Rishi Sunak’s budget holds little of interest for landlords, but a support scheme is announced for vulnerable tenants
For landlords, the most salient parts of the Autumn Budget were the omissions, rather than Rishi Sunak’s raft of announcements.
There was no mention of Capital Gains Tax, nor was there any review of stamp duty. This may come as a relief to landlords, many of whom had been expecting the Chancellor to announce increased property taxation and red tape.
This comes after months of lobbying by ARLA Propertymark and other organisations, who have long called for more financial support to be made available to tenants at risk of eviction as a result of the Covid pandemic.
“The £65m funding for those in rental debt provides some support but the devil is in the detail. Almost four million low-income households are in arrears with their household bills, yet this money will be targeted at those who are most at risk of homelessness, excluding a significant number of others from help.” ARLA Propertymark
Reside is an award-winning independent letting agent in Bath. Please get in touch if you would like to discuss any aspect of letting or managing your property; we would love to hear from you.
The latest in lettings, from Bath and beyond. This month: pets, notice periods and the Renters’ Reform Bill
Over the course of this year, we have firmly established that demand from tenants is comfortably exceeding property supply, with many tenants struggling to secure their property of choice. Reside’s vital statistics over the last month bear this out – average letting time of 3.5 days, achieving an average of 102% of the advertised rent, and agreeing more lets over the course of September than in any other month since the company’s inception.
At this time of year, we usually urge landlords to bring their property to the market as quickly as possible, to avoid the quiet winter market. Whilst that is still advisable, it is difficult to image demand dwindling during November and December, as there are still a great many home-hunters who have been unable to secure a property.
Supply is bound to reduce further between now and the end of the year, meaning that there will still be fierce competition for those properties that do come to the market.
Pet Deposit Peeve
The government has clarified that it will not revisit the deposit caps that were mandated by the Tenant Fees Act. Conservative MP and pets campaigner Andrew Rosindell has led calls for reforms that would make it easier for tenants with pets to secure properties, and the reintroduction of additional pet deposits was widely considered to be most practical way to achieve this.
Deposits are currently capped at 5 weeks’ rent, or 6 weeks’ for high rent properties. This has seen the majority of landlords adopt a more cautious approach to tenants with pets, due to concerns about additional damage being incurred and not adequately covered by the deposit.
Notice Periods Return to Normal
Notice periods finally returned to their pre-pandemic levels on the 1st of October, for the first time since March 2020. Landlords, who had previously been required to serve three, then six, then four months’ notice on their tenants under Section 21, are again able to serve two months’ notice to bring their tenancy to an end. Tenants, whose notice period remained unaffected throughout the pandemic, can serve one month’s notice to end a tenancy.
Reform In The Pipeline
This year’s Queen’s Speech put us on notice that a significant White Paper would be delivered by the government this Autumn, which will propose significant changes to the private rented sector. Whilst recent comments by Housing Minister Eddie Hughes from the Department of Levelling Up, Housing & Communities have suggested that these are still some weeks away, the minister did clarify that lifetime deposits and Section 21 are very much on the agenda.
We want to get this right. For example if we start from a position of ‘Landlords Bad/Tenants Good’ then the approach might be too stringent for landlords and they’ll be forced out of the market. We don’t want that.
Eddie Hughes MP
Lifetime deposits will allow a tenant to port a single deposit between tenancies, avoiding the need to pay a new deposit at the start of each new tenancy.
Section 21, also known as ‘no-fault evictions’ has long been in the crosshairs of the government, but it remains to be seen how the evictions system will be reformed.
Reside is an award-winning independent letting agent in Bath. Please get in touch if you would like to discuss any aspect of letting or managing your property; we would love to hear from you.
Reside General Manager Toby Martin brings you news of the rental market in August 2021.
As inevitable as an England batting collapse, August was yet again another busy month for the rental market. Recent trends of property supply being outweighed by tenant demand reached new heights, as competition for properties contributed to us letting more than 50% of our properties within 1 day during August.
Our overall average letting time was just 3.5 days which, in any other year, would be remarkable. In the current market, however, this only just represents our best month on the year so far.
Due to the overwhelming demand from tenants, the average rent achieved in August was 100% of the asking rent. In other words, every single property received an asking rent offer.
Another Legislation Change for Landlords
Towards the end of August, the government announced another change to legislation affecting landlords – there have now been around 50 since the start of the pandemic.
On this occasion, the announcement was a welcome one, extending digital Right to Rent checks until April 2022. Allowing these checks to be carried out digitally has been a great time saver for landlords and agents, and a permanent online system is hopefully in the pipeline.
Awards Season… Again!
Last year’s Bath Property Awards were delayed due to the pandemic, meaning that this year’s ceremony has come around quicker than ever. We were delighted to be named a finalists in the ‘Best Lettings Agent’ category, which we were honoured to win last year. For the first time, we have also been nominated in the ‘Best Employer’ category – if only there were a ‘Best Employees’ award, we would be a shoe-in for that one too!
Reside is an award-winning independent letting agent in Bath. Please get in touch if you would like to discuss any aspect of letting or managing your property; we would love to hear from you.
Reside General Manager Toby Martin rounds up rental market activity in July 2021.
A month of frenetic rental activity resulted in Reside’s busiest July since the company opened in 2008.
July 2020 had set a new high for lets agreed over the course of the month, but this year proved busier still.
New applicants registering for properties during July increased by a staggering 40% compared to July 2020 and was also up by 7.4% on June 2021, demonstrating significant levels of tenant demand.
What is most staggering is the speed with which available properties are being secured by tenants, in the knowledge that they are likely to lose out if they are slow to make an offer. It took, on average, just 7 days for Reside to agree a let during July, achieving an average of 100.4% of the advertised rent.
These figures serve to reinforce the recent trend of high tenant demand being underserved by a dearth of available property. With such competition for available properties, there have been few better times to bring a rental property to the market.
Reside is an award-winning independent letting agent in Bath. Please get in touch if you would like to discuss any aspect of letting or managing your property; we would love to hear from you.
Reside’s Toby Martin dives into the puzzling world of minimum energy standards in the private rental sector, and how they apply to Listed properties.
By law, any rental property must have an energy efficiency inspection carried out in order to place the property on the rental market. The energy efficiency of the property is graded between A and G, with A being the best rating. The property’s energy efficiency is summarised in a report called an Energy Performance Certificate (EPC), which must be included in the marketing particulars and provided to any prospective tenant.
A recent law, the Minimum Energy Efficiency Standards Regulations, was introduced to prevent landlords from renting out properties with an F or G energy rating without first carrying out the improvements suggested in the EPC to increase the overall rating. The intention is for the landlord to carry out any works necessary to raise the overall score to an E rating.
The government wants to raise the minimum energy efficiency standards to EPC Band C by 2025 for new tenancies in private rented homes, and by 2028 for all tenancies. However, this legislation is yet to be finalised.
Initially, it was thought that Listed properties were exempt from the requirement of even having an EPC due to the difficulty landlords would encounter when trying to improve the property. Listed buildings regulations restrict many of the improvements that are often suggested in EPCs, such as fitting double glazing windows.
However, recent clarification made it crystal clear that all properties, including those in Listed buildings, must obtain an EPC when going on the rental market. Listed properties, mainly due to their age and limitations on energy improvements, are more likely to receive low scores, but landlords of these properties should know that it is still possible to go to the rental market, even if it is impossible to increase the energy rating to the required E rating.
Landlords of low-scoring properties must carry out the recommended improvements to increase the energy efficiency of their property, but there are certain situations in which properties can be registered as exempt from these requirements. The most relevant of these exemptions are:
‘High cost’exemption: The prohibition on letting property below an EPC rating of E does not apply if the cost of making even the cheapest recommended improvement would exceed £3,500.
‘All improvements made’ exemption: Where all of the suggested energy efficiency improvements for the property have been made, or there are none that can be made, and the property remains sub-standard, an exemption from further improvements can be obtained and the property can be placed on the market.
‘Consent’ exemption: If third party consent is required to carry out a suggested improvement, for example from a freeholder or local authority, and that consent cannot be obtained, an exemption can be registered.
Despite the minimum energy standards regulations, any property can be brought to the rental market – you just need to know how to navigate the EPC maze.
Reside is an award-winning independent letting agent in Bath. Please get in touch if you would like to discuss any aspect of letting or managing your property; we would love to hear from you.
Reside General Manager Toby Martin rounds up rental market activity in June 2021.
Market Update
The rent trend of high tenant demand versus low property supply continued during June 2021. Competition for properties reached such heights that our average letting time between listing a property on the market and having an offer accepted by the landlord was just 3.45 days. The average rent agreed across those properties was 101.2% of the advertised rent.
The message from Reside is clear – if you are a landlord, there has probably never been a better time to bring your property to the rental market.
Landlords – are you compliant?
Whilst on the subject of interesting statistics, a recent article by property industry expert Paul Shamplina revealed last month that there have been no fewer than 47 changes to regulations affecting landlords during the Covid pandemic alone.
There’s been 47 changes to regulation and law in the UK during Covid and for the small portfolio landlords now everything has changed massively.
I believe it’s essential that they have a letting agent on their side albeit the correct agent by picking the right one, which is very important.
– Paul Shamplina
Meanwhile, new research by the National Residential Landlords Association puts the total number of laws with which landlords must comply at 168. In 2010, this figure stood at 118 – that is a 42% rise in 11 years. The rate at which regulations are changed has only accelerated over recent years, and more law changes will continue to come for the foreseeable future.
Without a professional, ARLA Propertymark qualified agent managing your property, it is very difficult for a landlord to be 100% confident that they have complied with all of their legal obligations.
Reside is an award-winning independent letting agent in Bath. Please get in touch if you would like to discuss any aspect of letting or managing your property; we would love to hear from you.
Reside’s Toby Martin explains why video tours have risen to prominence over the last 18 months.
When England went into its first national lockdown in March 2020, it prompted a significant change to our industry. For years, property agents have relied on glossy promotional photos and in-person viewings to sell or let properties, but our industry’s response to the Covid-19 pandemic has seen video technology become the most important piece of the property marketing jigsaw.
Shortly before that first lockdown, we rushed out to all of the properties we were marketing at the time and recorded walk-throughs using our iPhones. These were rudimentary, rather shaky videos – not very professional at all – but they proved to be highly effective. More than 50% of the properties let by Reside between March and September 2020 did not require an in-person viewing at the property. They were taken on the basis of the photographs, which remain very important, our floor plans and the video tour.
The most stress-free letting experience I have had. The video tour options meant we could stay safe during the whole process.
– Emily Goodyear, Google Review
Whilst our professional photographs allowed tenants to see a property at its finest and created the initial interest from the online listing, the video tour created an extra element of trust with the prospective tenant. An unedited, recently recorded video gives a true, trustworthy portrayal of the property in question, and allows the tenant to proceed with confidence without the need to visit the property in person.
A year down the line, we have worked hard to improve our videos by investing in more advanced video equipment. Our videos are now more professional and higher definition, but they retain the homemade quality that allows tenants to trust what they see on the screen. And, as we record them in-house, we don’t need to charge our landlords an extra penny.
Every property is now listed online with a full video tour, and they continue to allow overseas, isolating and infirm tenants, or just those who can’t get away from work, to experience the property from the comfort of their own home.
Reside is an award-winning independent letting agent in Bath. Please get in touch if you would like to discuss any aspect of letting or managing your property; we would love to hear from you.
Reside General Manager Toby Martin explains the impact of the government’s new debt relief initiative.
May was Mental Health Awareness Month, a very apt time for the government to launch the Debt Respite Scheme, also known as ‘Breathing Space’.
The purpose of the scheme is to provide a temporary period of respite from creditor action to help people in problem debt, for example a tenant in rent arrears, consider their options and engage with professional debt advice.
A Breathing Space moratorium will provide protections to those in problem debt by pausing enforcement action and freezing charges, fees and interest for up to 60 days. It is not a payment holiday and certain debts, including rent, are considered ‘ongoing liabilities’.
“Breathing Space will… encourage more people to seek advice, and when they do, there will be better protections in place to stop further harm and help recovery.”
Phil Andrew, CEO of StepChange Debt Charty
There is also an alternative way into the scheme for people receiving mental health crisis treatment. A mental health crisis moratorium has some stronger protections and lasts as long as a person’s mental health crisis treatment, plus 30 days.
A Breathing Space moratorium can only be accessed once every 12 months, but there is no limit to the number of times that an individual can enter a mental health crisis moratorium.
Anyone looking to start a Breathing Space must first seek advice from a debt service provider who is authorised by the FCA to offer debt counselling or a local authority. They will determine whether the individual qualifies for a Breathing Space and, if so, will contact any creditors to notify them of the moratorium.
Reside is an award-winning independent letting agent in Bath. Please get in touch if you would like to discuss any aspect of letting or managing your property; we would love to hear from you.
The government has announced that landlord notice periods will be reduced to four months, starting from the 1st of June 2021.
Under temporary legislation introduced in August 2020, notice periods were initially increased to three months, and more recently to six months, to provide tenants with greater security in their homes at the height of the pandemic.
Whilst the deadline to end these temporary measures has been pushed back several times, MHCLG has now confirmed that it will begin to taper notice periods, starting with a reduction to four months from the 1st of June. If the government’s Roadmap is successful, notice periods should return to their pre-pandemic levels by the 1st of October 2021.
Notice periods have presumably been tapered in this fashion for two reasons; firstly, so as not to dramatically remove this safety blanket from tenants, and secondly to discourage landlords who have already served their tenant with six months’ notice from re-serving a dramatically shorter notice.
“Subject to the public health advice and progress with the Roadmap, notice periods will return to pre-pandemic levels from 1 October. The measures will ensure renters continue to be protected with longer notice periods for the coming months, while allowing landlords to access justice – 45% of private landlords own just one property and are highly vulnerable to rent arrears.”
Housing Minister Chris Pincher
Notice periods for the most serious cases will remain lower, for example substantial rent arrears. If a tenant has accumulated more than four months’ arrears, they can be served four weeks’ notice to end the tenancy.
It was also announced that evictions will recommence on the 1st of June, meaning that bailiff action can again be enacted. However, there still remains a lengthy backlog of possession claims caused by the court closures in 2020, so landlords will have to show patience as their claims progress towards the eviction stage.
Reside is an award-winning independent letting agent in Bath. Please get in touch if you would like to discuss any aspect of letting or managing your property; we would love to hear from you.
