Average rents hit £1,000 for the first time

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Tenants moving into a newly let property are facing average rents outside of London of more than £1,000 for the first time, data reveals.

Hamptons says renters are facing a £1,002 bill and in April, that was £72 or 7.8% more than it was in April 2022.

View Full Article: Average rents hit £1,000 for the first time

Hybrid LLP structures GAME OVER!

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It’s game over for most Hybrid LLP tax structures.

A “Hybrid” / Mixed LLP is a Limited Liability Partnership where one or more Members is a Limited Company.

Following our article “How Property118 Are Helping A Landlord To Resolve A Serious Hybrid LLP Tax Planning Blunder”

View Full Article: Hybrid LLP structures GAME OVER!

An open letter to Polly Neate at Shelter

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Below, we publish an open letter from Property118 reader, ‘Dismayed Landlord’.

He details issues about helping his tenants – and wants Polly Neate, the chief executive of the homelessness charity Shelter, to help him find housing for his tenants as he is intending to sell up.

View Full Article: An open letter to Polly Neate at Shelter

How Property118 Are Helping A Landlord To Resolve A Serious Hybrid LLP Tax Planning Blunder

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Stay tuned for the big reveal – the name of the accountant responsible for this catastrophic situation will be unveiled soon. But first, we’re working to negotiate a settlement with HMRC on behalf of the landlord who’s now facing a hefty bill in taxes

View Full Article: How Property118 Are Helping A Landlord To Resolve A Serious Hybrid LLP Tax Planning Blunder

Signs of a turnaround in the UK construction industry…

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Construction activity is continuing to grow in the UK. That’s according to the April S&P Global / CIPS UK Construction Purchasing Managers’ Index® (PMI), as reported by PCBToday, a Construction, Planning and Building Control portal.

Construction companies in the UK the survey shows continue to experience an increase in construction activity. Although the PMI survey shows that this expansion is unevenly distributed across the sector, there are definite signs of growth, the early green shoots of a recovery, but housebuilding is still depressed.

The supply problems post-Brexit and post-Covid in the building materials market are beginning to ease with building materials supplies reaching their highest level since September 2009. Prices have stabilised as building materials have become more readily available, and the transportation bottlenecks and delays have eased. The materials price inflation brought about by the Brexit / Covid shocks has reduced to its lowest level in the last two-and-a-half years.

The monthly releases for the S&P Global / CIPS UK Construction Purchasing Managers’ Index® (PMI®) provide an insight into construction production and the performance of the sector. The index is ‘based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 170 construction companies’.

The importance of PMI indicators

Construction activity indicators provide critical insights into the health of the broader economy, as an increased level of this activity gives an early sign of recovery, it plays such a key role in showing how the overall economy is performing perform.

Construction figures include residential, commercial, and industrial construction. Commercial and industrial building activity includes the construction of hotels, office buildings, schools, hospitals, and other institutional buildings. Residential activity includes new housing single family homes as well as multi-home buildings such as apartments and flats.

Construction spending accounts for around 5 per cent of the overall UK economy in any given year, as measured by gross domestic product (GDP). When businesses are investing in new construction, it typically indicates that economic growth is building and on the road to recovery. The converse is true of course and weak construction activity is troubling news for the economy.

These construction activity indicators are based on statistics gathered through monitoring hard data as building approvals, construction progress over a given period, overall construction spending, the state of the construction workers employment market, and even the number of buildings being demolished. All of these data points can give insights into the direction of the economy, though one month’s data has to be viewed with caution, until a definite trend can be established.

Construction Statistics

In the case of UK construction, a PMI score of 50 represents the neutral line, neither increasing or decreasing. Anything higher indicates growth, while lower indicates weakness. The latest figure for April showed a slight increase from 50.7 in March to 51.1 in April. This will be the third month in a row that the figure has remained above 50 and growing, which would indicate the beginning of a positive trend.

According to PCBToday, construction activity has soared in the commercial sector with commercial building expanding the most with an index score of 53.9. This has been achieved despite survey respondents reporting headwinds in growth from tighter client budgets and higher cost-inflation.

The April figures also show positive growth in civil engineering and construction projects with an index score of 52.0, supported by ongoing and durable pipelines of large Government backed infrastructure projects.

Housebuilding is the problem child

The April PMI figures show that, as expected, weakest performing part of the construction industry is housebuilding with an index low of 43.0 Respondents in this sector put this down to a reduction in demand for private housing due to increased mortgage rates resulting in new building projects being put on hold.

Removal of house-building targets

The controversial move by Rishi Sunak, after admitting that the Government scrapped national housebuilding targets because Tory members do not approve of them has exacerbated the home building decline, and has led to fears that the decision puts at risk the Tory’s manifesto pledge to build 300,000 new homes a year.

The rate of decline in total residential work was the largest in almost three years says PCBToday. The April survey respondents said that “delays in new house-building projects and a reduction in demand due to softer market conditions and increased borrowing costs contributed to this decline.”

The growth in new work in the commercial sector was linked to robust demand from clients, particularly for new commercial building projects. Employment rates in commercial construction rose moderately, but input buying only expanded slightly.

Supply chain improvements are continuing with suppliers’ lead times now reduced to their highest extent in just over thirteen-and-a-half years says PCBToday. This improved supply and reduced demand have together reduced cost pressures throughout the construction industry. The purchase price inflation rate was reported as the lowest since November 2020.

Construction firms are optimistic about a rise in business activity for the upcoming year, although confidence levels decreased to a three-month low. Around 44% of the survey participants predict an increase in output over the next year, while only 13% expect a decline.

Rising construction activity has brought cautious optimism

Respondents to the survey expressed optimism concerning the robust demand from clients. However, some companies raised concerns regarding the sluggish housing market activity, increasing interest rates, and the uncertain economic outlook.

“After a difficult start to the year in January, it’s positive to see the sector continuing to bounce back with a sustained period of growth. While the sector as a whole may not be firing on all cylinders, reports of both commercial work and civil engineering expanding demonstrate the greater confidence found in the market. Avoiding a recession and the continued easing of both cost and supply pressures have undoubtedly been key drivers in boosting activity,” said Fraser Johns, Beard finance director.

View Full Article: Signs of a turnaround in the UK construction industry…

Landlords rushing to sell as mortgage costs soar above tenants’ rent

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Private landlords across the UK have found themselves in hot water, and it’s no surprise that many are rushing to sell their property portfolios.

A recent article by the BBC reported that private landlords had expressed critical concerns that their rents won’t cover the cost of mortgage payments

View Full Article: Landlords rushing to sell as mortgage costs soar above tenants’ rent

Major portal launches national ‘rent passport’ initiative for tenants and agents

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One of the UK’s big property portals has launched an initiative to enable renters to become ‘rent ready’ as they hunt for homes.

OnTheMarket.com, which is a competitor with Rightmove and Zoopla, has now fully integrated Canopy’s RentPassport service into its platform.

The concept, which has been tried before, it to encourage tenants to become ‘pre-qualified’ before or during their house-hunting and help letting agents, and their landlord clients, determine who are the best-qualified tenants.

Rightmove tried it in 2019 but ended the service in 2020, and only a few months ago the Government decided a national ‘rental passport’ system would be too complicated to launch and that it would be better left to the private sector.

Pre-qualification

Now, when tenants enquire online about a property via OnTheMarket listed by agents signed up to Canopy, they are now prompted to create a RentPassport.

This enables them to share important information such as income, credit history and rent payments to qualify them as a serious applicant or set up their passport via the portal’s MyPlace platform.

Jason Tebb, OnTheMarket’s CEO (pictured), says: “Giving movers the opportunity to add this extra layer of pre-qualification to their enquiries will help our agents identify their strongest leads, while also helping our consumers get best prepared to secure their next rental property.

“We remain committed to differentiating our offering with fresh solutions for agents and we are proud to be enhancing the moving process for our renters.”

Chris Hutchinson, Canopy’s CEO, adds: “Our partnership is uniquely placed to launch a true pre-qualification offering that enables agents to focus their time on their strongest leads and allows renters to see how they look to the property industry, empowering them to put their best foot forward.”

View Full Article: Major portal launches national ‘rent passport’ initiative for tenants and agents

Deposit still held after tenancy has ended?

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Hello, a deposit is still being held by a registered scheme more than six years after a tenancy has ended. The tenant ended the tenancy early and they agreed I could keep the deposit and I have this on video.

View Full Article: Deposit still held after tenancy has ended?

BLOG: Hit or miss – how will the long-awaited Renters’ Reform Bill be received?

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In the first in a series of blogs for LandlordZONE on rental reform, Sean Hooker, Head of Redress at the Property Redress Scheme, shares his thoughts on yet another delay to the Renter’s Reform Bill and whether the sector could still have a chance to steer the process.

Long and winding road

Does anyone remember the Aesop fable, “The boy who cried wolf?” Well, I am beginning to feel this is me when it comes to the Government’s announcements of reforms in the rental sector.

The banner, “Coming Soon” is now well worn and in the last few weeks we have been confronted by contradictory statements by ministers on what season we should expect the Bill to finally roll off the press.

We knew the proposed legislation was promised this parliamentary session, but as this has been extended till next autumn this led to speculation that the pressures on the parliamentary timetable could delay the introduction of the legislation further.

This was hinted at by the current minister, tasked with delivery of the Bill, Rachel Mclean, who took over the portfolio from Felicity Buchan in an internal job swap in DLUHC.

This did not stop head honcho Gove telling Laura Kuenssberg at the end of March that everything was on track for a D-Day of a couple of months.

Mayday Mayday!

Easter has come and gone, the crescent moon has been spotted over Mecca, so Eid Mubarak and now we enter the merry month of May with the lesser spotted Renter’s Reform Bill still nowhere to be seen.

With three bank holidays this month, one of course for the King’s Coronation, this would always mean very little time to dot the Is and cross the Ts, if the legislation is to start wending through the parliamentary process. So it was always tentative that the timetable would be met. 

And then hope!

A confirmation came that the Bill will be laid the week after the King’s Coronation. Of course, off the back of this, it was all hands to the pump. Teams were lined up to start looking at the publication in minute forensic detail, blogs, podcasts and webinars planned and spokespersons briefed to be available.

Hopes dashed

The week before the Coronation Goodlord published my latest blog in which I asked, where was the Renter’s Reform Bill? Then as explained above, within a couple of days the Government announces that it is due the week after, so we change the blog to reflect that.

I then wake up on the Wednesday, after rumours abounded the day before, to find the introduction has been postponed because of “procedural issues”. What this means, who knows!

Some commentators are saying that, due to concerns among back-benchers on the Government side, parts of the Bill are going back to the drawing board (it evidently did not get a good reception at the pre-screening) and meanwhile the opposition were having a field day.

Stand down the troops. But stay on high alert! Goodlord changed my blog once again. What a Hokey Cokey.

One last chance

So, we are now waiting for a new date for the Bill, and whilst I have been flummoxed on predictions every time previously, the First Reading of the Bill will take place very shortly.

It has to be because Parliament goes into recess and rises for Whitsun on 23 May, not returning until 5 June and thereafter it is the short summer session before the House rises again on 20 July.

I therefore believe the political pressure will be mounting to get the Bill out before the end of May and, given that the First Reading literally take a few minutes, start cracking on with the graft on the Bill when MPs return. Yes, we are close but still no cigar.

Subject to change

What I also know, however, from my communications with the civil servants (no spoilers), is that they are hopeful that as the “heavy lifting” has been done, cumulating with the White Paper, the subsequent round tables and other consultations, the passage of the Bill should be straight forward and not contentious, however we have heard that all before.

Even as recent as mid-April, the meetings with the stakeholders were still going on with leading industry figures still expressing concern. So, what the final director’s cut of the blockbuster will look like is still to be determined and of course that is before MPs get their hands on it.

We can also surmise that a good part of the proposals will not be fully fledged and therefore will be light on details within the Bill, with enabling powers granted to the Government to work on the changes further and introduce them later through secondary legislation.

There is even a suggestion that “helpful” amendments will be introduced during the legislative process, giving the department more time to firm up the proposals and put more flesh on the bones.

All that’s needed is the green light and for the Government to realise that, as American President Teddy Roosevelt wisely exclaimed, “Knowing what’s right, doesn’t mean much unless you do what’s right”.

View Full Article: BLOG: Hit or miss – how will the long-awaited Renters’ Reform Bill be received?

Short-term room rentals and damage deposits?

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Hello, I run a company that specialises in Airbnb holiday lets and short-term room rentals. Last year a lady contacted me and asked if she could rent a room on a monthly basis I took a damage deposit as she was only meant to be there short term.

View Full Article: Short-term room rentals and damage deposits?