With energy prices soaring, rents rising and tenants feeling the pinch, a property’s energy efficiency has become so important that it can affect the rental value and desirability of a property.
The government has set ambitious targets that will require landlords to improve the energy ratings of their rental homes in the near future… so what can Bath landlords do to get ahead of these incoming regulations? What makes a good and bad EPC? And what can landlords do to improve their properties?
We have assembled a panel of expert speakers to discuss this hot topic at our second Bath Landlord Forum event. There will be a chance to put your questions to the panel and speak with fellow landlords.
We have the following speakers:
Oliver Meyer, of Meyer Energy, is a government-approved and accredited Domestic Energy Assessor operating in Bath. He will explain how property EPCs are compiled, and what constitutes a good or bad EPC.
Sonia Pruzinsky, of the Centre for Sustainable Energy, will discuss the options and funding available to landlords who wish to increase the energy efficiency of their property.
Toby Martin, of Reside Bath & ARLA Propertymark, will summarise current and upcoming EPC regulations, and other recent changes to landlord legislation.
We want to help Bath landlords to stay compliant with ever-changing lettings legislation, and provide support to make the most of your property investments.
So join us at The Francis Hotel, Queen Square on Wednesday 15th March 2023 from 18:00.
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 start of October has brought no fewer than three changes to regulations affecting landlords. Here’s Toby with everything you need to know.
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.
According to some newspapers and pundits, the property market boom could soon be over with the increasing interest rates and inflation.
In this article, I share the 3 fundamental economic reasons why things are different to the last property market crash.
The insider’s way to find out if there will be a property crash.
…and 4 reasons why buy-to-let landlords are coming back into the Bath rental market to protect their wealth and hedge against inflation.
With inflation and the cost-of-living crisis, some say this could cause property values to drop, by between 10% and 20% in the next 12 to 18 months.
There can be no doubt that the current Bath property market is very interesting.
At the time of writing, there are only 334 properties for sale in Bath (the long-term 15-year average is between 870 and 900), meaning house prices have gone up considerably.
According to the Land Registry…
Bath property prices have increased by 14.5%(or £53,100) in the last 12 months.
So, as Robert Kiyosaki says, ‘the best way to predict the future is to look to the past’. I need to look at what caused the last property crash in 2008 and how that compares to today.
Increase in Interest Rates
One reason mentioned as a possible cause of a crash is the rise in the Bank of England interest rates affecting homeowners’ mortgages.
Higher mortgage rates mean homeowners will have to pay a lot more on their mortgage payments, leaving less for other household essentials. In 2007 (and the 1989 property crash), many Bathonians put their houses up for sale to downsize to try and reduce their mortgage payments.
Yet the newspapers fail to mention that 79% of British people with a mortgage have it on a fixed interest rate (at an average mortgage rate of 2.03%).
Also, just under 19 out of 20 (93.2%) of all UK house purchases in 2021 fixed their mortgage rate.
So, in the short to medium-term (two to five years), most homeowners won’t see a rise in mortgage payments for many years. Also, 27.8% of all UK house purchases were 100% cash (i.e. no mortgage).
Of the 932,577 house purchases registered since February 2021 in the UK, 259,205 were bought without a mortgage.
Yet some people say it will be a problem when all these homeowners come off their fixed rate. The mortgage lending rules changed in 2014, and every person taking out a mortgage would have been assessed at application as to whether they could afford their mortgage payments at mortgage rates of 5% to 6% rates, not the 2% to 3% they may well be paying now.
No pundit says the Bank of England interest rates will go above 2% with a worst-case scenario of 3%. If the Bank of England did raise interest rates to 3%, homeowners would only be paying 4.5% to 5.5% on their mortgages and thus well within the stress test range made at the time of their mortgage application.
This means the probability of a mass sell-off of Bath properties or Bath repossessions because of interest rate rises (both of which cause house prices to drop) is much lower.
House Price / Salary Ratio
Another reason being bandied about by some people for another house price crash is the ratio of average house prices compared to average wages.
The higher the ratio, the less affordable property is. In 2000, the UK average house price to average salary ratio was 5.30 (i.e. the average UK house was 5.3 times more than the average UK salary). At its peak just before the last property crash in 2008, the ratio reached 8.64.
The ratio now is 8.85, so some commentators are beginning to think we’re in line for another house price crash. However, I must disagree with them because mortgage rates are much lower today than in 2007. For example…
The average 5-year fixed-rate mortgage in 2007 was 6.19% (just before the property crash), yet today it’s only 1.79%.
So, whilst the house price/salary ratio is the same as the last property crash in 2008, mortgages today are proportionally 71.1% cheaper.
Banks’ Reckless Lending
Another reason for a property crash in 2008 was the reckless lending practices in the run-up to that crash.
The first example of reckless lending was self-certified mortgages. A self-certified mortgage is when the lender doesn’t require proof of income.
In 2007, 24.6% of new mortgages were self-certified mortgages.
So, when the economy got a little sticky in 2008, the people that didn’t have the income they said they had to pay for their mortgages (because they were self-certified) promptly put their properties on the market.
The banks’ second aspect of reckless lending was how much they lent buyers to buy their homes. Today, banks want first-time buyers to have at least a 10% deposit and ideally more. There are 95% mortgages available now (meaning the first-time buyer only requires a 5% deposit), yet they are pretty challenging to obtain.
Back in 2005/6/7, Northern Rock was allowing first-time buyers to borrow 125% of the value of their home. Yes, first-time buyers got 25% cashback on their mortgage!
In 2007, 9.5% of all mortgages were 95%, and 6.1% of mortgages were 100% to 125%.
Meaning that nearly 1 in 6 mortgages (15.6%) taken out in 2007 had a 95% to 125% mortgage.
When the value of a property goes below what is owed on the mortgage, this is called negative equity. A lot of Bath homeowners with negative equity (or who were getting close to negative equity) in 2008 panicked because of the Credit Crunch and put their houses up for sale.
To give you an idea of what happened last year (2021) regarding mortgage lending, only 2.4% of mortgages were 95%, and 0.2% of mortgages were 100%. This is because the mortgage lending rules were tightened in 2014.
So why did Bath house prices drop in 2008?
Well, in a nutshell, a lot more Bath properties came onto the market at the same time in 2008, flooding the Bath property market with properties to sell.
Meanwhile, mortgages became a lot harder to obtain (because it was the Credit Crunch), so we had reduced demand for Bath property.
Prices will drop when we have an oversupply and reduced demand for something. Bath property prices fell by between 16% and 19% (depending on the property type) between January 2008 and May 2008.
So, what were the numbers of properties for sale in Bath during the last housing market crash?
There were 867 properties for sale in Bath in the summer of 2007 (just before the crash), whilst a year later, when the Credit Crunch hit, that had jumped to 1,708.
This vast jump in supply and the reduction in demand caused Bath house prices to drop in 2008.
Compared with today, there are only 334 properties for sale in Bath, whilst the long term 15-year average is between 870 and 900 properties for sale.
So, what is going to happen to the Bath property market?
The Bath house price explosion since we came out of Lockdown 1 has been caused by a shortage of Bath homes for sale (as mentioned above) and increased demand from buyers (the opposite of 2008).
However, while there are early signs the discrepancy of supply and demand for Bath properties is starting to ease, this takes a while before it has any effect on the property market – so it will be some time before it takes effect.
This will mean buyer demand will ease off whilst the number of properties to buy (i.e. supply) increases. This should gradually bring the Bath property market back in line with long-term levels, rather than the housing market crash.
My advice is to keep an eye on the number of properties for sale in Bath at any one time and only start to worry if it goes beyond the long-term average mentioned above.
But before I go, I need to chat about what inflation and the cost of living will do to the Bath property market.
How will inflation and cost of living affect the Bath property market?
There is no doubt that cost-of-living increases will have a dampening effect on buyer demand. If people have less money, they won’t be able to afford such high mortgages. This will slow Bath house price growth, especially with Bath first-time buyers.
Yet, the reduction in first-time buyers is being balanced out by an increase in landlords’ buying, especially at the lower end of the market.
This, in turn, will stabilise the middle to upper Bath property market. This means the values of such properties (mainly Bath owner-occupiers) will see greater stability and a buyer for their home, should they wish to take the next step on the property ladder.
So why are more Bath landlords looking to extend their buy-to-let portfolios, even in these economic circumstances?
I see new and existing buy-to-let Bath landlords come back into the market to add rental properties to their portfolios. As the competition with first-time buyers is not so great, they’re not being outbid as much.
Yet, more importantly, residential property is a good hedge against inflation.
Firstly, in the medium term, property values tend to keep up with inflation.
Secondly, inflation benefits both landlords and existing homeowners, with the effect of inflation on mortgage debt. As Bath house prices rise over time, it reduces the loan to value percentage of your mortgage debt and increases your equity. When the landlord/homeowner comes to re-mortgage in the future, they will receive a lower interest rate.
Thirdly, as the equity in your Bath property increases, your fixed-rate mortgage payments stay the same.
Finally, inflation also helps Bath buy-to-let landlords. This is because rents tend to increase with inflation. So as rents go up, your fixed-rate buy-to-let mortgage payments stay the same, creating the prospect of more significant profit from your buy-to-let investment.
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.
Bath needs 369 additional private rented properties per year to keep up with current and future demand from Bath tenants.
Yet over the last 5 years, Bath has lost 617 private rented homes.
What are the 5 reasons the supply of private rental properties in Bath are falling? What does this mean for tenants and landlords in Bath?
There has been a rise in demand for rental properties and an 8.9% fall in the number of private rented properties in Bath, which has caused Bath rents to rise by 8.8% in the last year – a new all-time high.
The National Residential Landlords Association asked the respected economics think tank, Capital Economics, to carry out research on the UK rental market. It found that demand for homes in the private rented sector needs to increase by 227,000 homes per year if the current trends in the property market continue (growth of the population, Brits living longer, the lack of new homes building and the reduction in social housing).
So, based on those numbers, Bath needs to have an additional 369 private rented properties per year.
The problem is the number of private rented properties in Bath has reduced from 11,553 in 2017 to 10,936 in 2021, a net loss of 617.
So, why has supply of private rented homes in Bath reduced?
1. Section 24 Income Tax
Section 24 was introduced in 2017 to level the playing field on the taxation of property between homeowners and landlords. Section 24 stops landlords from offsetting their buy-to-let mortgage costs against the profits from their rental property. Interestingly, no other kind of UK business is affected by the Section 24 taxation. In other words, whatever other form of business you might be in, be it butcher, baker or candlestick maker, every other business can offset their finance costs against their profits, except buy-to-let.
The issue caused by Section 24 Tax is that some landlords ended up paying more income tax than they really made in profit after paying their buy-to-let mortgages. Meaning on the back of rising house prices in the last five years, some Bath landlords have sold their buy-to-let investments.
2. 3% More Stamp Duty for Landlords
When someone buys a property, they normally must pay a tax to the Government for the privilege. This tax is called Stamp Duty. Yet landlords must pay an additional 3% stamp duty supplement on top of that when they purchase a buy-to-let property. Evidence suggests some Bath landlords have decided to hold off or scale back buying additional buy-to-let properties for their portfolio because of the thousands of extra pounds that landlords have to pay to buy the rental property.
3. Holiday and AirBnB Lets
Some Bath landlords are converting their long-term rental properties into short-term furnished holiday and AirBnB properties. Whilst the hassle, stress and service levels are much higher, these types of properties do tend to make more money and aren’t as heavily taxed as normal lets. When properties convert to short-term lets, it removes another property out of the general supply chain of long-term rental properties.
4. Greater Legislation for Rental Properties
With more than 170 pieces of legalisation, and new laws being added each year, the burden on landlords is huge. On the horizon is the Renters Reform Bill which will remove no fault evictions. Also, all rental properties with an Energy Performance Certificate (EPC) rating of below a ‘C’ will have to be improved (i.e. money spent on them) by the landlord. Hence why some landlords have been selling their rental properties with low EPC ratings in the last 18 months.
5. Accidental Landlords Selling Up
There are some Bath landlords who are classed as ‘Accidental Landlords’. In 2008/9, with a slowing property market and house price values dropping in the order of 16% to 19% (depending on the type of property), some Bath homeowners decided to let their home out as opposed to selling it at a loss. But with the price booms of the last 18 months, many decided to cash in on the higher property prices and sell – again taking another private rental property out of the system.
So, why is demand of private rented homes in Bath increasing, even though more people own their home in Bath than 5 years ago?
Even with better provision of affordable social housing and higher rates of owner occupation in Bath (rising from 56.22% of homes in Bath being owner occupied in 2017 to 58.28% in 2021), demand for private rental property continues to outstrip supply.
There are many reasons behind this including …
Bath has proven to be a popular destination for the high volume of renters who decided to leave London during the pandemic.
People are living longer, meaning not so many properties are coming back into the mix to be recycled for the younger generation.
Net migration to the UK has continued at just over a quarter of a million people a year since 2017, meaning we need an additional 115,000 households to house them alone.
For the last two years, one in six of the owners of properties that have been sold have moved in to rented accommodation instead of buying on because of the lack of properties to buy.
So, what is the outcome of the imbalance between supply and demand on Bath rental properties?
Quite simply – Bath rents have rocketed. They are 8.8% higher today than the spring of 2020 … and that’s on the back of rents being 9.7% higher in spring 2020, compared to spring 2019.
The severe shortage of housing in the private rented sector is pushing up rents in Bath as demand continues to grow. Many Bath people are finding it hard work to find appropriate accommodation at a reasonable rent, and with mounting numbers of tenants predicted to continue, this situation will only get worse unless more houses are built.
My heart goes out to those Bath tenants struggling with the cost-of-living crisis only to then be hit by higher rents.
Yet, these higher rents are now enticing new landlords back into the Bath buy-to-let market because of the higher returns.
With higher inflation, property investment has often been seen as a safe harbour to invest one’s money in. With the bonus of rising yields (because of the increase in rents) together with the nervousness of the Bank of England to increase interest rates too much because of the issues in Eastern Europe, this could be the start of a second renaissance in the Bath buy-to-let market.
If you have concerns about the issues in legislation and taxation, then the advantage of employing a qualified letting agent, with the choice of property, what you pay for it and how it’s managed, will go a long way to mitigate them.
If you would like to discuss any aspect of this article, you’re very welcome to drop me a message or call me.
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.
Everything you need to know about the Bath rental market in April 2022.
Reside General Manager Toby Martin summarises rental activity over the last month, with the latest facts and figures from the local 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.
Everything you need to know about the Bath rental market in March 2022.
Reside General Manager Toby Martin summarises rental activity over the last month, with the latest facts and figures from the local 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.
The UK is currently experiencing its highest inflation rate since the early 1990s. This increase in prices has primarily come about by the combination of an increase in demand for goods and services from consumers following lockdown last year together with global supply chain disruptions.
Most economists weren’t too concerned about this increase in the inflation rate as the very same thing happened in the early 1990s following the Credit Crunch with a similar rise in demand and supply chain issues. Thankfully, back in the early 1990s, inflation returned to lower levels quite quickly. However, the situation in Eastern Europe now could change matters.
So, let’s look at all the factors and what it means for the Bath property market.
The crisis in Eastern Europe has sparked even further rises in crude oil (which diesel and petrol are made from), gas and grain prices as pressure on supply chains around the world increases.
In my previous articles, I suggested UK inflation would rise to around 7% in the spring and drop back to 5% in the autumn and as we entered 2023, be approximately 3% to 4%.
Yet, with these issues, inflation could rise to 8% to 9% by late spring and still be around 6% to 7% in autumn, well above the Bank of England’s target of 2%.
With Bath wages rising at only 3% to 4% and inflation at 7%+,Bath household incomes, in real terms, will fall.
This is because ‘real’ UK household incomes characteristically have been the most consistent lead indicator of growth (or a drop) in house prices. This is because growing inflation erodes the value of money you earn, which reduces its buying power. When the cash in your pocket has a lower spending power, people tend to spend less when they buy or rent a home (and vice versa).
Next month, Income Tax thresholds will be frozen, and National Insurance contributions are increasing. Collectively, all these issues will create a drop of around 2% to 2.5% in the real disposable income of Britain’s households in 2022 (real disposable income – i.e. somebody’s take-home wages after tax and the effects of inflation are considered).
Will Bathonians be more anxious about spending their money?
With less money in people’s pockets, their inclination to spend the money they do have could also be curtailed. Whilst savings are at an all-time high, many will decide to sit on the cash instead of spending it, especially as consumer confidence has dropped to minus 26 on the GfK index (whatever that means! But in all seriousness… more on that below).
All this can only mean… there is going to be a house price crash.
It’s all doom and gloom! …or is it?
My heart goes out to people caught up in the awful humanitarian crisis in Eastern Europe. For the purposes of this article, however, I need to respectfully put that to one side for just a moment.
This blog is about the Bath property market, and Bathonians want to know what will happen to the Bath property market.
In the first half of the article, I looked at the impending 2 to 2.5% fall in real disposable incomes during 2022. I appreciate it’s going to be tough for many families in Bath. Yet, it is always important to consider what has happened in times gone by:
1982 – a drop of 2.3% in real disposable income 1992 – a drop of 3.7% in real disposable income 2008 – a drop of 5.8% in real disposable income
Yes, it’s going to be tough, but we got through 1982, 1992 and 2008 – and so we shall in 2022/23.
Next: the price of petrol is very high compared to a year ago.
The average price of unleaded petrol is £1.51/litre today, quite a jump from the £1.21/litre a year ago. But here is an interesting fact, petrol was a lot more expensive (in real terms) in 2011 than today. In TODAY’s money, a litre of unleaded petrol in 2011 would be the equivalent of £1.79/litre. We have some way to go before we get to those levels – and again, the Bath economy (and property market) kicked on quite nicely after 2011.
What are Bath people spendingon their rent and mortgages?
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In 2015, owner occupiers were spending on average 17.3% of their household income on mortgages, yet in 2021 this had risen, albeit to 17.7% – not a huge increase.
Council (social) tenants have seen a drop in their rent from 29.2% of their household income in 2015 to 26.7% in 2021, whilst for private tenants it has dropped from from 36.4% in 2015 to 31.2% in 2021.
Interestingly, private tenants are proportionally 14.29% better off in 2021 than in 2015.
The average UK home spent 4.2% of their household income on energy in 2021, and that is due to rise to 6.3% after April (and probably 7% in October). Yet, as a country, we spend 9% of our income on restaurants and hotels and 8% on recreation and culture. As with all aspects of life, it will mean choices, and maybe we will have to forego some luxuries.
Just before I move on from this aspect of the article, again I appreciate I am talking in averages. Many people with low incomes suffer from fuel poverty and they will find the increases in energy prices hard.
Higher inflation is generally brought under control using higher interest rates, meaning mortgage payments will be higher.
79% of homeowners with a mortgage are on a fixed rate, so any rise won’t be instantaneous. But there will be a bizarre side effect from the issues in Eastern Europe. Surprisingly, though the current situation in Eastern Europe by its very nature will bring greater UK inflation, it will also probably defer the Bank of England raising interest rates. This means mortgage rates won’t increase as much, as the bank won’t want to exacerbate any pressures to the UK economy in 2023/24 caused by the conflict.
The stock market had priced an interest rate rise to 2% by the end of 2022. I suspect this will now be no more than 1% to 1.25% by Christmas, slowly going up in quarters of one per cent every few months. The crisis in Eastern Europe might even come to be seen as a defence for higher inflation throughout 2022, all meaning everyone’s mortgage increases will be marginal for now.
Next, let’s look at Consumer Confidence Indexes – these indexes are fickle things. I prefer to look at the Organisation for Economic Co-operation and Development Consumer Confidence Index as it has a larger sample range and a longer time frame to compare against. Looking at the data from the mid 1970s, the drop in consumer confidence is big, yet nothing like the drops seen in the Oil Crisis of the mid 1970s, Recession of the early 1980s, ERM crisis of 1992 and the Global Financial Crisis of 2008/09. Also, when compared to the other main economies of the world (G7), the UK has always bounced back much more quickly from recessions when it comes to consumer confidence.
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What about house prices in Bath in 2022/23?
Increasing energy prices, rising inflation, an increase of sanctions, and a probable drop in consumer confidence and spending in the aftermath of the conflict will knock the post-pandemic recovery globally, which will lead to a recession around the world, including the UK.
A recession is when a country’s GDP drops in two consecutive quarters. For the last 300 years, there has been a direct link between British house prices and GDP (i.e. when GDP drops, UK house prices fall). Yet in 2020, the British GDP dropped by nearly 12%, but house prices went the other way.
Let’s look at what would happen if Bath house prices did drop by the same extent they did in the Global Financial Crisis of 2008/09.
House prices in Bath dropped by 17.2% in the Global Financial Crisis, the biggest drop in house prices over 16 months ever recorded in the UK.
The average value of a property in Bath and North East Somerset today is £399,981.
Meaning that if Bath’s house prices dropped by the same percentage in the next 16 months, an average home locally would only be worth £331,184.
On the face of it, not good… until you realise that it would only take us back to Bath house prices being achieved in February 2020 – and nobody was complaining about those.
Yes, that means if they do drop in price, the 5.7% of Bath homeowners who moved home since February 2020 would lose out if they sold after that price crash. But how many people move home after only being in their home for a few years? Not many!
The simple fact is that 94.3% of Bath homeowners will still be better off when they move if house prices crash.
And all this assumes there will be a crash.
The circumstances of 2009 that caused the property crash are entirely different to 2022 (no lending by the banks, higher interest rates and increasing unemployment compared to today’s increased lending, ultra-low interest rates and low unemployment).
I do believe with all that’s happening in the world we might see a rebalancing of the Bath property market later in 2022, and could see the odd month with little negative growth in house prices… But it will be nothing like 2009.
The expected fall in household spending could be counterbalanced by UK businesses’ plans to invest more in their businesses (with last year’s tax breaks on investing), which will create even more jobs.
Who knows what the future holds? These are just my opinions – what are yours?
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.
Those who tuned into the Queen’s Speech on the 11th of May can be forgiven for missing the very brief promise to ‘enhance the rights of those who rent’ – seemingly a very general pledge to review standards across the sector. A delve into the detailed briefing notes, however, reveals three details that will be of particular interest to landlords and tenants.
Abolish Section 21 Evictions
Long before the pandemic interrupted their plans, the government promised to abolish Section 21, or ‘no-fault’, evictions. This is the most straightforward and common way for a landlord to end a tenancy at their property, but its future is now back up for review. The government plans to publish a White Paper in the autumn which will detail plans to reform the evictions process.
Lifetime Deposits
Another long-running government scheme is the introduction of lifetime tenancy deposits, which would see dilapidation deposits move from property to property with the tenant. Under the current system, a tenant must pay a brand new deposit when moving to a new property, which can often cause cashflow issues for the tenant if they are still waiting for their deposit to be returned by their previous landlord.
It remains to be seen how the government’s scheme will offer simultaneous protection to two landlords where there is an overlap in tenancies. Again, more information has been promised in the autumn.
Redress Schemes for Private Landlords
One of the more unexpected announcements was the plan to require all private landlords to belong to a redress scheme, ‘to ensure that all tenants have a right to redress’.
Currently agents, rather than landlords, are required to belong to a redress scheme, such as the Property Redress Scheme, with which Reside are affiliated. If a tenant rents directly from a private landlord, with no agency involvement, their only current source of redress is through the courts. It is therefore likely that this new initiative is aimed at landlords who do not use a professional agency to manage their tenancy.
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.
