EPC upgrades and tenants ‘terrified’ of bills creating more damp, politicians told

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Increasing numbers of landlords are reporting damp and mould problems after forking out for energy efficiency work, it has been claimed.

John Blackwood (pictured), chief executive of the Scottish Association of Landlords, told MSPs that it had seen a significant increase in calls about damp and mouldy properties from members, particularly those who had not previously had an issue.

“Members are finding problems with homes as a direct result of putting insulation into a property,” he explained. “This is due partly to issues with insulation and fitters doing the work – you don’t know how good or bad these people are until you get a problem.”

Terrified

Giving evidence to the Scottish Parliament’s housing committee, Blackwood said tenants reported that they weren’t switching on their heating because they were terrified of bills, which had also caused problems.

Groups giving evidence said tenants should not automatically be blamed for issues in their homes or criticised for not knowing how to cook potatoes and showering too frequently. Instead, fuel poverty and under-investment in social housing had to be addressed.

Aoife Deery, social justice policy officer at Citizens Advice, added: “Clients get blamed for their lifestyle, but it often links back to fuel poverty and high energy costs – they can’t afford to lose heat through proper ventilation.

“It’s often expensive and difficult to diagnose damp and mould – that’s why we see delays of months or years.”

Housing and tenant bodies were generally supportive of private landlords, with Debbie King, head of advocacy at Shelter Scotland, saying they needed support and funding to upgrade current homes.

Living Rent agreed that there should be a funding pot around retrofit and Shona Gorman, of Central Scotland Regional Network of Tenants, agreed: “We can’t just say to landlords ‘you have to deal with this’ and walk away – they need support.”

Watch the session in full.

View Full Article: EPC upgrades and tenants ‘terrified’ of bills creating more damp, politicians told

Tax to double for Airbnb rental properties in Scots holiday hotspots

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The Scottish Government has followed its English counterpart and revealed plans to manage the number of second homes and holiday rentals more aggressively within the country’s key tourism hotspots.

Its proposals include enabling local authorities to either double or more than double council tax in these areas for second homes in order to encourage ‘more residential accommodation to be used for living in and for these to be occupied for more of the time’, the document says.

It is also seeking landlords and owners’ views on increasing the ‘non-domestic’ rates charged on self-catering accommodation.

“Local areas need to decide how to achieve the right balance in the use of housing to meet local needs and to support thriving communities,” the official announcement adds.

“That is why we are also asking for views on whether the current non-domestic rates thresholds for self-catering accommodation should change, and/or if councils should have discretion to set them.”

The three MSPs backing the consultation, which include housing minister Paul McLennan (pictured), say that over the past decade the growth of online platforms like Airbnb and Booking.com has fueled the trend for residential homes, particularly in tourist hotspots, to be changed from primary homes to be used for short-term lets or second homes.

“This can cause problems for neighbours and make it harder for local people, particularly young people or those with fewer resources, to find homes to live in,” says McLennan.

“We also remain concerned about the number of empty homes in Scotland, which could potentially be brought back into use for people to live in.”

Second homes

Definitions are important in the debate, and the MSPs say a ‘second home’ is an additional residence not used as a main home but lived in for at least 25 days a year.

An ‘unoccupied home’ is a property not used as a main residence or a second home.

Such properties will have the increased council tax applied if they are offered to rent commercially for more than 140 days a year, and rented for more than 70 days a year.

The main thrust of the new proposed tax policies is that, if a property is not used for whatever reason (i.e. as a second home or simply not used) then the owners will be required to contribute more to the local economy, not less.

Read the consultation document, which includes detail on how to respond.

View Full Article: Tax to double for Airbnb rental properties in Scots holiday hotspots

Rising rents force tenants to become first time buyers

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While house price growth has slowed to 3%, the country’s high rents mean it is cheaper for tenants to buy, research from Zoopla reveals.

The platform says that the worst of the house price falls ‘is over’

View Full Article: Rising rents force tenants to become first time buyers

National Grid insulation scheme?

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Hello, has anyone had any dealings with any contractors who are applying for government funding for insulation under the National Grid insulation scheme?

I have a flat that is a bit low on insulation. It has been agreed by the surveyor it can be topped up for free and they have put me in touch with the actual company that will be doing the work.

View Full Article: National Grid insulation scheme?

Women renters welcome at novel new block – but men shown the door

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Britain’s first women’s-only tower block has been given the green light by planners in west London.

The scheme for 102 flats will be available to single women renters at low social rents for those who face inequality, abuse and disadvantages in the housing market.

Men will only be able to live in the block if they become a tenant’s partner or if they are the adult child of a female tenant and inherit the tenancy. Transgender women, including people intending to undergo gender reassignment, will be allowed, but men who cross-dress, transgender men, and anyone with a known history of male violence against women or children will not.

Ealing block

Design details at the 15-storey block in Ealing could include slightly lower kitchen work surfaces and careful attention to ventilation to ensure comfort for menopausal women, according to landlord Women’s Pioneer Housing (WPH), which also plans to build another low-rise women’s-only complex in Shepherd’s Bush. The scheme is being developed in partnership with L&Q, one of London’s largest housing associations.

Domestic violence

WPH chief executive Tracey Downie told The Guardian that the block would be home to women who “have been unable to afford good affordable housing themselves because of their level of income or vulnerability”. This may be because they have been sexually harassed by a private landlord, are full-time mothers relying on income from a partner from whom they are now separated or have been the victim of domestic violence.

However, the plan sparked a flurry of comments on social media from those who feared vulnerable women would be at risk from biological men who identify as women, while others accused it of discriminating against men.

View Full Article: Women renters welcome at novel new block – but men shown the door

Landlords must ACT NOW to reduce tax payable on account this JULY

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Payments on account are advance payments towards your tax bill for the following year based on the tax you owed in the previous year. These payments are due in two instalments, one on January 31st and the other on July 31st.

View Full Article: Landlords must ACT NOW to reduce tax payable on account this JULY

Guarantor for tenants?

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Hello, If anyone has children in university, they’ll be familiar with the annual signing of the guarantor agreement, promising to pay the rent should your young student fail to do so themselves – and, if you don’t read the agreement carefully

View Full Article: Guarantor for tenants?

Airbnb scam alert? A landlord’s tale of deceit, tenant troubles and growing costs

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Hello, I am writing to report a situation regarding the leasing of my flat in South West London. I enlisted the services of a small local agency and we eventually found a tenant, a Canadian citizen who visited the property with his girlfriend.

View Full Article: Airbnb scam alert? A landlord’s tale of deceit, tenant troubles and growing costs

How We Escaped The Landlord Tax Trap

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On paper my spouse and I were worth £3,000,000 but the reality was that we had no savings, no money whatsoever to live on after paying our tax bills, and this was despite having rental income of £300,000 a year coming in.

View Full Article: How We Escaped The Landlord Tax Trap

Sharp decline in UK commercial property investment

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The amount of money flowing into UK commercial property fell across all sectors, particularly industrial, but also offices and retail, that’s according to market analysis carried out by debt advisory specialists, Sirius Property Finance.

And office values – secondary in particular – are still falling as the asset class comes under pressure from hybrid working and the heightened risk of obsolescence due, among other things, to low energy efficiency ratings.

However, despite commercial property investment remaining subdued in Q1, 2023, there is a more positive outlook for both industrial and prime office sectors according to MSCI and the Royal Institution of Chartered Surveyors’s (RICS) commercial property monitor.

RICS latest findings show that the sector has gone through a decline and continues to struggle with higher borrowing costs and a subdued UK economic growth outlook. This, the chartered surveyor’s professional body says, is particularly affecting demand in the ‘secondary office’ and retail parts of the market.

But the current RICS survey is more upbeat than the previous quarter’s with a majority of respondents still viewing the market in a downturn, but more respondents now feel that conditions are stabilising, or even beginning to improve.

The Sirius analysis

Sirius Property Finance carried out its own analysis of the commercial property investment market over the past six months. Sirius compared this directly to investment over preceding six months in order to get a full understanding of current trends in what is one of the UK economy’s most vital cogs.

Their research finds that in terms of money invested, the biggest decline has been seen in the industrial sector, falling by -55%. In the last six months, £2.9bn has been invested, down from £6.9bn in the six months before that.

Office space investment declined by -55% in the past six months, driven by a -63% drop in investment outside of central London. Despite this, office space is still receiving the highest amount of total investment at £3.8bn.

Meanwhile, according to the Sirius findings, retail & leisure declined by -45%, with this decline being driven by a drop of -75% coming in shopping centre investment, followed closely by a -74% drop in leisure investment.

In terms of the number of transactions, offices have seen the sharpest decline, falling by -44%, driven by a -64% drop in central London.

Retail & leisure transactions have fallen by -40% with shop units enduring the most severe drop of -47%. Meanwhile, industrial transactions have fallen by -35%.

The average amount of money invested via each transaction has also fallen across the board. The biggest drop has come from the industrial sector, falling -35% from £22m to £14.3m.

The average investment made into office space has reduced by -19%.

For retail & leisure the decline is -8%. This, however, is only saved from being a more dramatic drop by a remarkable 194% increase in the average transaction amount put into shop units which has risen from £5.4m to £15.9m in the last six months.

Kimberley Gates, head of corporate partnerships at Sirius Property Finance, has said:

“It has been a difficult six months for the commercial sector.

“It has been struggling since the start of the pandemic and the subsequent retreat from town and city centres, but now that additional economic uncertainty has been placed on top, the situation has worsened.”

She adds:

“Looking forward, the commercial sector’s recovery is going to be dependent on taking a more contemporary approach to space. While industrial units are likely to return to strength due to the immovable presence of e-commerce, retail and offices need to adapt to modern sensibilities.

“Mixed-use space is important – living, working, and playing in one multifaceted building, for example – but so too is a more experiential approach to physical retail, providing shoppers with something more than online retail can provide.

“We’ve seen how successful this can be with Barnes & Noble in America, and beauty brand Sephora across mainland Europe.”

RICS senior economist Tarrant Parsons said about their research:

“Although the picture across the UK commercial property market remains generally subdued in the face of higher interest rates and a soft economic outlook, the latest [RICS] survey feedback tentatively suggests that the most difficult period for the market may now have passed.

“Capital value expectations for industrial assets returned to modestly positive territory, having fallen sharply at the end of last year. This improvement has been supported by still solid occupier conditions across the sector, with demand for industrial space continuing to outstrip supply.

“Likewise, many of the more alternative sectors, such as aged care facilities, life sciences, data centres and student housing display a resilient outlook for the year ahead. By way of contrast, secondary office and retail properties continue to struggle, evidenced by rental and capital value projections remaining deeply negative, across both segments for the coming twelve months.”

According to RICS, tenant demand was -3% in the first three months of the year, a figure that’s a big improvement on -20% for the final quarter 2022. Industrial has picked-up for occupier demand, showing a net balance of 16%, compared with just 6% in Q4, 2022.

RICS found tenant demand “flat to marginally negative” for office space, with a net balance of -6%, and continuing to fall across the retail sector to -23% but this was less negative than in the previous quarter, and respondents were more positive about prime offices.

RICS says:

“Expectations turned from negative to slightly positive in both the prime and secondary portions of the industrial market. Across the prime office sector, values are now seen holding steady over the year ahead (net balance 6% vs minus 31% in Q4 2022), although expectations remain deeply negative for secondary office values (net balance minus 44% compared to minus 65% previously).”

View Full Article: Sharp decline in UK commercial property investment