Record numbers of Landlords reporting rising levels of tenant demand

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A record level of nearly 7 out of 10 landlords reported rising tenant demand in the third quarter of the year.

A survey of over 600 landlords by BVA BDRC, carried out on behalf of Paragon Bank, showed

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BREAKING: Government’s latest ‘green homes deal’ revealed

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The government has launched its Heat and Buildings Strategy, heralding a cheap clean heating revolution and promising to make heat pumps no more expensive – or even cheaper – to buy and run than gas boilers.

Home owners will receive government grants of up to £5,000 from next April to buy the pumps to replace their old boilers over the next decade through a new £450 million three-year Boiler Upgrade Scheme.

The government and industry will work together to help meet the aim of heat pumps costing the same to buy and run as fossil fuel boilers by 2030.

Business and Energy Secretary Kwasi Kwarteng (main picture) says recent volatile global gas prices have highlighted the need to double down on efforts to reduce Britain’s reliance on fossil fuels and move away from gas boilers over the coming decade to protect consumers in long term.

Phil Hurley (pictured), chair of the Heat Pump Association, says the industry is now ready to retrain the UK’s army of installers with the capacity to train up to 40,000 per year, to ensure consumers can find suitably trained and skilled heat pump installers.

He adds: “Today’s announcement will give industry and installers a huge confidence boost that now is the time to scale-up and retrain in preparation for the mass roll out of heat pumps, as well as making heat pumps as affordable as boilers, so all consumers can soon access and enjoy the benefits of affordable, reliable low carbon heating that stands the test of time.”

However, Dave Sheridan, executive chairman at Homes England-backed modular house builder Ilke Homes, says the new strategy must be more ambitious in its goal to decarbonise the UK’s housing stock.

“To avoid huge retrofitting costs, policymakers must prioritise the delivery of zero-carbon new homes now by bringing forward the requirement to reach the Future Homes Standard ahead of 2025,” says Sheridan.

“The government’s target of installing 600,000 air source heat pumps in UK homes by 2028 is achievable as half of those should be in new homes. The sooner we move to these low-carbon technologies, the sooner we can bring down capital costs.”

Green Homes Grant

Kevin Wellman (pictured), CEO of the Chartered Institute of Plumbing and Heating Engineering, tells LandlordZONE that he would like to see a viable alternative introduced to the Green Homes Grant Scheme.

“It is important that any schemes are easy for landlords and qualified installers to access, as there is a real danger of a miss-match between supply and demand,” he says.

“In order to achieve the government’s aspirations for net zero, 100,000 installers need to be upskilled in low carbon technologies.”

Many landlords believe the targets are wishful thinking and that its aim to see all rented properties raised to an energy rating of band C or above by 2030 is a ‘pipedream’ unless upgrades are backed with financial and practical support.

Read the Commons guide to the Heat and Building Strategy document.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: Government’s latest ‘green homes deal’ revealed | LandlordZONE.

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£450m government grants for 90,000 Heat Pumps

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Landlords don’t hold your breath as the Government announces £3.9 billion for decarbonising heat and buildings. Of this only £450m is allocated for grants of £5,000 to replace old gas boilers with new heat pumps. This would equate to 90,000 installations over 3 years for England and Wales.

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Detached homes see largest percentage rent increases

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Rents on detached homes increased twice as fast as the average for all UK properties during Q3 2021, according to The Deposit Protection Service (The DPS).

The average rents for detached properties during Q3 2021 rose £38 (3.52%) from £1,079 to £1,117

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NEW: Government’s latest ‘green homes deal’ to be revealed this week

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The government is expected to pledge to landlords and homeowners that installing a heat pump will cost no more than fitting a standard boiler by 2030 as part of its new Heat and Building Strategy due to be published this week.

Business and Energy Secretary Kwasi Kwarteng is set to announce plans to reduce the cost from £10,000 to £5,000 within three years along with a pledge to invest £60 million in heat pump innovation to make them smaller and easier to install.

However, landlords and heating experts have warned that any support will need to be easier to access than previous green schemes.

The government will announce 2035 as the cut-off date when natural gas boilers will no longer be installed in existing homes following its promise to fit 600,000 heat pumps each year by 2028 to help the UK meet its net zero target.

Low-carbon consultancy Gemserve says it understands that BEIS is considering an obligation on manufacturers which would require them to meet a minimum threshold of renewable heating system sales as a proportion of their total.

This proposal is similar to obligations placed on car manufacturers over recent years and has the potential to drive down costs.

Kevin Wellman (pictured), CEO of the Chartered Institute of Plumbing and Heating Engineering, tells LandlordZONE that he expects details of the Clean Heat Grant – which comes into effect next March – finalised, including which heating systems will be eligible.

He would also like to see a viable alternative introduced to the Green Homes Grant Scheme.

“It is important that any schemes are easy for landlords and qualified installers to access, as there is a real danger of a miss-match between supply and demand,” he says.

“In order to achieve the government’s aspirations for net zero, 100,000 installers need to be upskilled in low carbon technologies.”

Many landlords believe the targets are wishful thinking and that its aim to see all rented properties raised to an energy rating of band C or above by 2030 is a ‘pipedream’ unless upgrades are backed with financial and practical support.

Read the Commons guide to the Heat and Building Strategy document.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – NEW: Government’s latest ‘green homes deal’ to be revealed this week | LandlordZONE.

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Council Tax Liability – Quoting S6 Local Government Finance Act 1992?

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I started possession action due to persistent non-payment of rent in Autumn 2019. Possession was under S21 rather than S8 as advised by my solicitor. I obtained a court order on 27 March 2020 the day after the Govt ban on evictions.

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Rightmove Index up 0.3% in September with fierce competition over reduced supply

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The national average asking prices of newly marketed properties have risen by 0.3% (+£1,091) this month to hit a new all-time high of £338,462. Despite the traditional summer holiday lull, fierce competition continues among buyers for the record low number of available properties for sale.

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Landlords slam former Labour shadow chancellor’s ‘rent freeze’ proposal

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Former shadow chancellor John McDonnell has called for a year-long rent freeze to combat rising energy bills and the universal credit payment cut.

It follows the latest Household Resilience Study that shows 7% of private renters were in arrears in April-May, up from 3% in 2019/20, amounting to more than 780,000 renters.

However, his post on social media was quickly scorned by many landlords who posted that the move would only make PRS properties even more scarce.

One tweeted: “Why the obsession with landlords….I can tell you, you are widening the gap and causing far more good landlords to leave it to the bad ones. I’m getting sick of the perpetual one-sided argument.”

Another replied: “Why not suggest energy companies freeze prices or supermarkets freeze food prices. Are landlords just soft targets or seen as evil people for choosing BTL as an investment instead of stocks and shares like most MPs.”

Rent freeze

McDonnell has urged Rishi Sunak to impose the year-long rent freeze for all public and private sector tenants in England at the upcoming autumn Budget.

“Many families are facing a winter of worry and hardship from the cut in universal credit, hikes in energy prices and record rent rises,” he said.

“It’s a really tough and uncertain time for so many. A rent freeze will relieve many of them of major pressure on their household budgets this Christmas and provide increased security that they can afford to keep a decent roof over their heads. It will also assist the economic recovery from Covid by maintaining demand in our economy.”

Labour is also pushing the need for more social housing and believes that devolved and local government should be partners in the UK government’s objective of levelling up communities.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Landlords slam former Labour shadow chancellor’s ‘rent freeze’ proposal | LandlordZONE.

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Insurers claim this is subletting and Landlord doesn’t have control?

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Sadly, following a bad experience, one of the sites was converted into a Cannabis Factory. After usual arguments, AGEAS accepted liability and paid for lost damage around say £50k (Insured losses) uninsured cost (£20k).

The loss was in Jan

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What’s the latest in the rental market in 2021?

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According to our latest rental indices for 2021, in the first Quarter we saw rents being flat to slightly falling year on year – on a UK basis. This was mostly due to the comparison to the previous year when Covid was only just starting to become news, as opposed to the third lockdown we experienced at the start of this year.

The data suggests that the fall is minimal, with all Belvoir offices across England, Wales and Scotland showing the average rent recorded for Q1 2021 as £809 per month, which was just 1% lower than Q1 2020. Considering the huge impact of the pandemic on the economy, it’s pretty incredible how rents have held up during this time.
This is reinforced by looking at the data for Q2 2021 which showed far more positive results pretty much everywhere across the country as demand seems to be seriously outstripping supply. In the second quarter, when we compared a more open market versus the first lockdown, rents rose by 1.25% and when comparing the Q2 2021 average rent of £810 to the average rent for the whole of 2020, there was a slightly bigger year on year increase of 1.5%.

Although as anyone that invests in different parts of the country knows, the trends differ depending on the area and indeed the property type.

Houses remain in short supply and high demand

Looking at the Q2 results in 2021, 5% of surveyed Belvoir offices suggested prices for flats decreased (16% in Q2 2020), 12% saw flats rents staying the same (37% in Q2 2020), while 83% saw an increase (just 47% in Q2 2020).
For houses, the picture was stronger for rents with no offices reporting falls in Q2 2021, 5% staying the same and the majority – 95% increasing. In contrast, in 2020, a similar percentage of offices (7%) saw rents fall, 26% stayed the same while 67% saw an increase, so overall, rents for houses remained strong throughout the pandemic and are now increasing pretty much everywhere.

Although houses outperforming flats from a rental and price perspective is a trend we have reported on prior to the pandemic, there is no doubt that Covid has exacerbated it, not just in the rental market, but the buying/selling market too.

How do rental trends differ around the country?

We survey a selection of Belvoir offices to find out what’s happening ‘on the ground’ to demand and supply as well as rents. This is really helpful to existing landlords and investors to understand the direction of travel of their local area, but also for new investors, especially those looking to invest in an area they don’t know. Whether you are local or from outside the area, contact your local Belvoir office for great advice on buy to let and where and what to invest in locally.

Here’s this quarter’s selection of feedback from offices, but don’t forget there are over 40 individual town and city reports from Belvoir experts in our latest rental index!

Although rents in Q2 are up year on year, on average, in London it’s been a bit of a bumpy ride, however it appears the corner has been turned. Nick Kirby, who is based in Wembley, confirms static rents and demand for all properties during Q2 2021. However, he predicts in Q3 that both rents and tenant demand are likely to increase for all properties. And for those looking to buy, Wembley currently has an over-supply of two bed flats.

For more detailed reports from offices in London, including: Sidcup, please refer to the full report.

Moving to the Midlands, the Leamington Spa office run by John Warburton explained that both house and flat rents remained unchanged during Q2 2021. One change they are seeing is more call for two bed properties due to people now sharing, which has resulted in a slight rent increase. Overall, John reports there has not been a huge amount of movement in the area due to lockdown/Covid. Tenant demand for flats decreased, increased for houses and remained stable for HMOs. As elsewhere, tenants are looking to rent where they have gardens/outside space. Looking to Q3 2021, rents for flats and room rents are predicted to stay the same with house rents increasing. Demand is likely to increase across the board as there is a ‘super-lab’ opening in the area.

For more detailed reports from offices in the West Midlands, including: Stoke on Trent, Stone, Tamworth, Telford and Shrewsbury, please read the full report.

In the East rather than West Midlands, Alison Emms from Newark explains that in Q2 2021, a lack of supply and high demand is causing large increases in all rents for both flats and houses, and this trend is likely to continue during Q3 2021. Newark mainly has a shortage of two and three bed houses to rent.

For more detailed reports from offices in the East Midlands, including: Melton Mowbray, Long Eaton, Milton Keynes, Nottingham, Boston, Derby West and Burton, please refer to the full report.

Heading further ‘up north’ to Chester, Gordon Rogers says that rents are static for flats in Q2 2021, but houses in general have seen an increase. Both rents and tenant demand are expected to continue rising over the coming quarter for all properties.

For more detailed reports from offices in the North West, including: Bolton, Warrington and Burnley, please refer to the full report.

Further south, in Tunbridge Wells, Natalie Boardman reports all house rents increased by around 20%, while flat rents rose by 10% during Q2 2021. This is quite rare versus other areas, mostly rents only increase or decrease around 4/5% in our experience of running the Index. However, Natalie goes onto say that rents are predicted to remain unchanged over the coming quarter as they are already high, and further increases are not sustainable. Tenant demand for flats is also likely to remain unchanged but decrease for houses as demand for family homes may ease slightly now the SDLT holiday has passed, and those who needed a rental are now in one. In addition, as hospitality fully opens, more jobs will keep demand for smaller properties at the same level. Natalie confirmed low stock across the board.

For more detailed reports from offices in the South East, including: Andover, Southampton, Tadley, Haywards Heath, Thanet, Harlow and Swale, please read the full report.

And for those investing across the border, Rob Price from Cardiff and Pontypridd confirmed rents and tenant demand increased for every property type during Q2 2021. Flat and house rents are predicted to continue increasing over the coming quarter, with room rents remaining static, but demand increasing across the board. There is a shortage of most types and size of property, and Rob also confirmed, that this year many tenants have taken a cautious approach and remained at rental properties longer.

So, from a rental perspective, we can see that rental trends are, in the main, either pretty positive or predicted to increase in Q3 2021.

PRS fundamentals stay incredibly strong throughout the pandemic

Although it’s essential to understand what’s happened to rents during the pandemic, it’s also worth knowing if any of the key trends for landlords and tenants have changed too.

Firstly, we looked at whether tenants were more or less likely to ‘stay put’ during and post the pandemic. Not surprisingly, many tenants decided – or had to – stay put during the pandemic, and our stats show slightly less people were staying for less than a year and more staying for over 12-24 months. However, as we move out of lockdown during Quarter 2 2021, it appears that tenant trends are returning to normal.

Secondly, we considered whether landlords are more likely to experience void periods, but found there wasn’t much change throughout the pandemic and currently, void periods tend to be two weeks or less.

Although there is much talk of rent arrears in the press and we did see some increases in rental arrears, most tenants have continued to pay and in Quarter 2 2021, the offices surveyed tend to have either no rent arrears or less than three properties per branch with an issue.

One of the key benefits of working with a quality agent like Belvoir is whether you are a tenant or landlord, the chances of an eviction are always very low and although evictions rates fell to almost zero during the pandemic, once the rules were relaxed, most offices starting evictions again are still only evicting two or three tenants per branch.

Finally, we asked franchise owners whether landlords had been more or less likely to buy and sell property which would affect future stock levels. Overall, we didn’t see a big uptick in landlords selling up, but we did see some landlords holding off during the start of lockdown whereas so far this year, we’ve seen more landlords come back into the market.

So, although the pandemic has had a devastating impact on many markets and people across the UK, overall, the private rented sector, including both tenants and landlords has survived incredibly well, suggesting that buy to let remains a good investment into the future.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – What’s the latest in the rental market in 2021? | LandlordZONE.

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