A new landlord licence for buy-to-let investors in Bristol will cost £1,200, as part of the City Council’s plans to improve living standards for private tenants.
Bristol City Council has decided to impose the fee after finding many rental homes in the area in disrepair or unsafe.
One in five of the properties surveyed by the Council had hazards that were deemed an immediate risk to the health and safety of tenants, according to an independent survey.
Cabinet Member Paul Smith claims that it would cost Bristol City Council in the region of £1m per year to inspect around 6,000 private rental homes.
He says: “We know from experience that licensing is a good way to deal with issues of poor standards of accommodation and inefficient property management.
“As the private rented sector continues to grow, it is vital that we continue to take steps to help protect vulnerable tenants and ensure that everyone in the city has access to decent housing.”
The licence, which will require landlords to meet a series of requirements, will last for five years. It will apply to Houses in Multiple Occupation (HMOs) in 12 different areas across Bristol: Ashley, Bishopston and Ashley Down, Central, Clifton, Clifton Down, Cotham, Easton, Hotwells and Harbourside, Lawrence Hill, Redland, Southville and Windmill Hill.
Local landlords, however, are opposed to the new scheme.
Rob Crawford, the Chair of the Association of Local Landlords in Wessex, comments: “We are aware there are landlords who are not as good as others, and do need some help and education in providing the appropriate standard of accommodation. But why should good landlords be charged to address those issues from rogue landlords?”
Do you own rental properties in Bristol? If so, you must be compliant with the new landlord licence requirement.
Landlords who fail to comply could be charged thousands of pounds in fines.
It has never been more important to ensure that all parties involved in a private tenancy have the protection of independent inventory reporting.
Indeed, this month, the Government and the Tenancy Deposit Scheme (TDS) have released guidance around inventory reporting.
The Government’s Ministry for Housing, Communities and Local Government has published the following statement for landlords: “If the property is not left in a fit condition, you can recover the costs associated with returning the property to its original condition and/or carrying out necessary repairs by claiming against the tenancy deposit.
“You should justify your costs by providing suitable evidence (e.g. an independently produced inventory, receipts and invoices).”
It advises that it is preferable for an independent party to undertake check-in and check-out reports.
Independent inventory reporting is now critical for both landlords and tenants, to make sure that they are protected prior to the check-in and check-out of a tenancy. This way, there can be no error in how the tenancy started and ended, and where any issues or liabilities lie.
David Cox, the CEO of Propertymark, insists: “The sector must not underestimate the importance of a thorough inventory.”
However, Daniel Zane, the Chair of the Association of Independent Inventory Clerks (AIIC), warns that caution must be taken, as not all inventories are there to protect both parties. The landlord, agent or tenant can still legally compile reports and, as yet, no one has to state if there is a connection to the property via the party that has completed the report.Zane advises tenants, landlords and agents to “look out for the AIIC logo or use our safe clerk listing to find a suitable inventory clerk that has no interest in the property, owner or tenant. Our clerks offer the level of protection most would assume a detailed inventory report offers”.
The UK housing market recorded a spring spike in March, according to the latest Property Activity Index from Agency Express.
Nationally, the number of properties sold increased by 16.9% between February and March, while the amount of new property listings rose by 15.3%. Looking back at Agency Express’ historical records, March’s spike is greater than that recorded in the same period of 2018.
The upward trend was evident across all 12 regions included in the index in March, with all reporting increases in new property listings and the number of properties sold.
Scotland sat at the top of the leaderboard in March, with record best increases for the month. New property listings rose by a solid 41.8%, while the amount of properties sold was up by 32.4%.
The North East followed suit, with record best growth for the number of properties sold, at 35.3%, and new property listings, at 22.1%.
Other regional hotspots included:
New property listings
West Midlands: +25.2%
London: +21.8%
Central England: +15.8%
Wales: +15.3%
South East: +14.2%
East Midlands: +11.6%
East Anglia: +11.1%
Properties sold
West Midlands: +24.8%
Wales: +21.6%
East Anglia: +21.1%
London: +16.5%
East Midlands: +13.5%
South East: +13.5%
The smallest increases recorded in March’s Property Activity Index were seen in Yorkshire and the Humber. Following a robust start to the year, activity in the region has now begun to plateau, with the number of new property listings up by just 5.5%, while the amount of properties sold rose by 10.6%. Over a three-month rolling period, new listings increased by 29.3%, with the number of properties sold up by 21.7%.
Stephen Watson, the Managing Director of Agency Express, comments: “The figures from this month’s Property Activity Index have shown some promising increases across the UK, and our yearly figures are up. As we move into April, we’d expect a seasonal dip, then an increase again in May.”
If you want to let to young people, then it’s important that you understand where they want to live. In order to invest in property in the right locations, you should be looking at areas with increasing populations for the age range that you’d like to let to.
An increasing population of young people is a sign of a thriving city. And it’s good news for Coventry, which has just been named the top UK housing hotspot for 18-34-year-olds by Good Move.
The regulated property buyer used data from the Office for National Statistics (ONS), to reveal the locations that are experiencing the greatest influx of young people.
Coventry came out on top, with 18-34-year-olds representing 32% of the city’s population – a 3.65% increase from 2012, which is unrivalled across the UK. Such popularity can be attributed to its low house and rent prices, which are considerably lower than national averages. The Warwickshire hotspot also boasts excellent broadband speeds and 4G coverage, making it an attractive option for young people.
Bath and Somerset (2.72%), and Exeter (2.40%) followed in the rankings. The low unemployment rates in these regions (3.2% for Bath and Somerset, and 2.9% for Exeter) add to their appeal, with both lower than the national average (3.93%).
Top 10 hotspots for young people
These locations experienced the greatest relative increases in their populations of 18-34-year-olds since 2012:
Coventry: 3.65%
Bath and Somerset: 2.72%
Exeter: 2.40%
Canterbury: 2.24%
West Lancashire: 2.04%
Runnymede: 1.97%
Guildford: 1.79%
Newcastle-under-Lyme: 1.74%
Bristol: 1.69%
Welwyn Hatfield: 1.61%
The research also gives an indication of where these young people are moving from, by identifying the locations that have seen a decrease in their populations of 18-34-year-olds over the same period.
Surprisingly, it’s London that is losing its young people at the greatest rate. Out of the top ten local authorities that have seen their percentage of 18-34-year-olds decline the most, nine are London boroughs, while the other, Slough, is just 20 miles from the capital.
Hammersmith & Fulham experienced the highest rate of departures, with 18-34-year-olds now constituting just 31% of its population – a 5.39% drop since 2012.
However, the trend extends across the whole of the capital, with just two of the 33 boroughs seeing increases – and even these were minor (0.55% in Havering and 0.34% in Islington).
On average, each London borough has 2,000 fewer young people than seven years ago – a decrease of 2.75%. The soaring house prices of the capital are an obvious explanation, as, at over an average of £540,000, they’re more than double the average for the rest of the country (£258,270).
Ross Counsell, the Director of Good Move, comments: “Young people bring money, innovation and life to a city, and our research has highlighted the places currently benefitting from their interest.”
Letting and estate agent Belvoir predicts that rent prices will rise at a faster rate in the second half (H2) of 2019, according to its latest rental index.
The Belvoir rental index for the fourth quarter (Q4) of 2018, prepared and analysed by property expert Kate Faulkner, shows significant regional variations in rent prices, with a slightly average decrease of 1.25%.
However, the agent expects rents to increase at a faster rate in H2 2019.
The CEO of Belvoir, Dorian Gonsalves, explains: “Belvoir’s rental index tracks advertised rents, and the Q4 index revealed that there was an average year-on-year decrease of 1.25%, which equates to £1 per month, compared to the 2017 annual average.
“We have consistently reported that rents are only able to rise if wages increase higher than inflation, and rents cannot rise purely because of any increases in landlord costs. However, the Q4 rental index confirms a significant variation in rents from region to region, and, where rents are able to rise, they are doing so.”
He looks at the figures: “Average monthly rents in Q4 ranged from £605 in the North West, £662 in the East Midlands, £733 in the South West, through to £1,033 in the South East and £1,328 in London. Interestingly, we are also seeing a dramatic variation in rents within London – from £1,199 in Uxbridge up to £1,542 in Kingston upon Thames. It is therefore quite challenging to secure a year-on-year trend for this region, but, overall, average Q4 rents remained static, due to falling affordability buffers.
“Analysis of property types confirmed that 60-70% of rents for flats and two to three-bedroom houses remained fairly static, but with four to five-bed houses – where we have seen a stock shortage, higher demand, and tenants with slightly more money to spare – rents have increased.”
Gonsalves assesses the market: “Looking at tenant trends, we found that tenants are remaining longer in properties, with a slight increase in the proportion of tenants renting 13-18 months and over two years, when compared to Q3. 64% of offices carried out no evictions in Q4 (an increase from 54% in Q3) and half of Belvoir’s offices reported less than three tenants in arrears. Those tenants who do fall into arrears are much more likely to do so because of sickness or job losses, rather than an inability to pay due to rental increases.
“Our analysis of landlord trends in Q4 revealed a similar number of landlords selling up to three properties compared to Q3, and a decrease from 28% to 23% for landlords selling four to five properties. The main reasons for landlord sales are tax changes, constant regulation and legislative changes resulting in less returns, and some landlords choosing to release capital or move back into properties themselves. The number of landlords buying properties continues to fall (32.3% bought in Q4 compared to 37.9% in Q3), which has added to stock shortages.”
He gives his thoughts on how Brexit uncertainty is affecting the housing market: “Historically, during times of political uncertainty, as is being currently experienced, Belvoir offices have observed a rise in the numbers of families renting properties, as they wait to see the impact on the market and their personal situation. In recent years, there has also been a shift in the corporate relocation market, with employees opting to rent out their existing property instead of selling, and then renting a house in the new area. This has resulted in less rental houses coming onto the market, with increased demand for those properties that are available.
“As political uncertainty continues, it will be interesting to see how the private rental sector will be affected throughout the rest of 2019. After a relatively flat period of rental inflation, we are predicting that rents will begin to increase at a faster rate in the second half of the year, as landlords and tenants begin to feel the effects of increased costs, which are a direct result of the tenant fee ban.”
The Mayor of London, Sadiq Khan, has pledged £200m to protect affordable housebuilding in the capital throughout the continued Brexit uncertainty.
The continuing Brexit negotiations are already affecting the housing market, with falling sales and uncertainty over house prices. This is having a knock-on effect on housing associations, which currently receive low levels of funding from the Government and, therefore, rely heavily on income from selling new market-price homes to help subsidise new affordable housebuilding.
Faced with a slowdown of new home sales, the Mayor will help housing associations, by offering extra funding to switch homes from market sale or shared ownership, to homes for rent at social or intermediate rent levels, which are lower than market rents. This extra funding will enable them to commit to their future plans, sign construction contracts and begin development without further delay.
Khan believes that the impact of Brexit uncertainty makes this extra funding essential, though he has warned that it will stretch City Hall’s affordable homes funding to its limit. The Mayor will explore all options for further funding, and is calling on the Government, at the very least, to match this funding, by providing extra investment for housing associations to deliver their planned schemes.
Khan says: “At City Hall, we are building record numbers of new social rented and other genuinely affordable homes. We must not let the Government’s chaotic mishandling of Brexit undermine our plans. That’s why it is right we push our funding to its very limits, to keep housing associations building more affordable housing through the ongoing uncertainty – and it’s even more important given the Government totally failed to address my concerns when I recently raised them. Whatever happens with Brexit, ministers must at the very least match my support, and ensure we can keep building the homes Londoners need over the coming years.”
The support received by individual housing associations will depend on the schemes and their pipeline, as well as those underway. Given the strains already on the Mayor’s affordable housebuilding budget, and the importance of targeting it effectively, this funding is only available for homes starting in this calendar year.
The Mayor’s investment comes after he wrote to the Secretary of State last month, along with Paul Hackett, the Chair of the G15 largest housing associations in London, and Councillor Darren Rodwell, the Executive Member for Housing and Planning at London Councils, outlining the immediate emergency support that would be required from the Government if the UK leaves the EU without a deal.
Helen Evans, the Chief Executive Officer of Network Homes and Vice-Chair of G15, comments: “The current market uncertainty limits our ability to generate cross-subsidy to reinvest in affordable homes, so this strong, positive action to address that is welcome. If enough additional funding is made available, we will be able to continue to commit to new developments and increase the levels of affordable homes we are building. We look forward to engaging with the GLA [Greater London Authority] to secure this.”
