test.
• Supply a copy of this report to a new tenant before they occupy the premises.
• Supply a copy of this report to any prospective tenant within 28 days of receiving a request for the report.
• Supply the local authority with a copy of this report within 7 days of receiving a request for a copy.
• Retain a copy of the report to give to the inspector and tester who will undertake the next inspection and test.
• Where the report shows that remedial or further investigative work is necessary, complete this work within 28 days or any shorter period if specified as necessary in the report.
• Supply written confirmation of the completion of the remedial works from the electrician to the tenant and the local authority within 28 days of completion of the works.

New checks and a new report will need to be produced on or before the fifth anniversary of the previous checks, unless the landlord makes changes to the electrical wiring or installations in the rental, in which case earlier checks will be needed.

As with gas safety checks, landlords will need to produce and supply to tenants the correct documents, including the electrician’s report prior to any lettings, otherwise they may be unable to peruse a possession claim if the need arises and the landlord’s insurance may be invalid. Similarly, agents will refuse to let properties lacking the correct documentation.

Landlords need to plan ahead to balance their cash flows in case remedial action is needed to bring electrical systems up to current standards, with the potential cost involved.

Most landlords will appreciate the importance of having their wiring and installations, just as their gas systems, safe and free from defects. Most will be brought up to modern safety standards relatively inexpensively.

These new regulations replace the previously existing regulations for houses in multiple occupation (HMO) to have the electrical installations tested.

Should tenants refuse landlords access for inspections and any required remedial work, as with gas checks, the landlord could be considered to have breached this duty, even where the landlord has tried repeatedly to have the work done. It is important therefore to keep the local authority informed if this is the case, preferably in writing.

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Council makes extraordinary request asking landlords to pay for student mess

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Durham city’s parish council has taken the unusual step of asking student landlords to make a voluntary donation towards the cost of cleaning up street waste and discarded furniture.

It will ask for a contribution of £52 towards its precept from student landlords to match the amount paid by ratepayers.

More than 4,340 properties are registered as student properties in the city and therefore exempt from paying council tax; the authority reports that these exemptions cost it £8.7 million in lost council tax revenue.

The move comes after mounds of discarded waste and furniture were dumped in the streets when students left their homes last year.

Chairman, councillor Alan Doig, says: “This parish council has the responsibility of helping to maintain our beautiful parish on behalf of every resident, student and non-student alike.

“This is why we are asking all student landlords to share with us a shared commitment to maintain the attractiveness of our environment by making a contribution to our precept, so helping us deliver these vital projects for our community.”#

Landlord support

The plans are also supported by student landlord and fellow parish councillor, Helen Weston (pictured), who adds: “As a fellow student property owner myself, I fully endorse the work of the parish council to safeguard the residents of this city and to ensure that the city is kept clean and enjoyable for all.”

The money raised will be invested in projects such as paying for more neighbourhood wardens, according to The Chronicle.

The council will write to all landlords later this month with the request and will publish the contributions made to highlight good landlords.

View Full Article: Council makes extraordinary request asking landlords to pay for student mess

More landlords moving to limited companies as list tops 60,000

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The number of VAT and/or PAYE enterprises operating in the UK’s residential and commercial rental sectors climbed 2% in the past year, despite the government’s best efforts to deter investment.

Analysis of government data by debt advisory firm Sirius Property Finance reveals that there are now 60,000 businesses in the sector, representing five-year growth of 12%.

London continues to be the rental investment capital with 12,160 rental businesses, accounting for one fifth of the UK total, while the South East (13%) and North West (10%) are also among the most prominent regional markets.

Sirius reports that the North East is home to the lowest proportion of buy-to-let enterprises, accounting for just 2%. In the past 12 months, Wales has seen the biggest increase in businesses (3%), while the North West leads the way in terms of five-year growth at 15%. 

Tax and CGT

Head of corporate partnerships, Kimberley Gates, says the UK’s buy-to-let sector continues to grow despite recent changes to capital gains and tax allowance rules. 

She explains that although demand for rental homes remains profitable, many landlords have decided to set up their own businesses in order to further improve profitability, which is driving the increasing number of companies operating in the sector.

“It would be bold to predict anything other than continued growth in the buy-to-let ecosystem over the coming months and years,” adds Gates, “especially in densely populated urban areas, because as long as home ownership continues to be so incredibly expensive, rental demand will always be strong.”

View Full Article: More landlords moving to limited companies as list tops 60,000

Revealed: The most appealing cities for young renters

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The most appealing cities for young renters to enjoy jobs, socialising and low rents have been revealed – and there are some unlikely destinations in the top 10.

The research from Comparethemarket found that Nottingham, Southampton and Coventry are the UK’s most appealing cities for young adults.

View Full Article: Revealed: The most appealing cities for young renters

Council tries AGAIN to start UK’s most controversial licencing scheme

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Luton Council is making yet another attempt to bring in two new licensing schemes after a string of false starts amid landlord opposition.

Its overview and scrutiny board has agreed to recommend a town-wide additional scheme as well as a selective scheme in South ward, which now need executive approval and could be up and running by July.

The authority tried to introduce a scheme in 2018 after its previous additional licensing scheme ended, but faced significant local opposition and went silent about its plans until December 2019.

But campaign group Luton Landlords and Letting Agents Ltd – made up of agents, landlords and concerned residents – launched a legal challenge, forcing the council to admit errors and the scheme was put on hold. It last announced new plans in January 2022, but they failed to materialise.

Service director housing Colin Moone told the board meeting there were 4,500 HMOs in the town, with more than 3,800 falling outside of the mandatory licensing scheme, reports Luton Today.

Legal challenge

Although he said it had got everything right, there was likely to be another legal challenge.

“There are landlords vehemently against licensing who believe we’ve got powers currently and don’t need this scheme,” he explained. “This is the third attempt in the last three years. A core set of landlords definitely aren’t supportive.”

Moone (pictured) told councillors that fees of £488 would remain the same because it did not want to put more pressure on private tenants. He also assured them that the council had sufficient resources to enforce take-up of the schemes.

He added: “If we have to do a blitz one day or one evening around HMOs, we’ll consider how. If not enough landlords register, we’ll need to decide how we go about getting those HMOs.”

View Full Article: Council tries AGAIN to start UK’s most controversial licencing scheme

Renting Done Right manifesto is officially launched

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A manifesto calling on the government to rapidly step up its support for the lettings sector has officially been launched.

It’s the brainchild of rentech firm Goodlord and is called Renting Done Right.

The firm says the manifesto has been created after discussions with focus groups and roundtables involving more than 1,500 agents

View Full Article: Renting Done Right manifesto is officially launched

Slide in house prices is accelerating

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The UK’s house prices fell for the third consecutive month as prices slumped 0.3% between January and February, the Office for National Statistics (ONS) says.

Its data also reveals that average house prices grew 5.5% in the year to February – that’s down from January’s figure of 6.5%.

View Full Article: Slide in house prices is accelerating

BREAKING: ‘Reinstate mortgage interest tax relief for landlords’, report urges Ministers

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Landlords and letting agents have told a new poll that the Government must reverse its Section 24 mortgage interest relief tax changes as a priority to get the private rental sector ‘back on track’.

Rent tech platform Goodlord conducted the research among some 1,500 agents, landlords and tenants and has today published it within its report Renting Done Right.

The report calls for more industry support from Government, a simpler approach to compliance, more clarity on regulation and when it’s being introduced and to reward effective landlords with tax incentives.

Some three quarters of landlords said financial incentives should be the Government’s top priority to keep landlords in the sector, although HMRC recently defended its ‘levelling-up’ tax relief changes.

As regulatory requirements build across the sector, landlords – especially those with only one or two properties – are seeking additional support, the report says.

Nearly two thirds of letting agents surveyed said they are seeing more landlords turning to them for support with compliance.

Thorny issue

But the thorny issue of ‘overbidding’ on properties is also raised by the report, in which 83% of tenants said there should be a cap on how much homes can be bid for above the listed price, something half of the agents canvassed agreed with.

Tenants also reckoned rent controls were a ‘good idea’ but 40% of landlords and agents said it would be damaging not helpful to the sector.

The manifesto is being officially unveiled at an industry event in London this evening.

The findings will then be shared with decision makers at the Department for Levelling Up, Housing and Communities.

William Reeve, CEO at Goodlord, says: “This manifesto is the result of months of work and in-depth discussions from across the letting industry.

“We hope this manifesto helps unlock conversations that help make renting better. The time to act is now.”

Read the full manifesto here. 

View Full Article: BREAKING: ‘Reinstate mortgage interest tax relief for landlords’, report urges Ministers

Artificial Intelligence and the landlord’s lot…

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Talk of AI is all the rage right now, but have you thought about how you could use this revolutionary new development?

ChatGPT is what is known as a “natural language processing tool” driven by artificial intelligence (AI) technology that allows human-like conversations. This “large language model” can answer questions and assist with tasks, such as composing emails, writing contracts or business plans, even music and computer code.

The Google search engine’s power is its ability to do enormous database lookups and provide a series of matches. Open AI ChatGPT’s (the acronym for Generative Pre-trained Transformer) power on the other hand is its ability to parse queries and produce answers and results based on most of the world’s digitally-accessible text-based information – at least the information that existed at the time of its pre-training.

The next stage is to incorporate the technology into a Microsoft Bing or Google Bart search engines which is happening now.

Despite warnings of where this GTP technology might be leading us, it has some obviously immense capabilities and the power to assist humans, including landlords and letting agents, in performing many mundane tasks at great speed. It also has the power to do away with many of the jobs that exist today.

Some examples

This is an example of  Google “Bart’s”, its own version of AI, when asked to describe the landlord’s lot in the form of a Shakespearean sonnet.

This is what it gave within 20 about seconds:

The landlord’s lot is a hard one indeed,
To keep the roof from leaking and the walls from falling down.
To pay the bills and keep the tenants happy,
And to make a profit, if they’re lucky.

The landlord is always at the mercy of the market,
Of the economy and the whims of the tenants.
They are the first to be blamed when things go wrong,
And the last to be praised when things go right.

But despite all the challenges,
The landlord’s lot is not without its rewards.
There is the satisfaction of providing a home for others,
And the knowledge that they are making a difference in the world.

So if you are considering becoming a landlord,
Be prepared for a challenge.
But also be prepared for the rewards,
Of making a difference in the world.

The landlord’s lot is a hard one,
But it is also a noble one.
They are the ones who provide us with a place to call home,
And they deserve our respect.

Wow, not rhyming but pretty good, insightful and accurate.

Some warnings

Some key figures in the technology world including Elon Musk are calling for a halt in the development of artificial intelligence, they want training of powerful AI systems to be suspended amid fears of a threat to humanity. They have signed an open letter warning of potential risks, and say the race to develop AI systems is out of control.

But AI is with us already, it’s in our phones and you interact with it whenever you call your bank. It’s just that these latest developments and the competition among the tech giants to develop the Chatbot Generative Pre-trained Transformers has taken a great leap forward.

It doesn’t take a great deal of imagination to see how these powerful adaptations of this technology can enter almost every aspect of our lives and in our businesses, taking many tedious tasks out of our hands, but at the same time threatening many jobs and livelihoods.

The speed of these developments seems amazing to those of us just becoming aware of it, though in reality it’s probably taken years to get to this stage. You can see that if this technology can be harnessed for the good then its potential is enormous, but for those who warn of its dangers perhaps know far more than us.

It would seem though, that if something like this has been invented (or discovered), rather like nuclear weapons, you can’t uninvent it. Humanity must find a way to control it because the tech minds’ intense curiosity will inevitably continue to develop it, and its potential economic benefits to the tech giants and businesses generally will almost certainly ensure the race continues.

At its present stage of development, we are told, it is not perfect, whether writing a computer program, a legal contract or a job application. Its reliability is still suspect, human minds will still be needed. But from what we can already see of its capabilities, it won’t be all that long before it achieves greater accuracy and reliability.

Applications

An AI assistant working along with people will speed up everyday tasks, tasks that landlords, agents, legal professionals and accounts need to perform. Writing a business plan, a mortgage application, a tenancy agreement, as well completing an annual budget or tax return. These will be completed in seconds. They will undoubtedly need tweaking by a knowledgeable person, but this will be far quicker than starting from scratch,

Want a report on the local property market, market trends and pricing, buyer and seller behaviour, your tenants’ needs? In future your AI powered assistant will likely produce these reports in seconds, reducing the time to complete complex tasks to a fraction of the time it takes now.

This technology will help you search the internet for the best property deals, write out property listings for your agency, create social media posts, draft responses to letters and tenant emails, and instantly calculate and print out reports on mortgage repayment for you.

AI won’t have a problem writing scripts for your YouTube videos, or answering complex legal  communications with your tenants. 

The technology is not perfect now, but it’s made a great start. You can easily see its potential to save a lot of time on many tasks relating to real estate. It will make some mistakes but it will come up with credible basics that you can build on.

Here is an example using Open AI’s ChatGRP, perhaps a little more advanced that the Google version as it’s based on ChatGPT4 and Microsoft’s investment in Open AI.

Here’s a Shakespearean sonnet that it produced in seconds on the theme of “a landlord’s lot” which actually rhymes:

When I, the landlord, look upon my land,

I see a patchwork quilt of homes and fields,

A tapestry of renters, each a strand

That weaves its way among the grassy yields.

My duty is to tend this living earth,

To watch it prosper and to see it thrive,

To nurture every soul that finds its berth

Within the bounds of what I can contrive.

And yet, though I may try with all my might,

There are those tenants who will not abide

By all the rules I set, and in their spite

They cause me grief and make my spirit chide.

So as I gaze upon my land each day,

I find my lot, like all, is mixed with clay.

And here is a an outline for a business plan for a buy-to-let property investment:

Executive Summary:

The purpose of this business plan is to outline the strategy and objectives of a buy-to-let property investment. The investment will consist of acquiring and managing residential properties for the purpose of generating rental income and long-term capital appreciation. The plan is to target high-growth areas with strong rental demand, and to invest in properties that offer a good balance of rental yield and capital growth potential.

Market Analysis:

The buy-to-let market in [target location] is experiencing high demand due to [insert reasons, such as population growth, job opportunities, etc.]. The rental market is also experiencing steady growth, with rental rates increasing by [insert percentage] over the past [insert time frame]. The area has a shortage of affordable rental properties, which presents a great opportunity for investment.

Investment Strategy:

Our investment strategy is to acquire properties with a minimum yield of [insert percentage] and a potential for capital growth. We will focus on properties that are well-located, well-maintained, and offer good value for money. The properties will be purchased using a combination of equity and debt financing. The rental income will be used to cover the costs of mortgage payments, property management, and maintenance, with any excess cash flow reinvested back into the portfolio.

Marketing and Sales:

Our target market is primarily young professionals, families, and students who are looking for quality rental accommodation. We will advertise our properties through various channels, including online listings, local newspapers, and social media. We will also work with local estate agents to help us find and secure suitable tenants.

Operations and Management:

The properties will be managed by a professional property management company, which will be responsible for day-to-day operations, including maintenance, tenant screening, rent collection, and legal compliance. The management company will be selected based on their reputation, experience, and fees.

Financial Plan:

Our financial plan is to achieve a minimum return on investment of [insert percentage] per annum. This will be achieved through a combination of rental income and capital appreciation. We plan to invest [insert amount] in the first year, with an annual investment of [insert amount] thereafter. We project a net income of [insert amount] in the first year, with a projected annual growth rate of [insert percentage]. We plan to hold the properties for a minimum of five years, with the option to sell if the market conditions are favourable.

Conclusion:

Our buy-to-let property investment strategy aims to create long-term wealth through rental income and capital appreciation. We believe that the high-demand rental market in [target location] presents a great opportunity for investment. Our investment strategy is to focus on acquiring properties with strong rental yields and potential for capital growth. With careful planning and management, we believe that our investment will achieve our desired returns and provide a solid foundation for long-term financial security.

This technology is here to stay, and is likely to revolutionise many industries, including real estate management.

View Full Article: Artificial Intelligence and the landlord’s lot…

Sadiq and Gen Rent demand putting the boot into private landlords

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The Mayor of London, Sadiq Khan, and Generation Rent have smeared private landlords in a demand for an immediate Government crackdown on those who provide homes for tenants on housing benefit.

Mr Khan says it is ‘a scandal’

View Full Article: Sadiq and Gen Rent demand putting the boot into private landlords