Are letting agents playing fair with their fees?

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Hello. Our lettings agents found us tenants who stayed a year and then asked to renew for another year. Their contract was renewed for a further year and our agent charged us 8% of ‘incoming rent ‘ for the following year

View Full Article: Are letting agents playing fair with their fees?

Q4 Property Market Insight

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Exorbitant energy bills continue to fuel the ongoing cost-of-living crisis, and continued rate hikes put downward pressure on the property market. But is it all doom and gloom, and what does Q4 have in store for the UK property market?

Property growth is slowing

As the cost-of-living crisis endures, the Bank of England’s seven rate rises since December 2021 are certainly having the desired effect on reducing inflation when it comes to the property market.

While house prices decreased by a marginal 0.1% for the month of September (compared to a 0.3% rise in August), the annual rate of growth dipped further from 11.4% to 9.9%. This is the first time that the annual house price inflation figure has entered single figures since January 2022. According to Halifax’s latest report, this brings the average cost of a UK property back down to £293,835 from the record high of £293,992 seen in August. 

The current Bank rate sits at 2.25%, and experts expect another marginal increase, further impacting mortgage costs. That said, current Rightmove data shows buyer demand is still up 27% compared to 2019, and average new seller asking prices are up 1% compared to one month ago. 

Rental prices and demand continue to rise

Rents have surged across most UK regions since the beginning of the year, particularly in London, the North West, Wales and Scotland. 

Demand for rental properties is also at an all time high, with Rightmove data showing that unique rental enquiries across the UK stood at 567,000 in September 2022, a huge 43.6% increase from five years ago. 

With such an increased demand for renting, this is pushing up rental prices, making for attractive yields for many investors.

1 & 2-bedroom apartments are back in demand

The cost-of-living crisis appears to be pushing renters into smaller flats. The demand for one-bedroom flats rose to 31% (as a percentage of applications of all property types) in August 2022, while applications for two bedrooms also increased to 35% for the same period. Conversely, demand for two and three-bedroom houses dropped to 11% and 12% respectively. 

In addition to cheaper rents, tenants are attracted to one and two-bedroom apartments given their cheaper/more efficient running costs when compared to a house. As we approach the winter months, renters are making moves to reduce their outgoings – it costs approximately 40% less to keep a purpose-built apartment compared to a three-bedroom terraced property, while flat conversions are also estimated to be 25% cheaper to heat.

Eco-friendly properties are more desirable

A new study from Knight Frank compares the Energy Performance Certificates (EPC) ratings of 30,000 properties in relation to their home’s value. The results demonstrated that improving the energy efficiency of a property can improve its value above and beyond any local average growth; the homes which had an improved rating of C from D were seen to achieve an extra 3% in value growth in addition to any average local price growth. This additional growth was found to equate to the equivalent of around £9,000 (based upon average local resale values). 

In addition to the potential for increasing a property’s value, carrying out eco-friendly improvements can make it more desirable to tenants too. Especially given the current cost-of-living crisis and soaring energy bills, energy-efficient homes are in increasingly high demand.

If you are considering renting a property, get in touch with our friendly team of property experts at Leaders and see how we can help.

View Full Article: Q4 Property Market Insight

Man on a Mission?

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I was somewhat surprised by Rishi Sunak’s re-appointment of Michael Gove as Housing Secretary late yesterday. After all, it’s just three months ago that he was fired by Boris Johnson and he announced plans to quit politics. But I’m pleased he’s back

View Full Article: Man on a Mission?

Landlords urge Gove to ‘get weaving’ on issues affecting sector as returns to Cabinet

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Landlords have warned Michael Gove, the new Secretary of State for Levelling Up, Housing and Communities, that he has a full in-tray of ‘to do’ tasks for the private rented sector as he returns to run the department.

Gove (main picture, on the right) met with his Cabinet colleagues yesterday to kick off the PM’s tenure in office, which will now last two years until another General Election must be called.

Ben Beadle (pictured), who is Chief Executive of the National Residential Landlords Association, says that although his organisation wants to congratulate Gove on his return to housing, there are many issues that require remedy, and already-announced initiatives that need progressing.

Top of his in tray will be progressing with the plans he previously worked on to reform the private rented sector, including ending Section 21 repossessions,” says Beadle.

“Our survey data shows that most [landlords] can envisage operating without Section 21 provided other proposals, such as on court reform and reformed grounds for possession, have their confidence.

“We will work constructively with the new Secretary of State to ensure the final reform package has the confidence of responsible landlords and tenants alike.

“This includes the need for action to tackle anti-social tenants, scrapping plans that would decimate the student housing market, and reforming the courts to ensure legitimate possession cases are dealt with more swiftly.”

Section 21 anxiety

As our joint LandlordZONE/Landlord Action webinar yesterday proved after just shy of 2,000 signed up to watch it, anxiety among landlords and the wider PRS is running high over Section 21 evictions being banned.

As Paul Shamplina explained during the 45-minute webinar, landlords are still waiting to hear from the Government how they will evict tenants who build up significant rent arrears without good reason without having to wait months and spending thousands on court and bailiff action.

Hopefully Gove will be able to reveal his department’s plans for the Renters Reform Act soon.

Watch Shamplina’s view on what will happen when S21 is gone

View Full Article: Landlords urge Gove to ‘get weaving’ on issues affecting sector as returns to Cabinet

Landlords urge Gove to ‘get weaving’ on key issues as he returns to Cabinet

admin    Uncategorized     agents

Landlords have warned Michael Gove, the new Secretary of State for Levelling Up, Housing and Communities, that he has a full in-tray of ‘to do’ tasks for the private rented sector as he returns to run the department.

Gove (main picture, on the right) met with his Cabinet colleagues yesterday to kick off the PM’s tenure in office, which will now last two years until another General Election must be called.

Ben Beadle (pictured), who is Chief Executive of the National Residential Landlords Association, says that although his organisation wants to congratulate Gove on his return to housing, there are many issues that require remedy, and already-announced initiatives that need progressing.

Top of his in tray will be progressing with the plans he previously worked on to reform the private rented sector, including ending Section 21 repossessions,” says Beadle.

“Our survey data shows that most [landlords] can envisage operating without Section 21 provided other proposals, such as on court reform and reformed grounds for possession, have their confidence.

“We will work constructively with the new Secretary of State to ensure the final reform package has the confidence of responsible landlords and tenants alike.

“This includes the need for action to tackle anti-social tenants, scrapping plans that would decimate the student housing market, and reforming the courts to ensure legitimate possession cases are dealt with more swiftly.”

Section 21 anxiety

As our joint LandlordZONE/Landlord Action webinar yesterday proved after just shy of 2,000 signed up to watch it, anxiety among landlords and the wider PRS is running high over Section 21 evictions being banned.

As Paul Shamplina explained during the 45-minute webinar, landlords are still waiting to hear from the Government how they will evict tenants who build up significant rent arrears without good reason without having to wait months and spending thousands on court and bailiff action.

Hopefully Gove will be able to reveal his department’s plans for the Renters Reform Act soon.

Watch Shamplina’s view on what will happen when S21 is gone

View Full Article: Landlords urge Gove to ‘get weaving’ on key issues as he returns to Cabinet

Rent growth exceeds 2% for the second quarter in a row

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The average UK rent rose by more than 2% for the second quarter in a row during Q3, says The Deposit Protection Service (The DPS).

The country’s largest protector of deposits said that average rents increased by 2.18% (£19) to reach £889

View Full Article: Rent growth exceeds 2% for the second quarter in a row

Gove returns as Secretary of State for Levelling Up, Housing and Communities

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Michael Gove has made one of this week’s big political comebacks after being appointed once again as Secretary of State for Levelling Up, Housing and Communities, this time by new PM Rishi Sunak.

Gove was sacked from the job by Boris Johnson in July this year after joining the growing chorus calling for Johnson’s resignation in a letter signed by other leading MPs including Lee Rowley, who later became a junior housing minister during the Truss premiership.

Rowley remains in the line-up at the time of writing. He replaced Eddie Hughes who had been praised for his work getting the Rent Reform Act off the ground but who clearly wasn’t on ‘team Truss’. Yesterday Hughes was pictured at Sunak’s side in his capacity as a member of the 1992 Committee that ousted Truss and helped anoint the new PM – so revenge really is best served cold.

United ‘big tent’

The re-appointment of Gove is part of a determination by Sunak to build a ‘big tent’ of figures from the different and often politically opposed wings of the Conservative party in order to build unity and restore trust in the Government by re-introducing ‘professionalism’ to its ranks – a clear dig at Johnson by Sunak yesterday.

This is something that Gove, who may be disliked by many Conservative Party members for turning on Boris, was appreciated for during his short spell at the Department of Levelling Up, Housing and Communities (DLUHC) earlier this year.

Trade body Propertymark’s Head of Policy and Campaigns, Timothy Douglas (pictured), makes the point: “The Levelling Up agenda and reforms to the private rented sector in England would appear to be back and will take centre stage in the new government as Michael Gove returns to the DLUHC.

“Mr Gove previously focussed on regional disparities and fixing the cladding scandal, but he now needs to go further and tackle the supply crisis in the private rented sector, implement the next steps for leasehold reform, set out the UK Government’s plans for home buying and selling as well engage with the sector to get more people onto the housing ladder and stimulate right sizing to release large, family homes.”

But Gove’s return was most likely a surprise to him too – only a few weeks ago he had lauded his return to the back benches, and had been putting himself about as a paid-for conference speaker, something those in Cabinet are not allowed to do.

View Full Article: Gove returns as Secretary of State for Levelling Up, Housing and Communities

Landlord and agent given fines totalling £28,000 over unlicensed HMO

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A landlord and letting agent in Liverpool who were operating an unlicensed HMO have been slapped with fines totalling £28,000.

An inspection by Flintshire County Council’s private sector housing team discovered that there were five tenants living in the HMO in Hawarden, Deeside.

At Mold Magistrates court, landlord Jayne McGuinness was fined £6,000 after she was found guilty of operating an HMO without a licence, appointing an unlicensed agent to carry out lettings work and property management work.

Her agent, RVC Estates, was found guilty of operating an HMO without a licence and four offences of not complying with HMO management regulations and fined £10,000.

Director Richard Collins was found guilty of operating an HMO without a licence, carrying out lettings work and property management work without a Rent Smart Wales Licence, four charges of not complying with HMO management regulations and failing to comply with an Improvement Notice. He was fined a total of £12,000.

Additional costs

They did not attend the court hearing and, along with the fines, were ordered to pay an additional £1,640 in costs.

Flintshire’s cabinet member for planning, public health and public protection, councillor Chris Bithell (pictured), says the successful prosecution sends a clear message that the council will protect its residents from rogue landlords who operate unlicensed HMOs and don’t comply with the Rent Smart Wales laws designed to protect tenants.

He adds: “It reflects Flintshire’s commitment to ensuring homes in the private rented sector are properly managed.” 

Pic credit: Google Streetview

View Full Article: Landlord and agent given fines totalling £28,000 over unlicensed HMO

MP says Treasury ‘looking into’ measures to cool market for Airbnb properties

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Treasury officials are looking into tax and other fiscal measures to cool the market for second homes and properties for short-lets in popular holiday hotspots across the UK.

The initiative was revealed by Steve Double, Conservative MP for one of the areas affected, St Austell and Newquay in Cornwall, during a debate to introduce an amendment tabled by Tim Farron to a procedural piece of legislation brought in to confirm former Chancellor Kwasi Karteng’s stamp duty changes revealed in his otherwise disastrous mini budget.

Farron is MP for Westmorland and Lonsdale in the Lake District, an area struggling with its popularity as a tourist destination.

Double said he had been assured last week by Edward Argar, the Chief Secretary to the Treasury appointed that “the Treasury was looking at this issue”.

‘This issue’ is that, other than a 3% stamp duty surcharge and, in some areas, higher council tax bills, landlords and second home buyers have free reign to buy properties in rural and coastal holiday hotspots.

As LandlordZONE has reported before, Farron has been vocal inside and outside parliament to do something about local being squeezed out by properties being sold to Airbnb operators and outsiders buying holiday homes.

Rishi’s error

During this debate he said: “The former Chancellor and soon-to-be new Prime Minister — I congratulate him — my constituency neighbour, Rishi Sunak made an error at the beginning of the pandemic when he created the temporary stamp duty holiday.

“The immediate result was that in the first few months of the pandemic 80% of all house sales in my constituency, and in communities like it, were in the second home market.

“I hope and assume that was not the intention of the former Chancellor and soon-to-be Prime Minister, but that was the consequence.”

His amendment, which would have created a separate set of stamp duty rules for second homes and short-let properties, was defeated.

But as Richard Fuller, the Economic Secretary to the Treasury, said during the debate, the Government is keen to do something to stop holiday hotspots in effect becoming inaccessible and unaffordable for locals.

Read the debate in full.

View Full Article: MP says Treasury ‘looking into’ measures to cool market for Airbnb properties

How we sold half our rental properties without paying CGT

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18 months ago my family and I relocated to our dream home in the Algarve, Southern Portugal. This had nothing to do with tax, it was always our plan because we are passionate golfers.

We first engaged Property118 to calculate our new base cost for Capital Gains Tax calculation purposes.

View Full Article: How we sold half our rental properties without paying CGT