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Landlord Charges Increasing Despite no Firm Date for Tenant Fees Ban

Published On: November 5, 2018 at 10:10 am

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A message sent from an unnamed landlord said it was increasing management fees, in order to compensate for predicted upcoming losses.

Letting agents are already increasing their fees to landlords, despite no agreed date being set for the Tenant Fees Bill.

A message sent from an unnamed landlord said it was increasing management fees by 3.5%, in order to compensate for upcoming losses as a result of the tenant fees ban. The note then states that it will increase the fee only by 1.5% as the landlord is a longer-term customer.

Revealed on housepricecrash.co.uk, the message from the agent to the landlord says: “On average, other agents in the area are increasing their fees by up to 5%. We are only looking to increase our overall management fees by 3.5% but I have spoken to [Letting Agent] and as we have been managing your property for a while now, have a good relationship with you and value your custom, we are only going to increase yours by 1.5% so minimal impact.

“What is happening on tenancy renewals is that the rents are being increased to incorporate the increase and make sure you are still earning more money. Your tenant’s contract is ending in December and she has confirmed that she wants another 12 months.”

David Cox, chief executive of ARLA Propertymark, said: “I would suggest it is sensible to prepare the landlords now. These fees aren’t going to go away, they will be merged into something else.

“You can’t take that sort of money out of the industry and expect it to disappear. Tenants will end up paying the fees through their rent.”

No date has yet been given for the start of the Tenant Fees Ban, however it passed its second reading in the House of Lords, and will go to the committee stage in the coming weeks. Find all the information on the proposed changes, as we cover essential updates on the Tenant Fees Ban.

Knight Frank Prime London Lettings Report shows Demand Outstripping Rental Supply

Published On: November 5, 2018 at 9:04 am

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Prime London Lettings Report is showing that demand is outstripping rental supply.

New figures from Knight Frank show that there has been an increase in rent prices in London’s prime property market. They have risen by 1.1% in the 12 months to September, which is thought to be down to people choosing the tenant lifestyle over that of a homeowner, amid Brexit uncertainty.

According to this latest prime London lettings report from Knight Frank, there is a higher demand for let properties, than there is supply. This could also be down to the fact that more landlords are looking to leave the market due to the recent hit of tax changes, however the overall outlook for landlords staying in the market appears to be positive.

However, there has been an increasing number of landlords putting properties up for sale, which has resulted in an overall decline in supply, therefore putting increasing pressure on rent prices.

Looking at separate data collected by Rightmove, we can see that lettings listings have dropped 7% in prime central London during the year to September 2018, in comparison with 12 months previous. In outer London, this decline was 10% for prime property. The result of this has been a growth to annual rental value in prime central London, as well as annual decline in prime outer London beginning to slow.

The annual change of a 1% decrease in prime outer London is the most moderate rate of decline seen in two and a half years. One recent change that could be influencing the situation is the tenant fees ban, which Knight Frank believes could prompt more landlords to reassess the strength of their portfolios, in order to prepare for a possible increase to administrative charges.

Although the UK faces many uncertainties in relation to political changes, combined with this declining level of supply, Knight Frank has seen 6% more new tenancies agreed in the year to September 2018 than it saw a year ago.

No Sign of a Seasonal Slowdown for the UK Property Market, Reports Agency Express

Published On: November 2, 2018 at 10:38 am

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Following buoyant activity in September, the latest Property Activity Index from Agency Express confirms that there’s no sign of a seasonal slowdown for the UK property market.

During October, it’s typical to see a seasonal slowdown. However, monthly data from Agency Express shows that, nationwide, both new property listings for sale and the number of properties sold has risen, by 10.6% and 20.7% respectively. This marks a record best month for October.

Observing activity across the individual regions of the UK, Agency Express found that 11 saw growth in new property listings during October, while all 12 reported increases in the amount of properties sold.

The month’s top performing regions included:

New property listings

  • Central England: +21.6%
  • Wales: +21.5%
  • Yorkshire and the Humber: +16.7%
  • Scotland: +15.4%
  • West Midlands: +14.1%
  • North East: +13.4%
  • South East: +12.5%

Properties sold 

  • West Midlands: +33.1%
  • Yorkshire and the Humber: +32.9%
  • North East: +32.3%
  • Scotland: +32.0%
  • Wales: +26.7%
  • East Midlands: +23.4%
  • Central England: +20.9%

A spike in activity was also recorded for London. Following three consecutive months of declines, the number of properties sold in the capital was up by 12.4% in October, while the amount of new property listings rose by 4.0%.

The only decrease in this month’s index was in East Anglia, where the number of new listings dropped by 1.0% over the month.

Stephen Watson, the Managing Director of Agency Express, comments: “October’s Property Activity Index data has reported favourably across the nation. However, as I commented last month, while we have seen a spike in activity, figures are stimulated by a recent surge of agents using Agency Express. The Property Activity Index data gives an insight into current market activity, and this data is drawn from our ever-growing client base. As we now head into the last few months of the year, we would expect to see a slowdown in activity. Although, with our current level of activity, it will be interesting to see how the seasonal slowdown compares to years previous.”

Fresh Calls for Restrictions on Airbnb-Style Listings

Published On: November 2, 2018 at 9:59 am

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Rise in housing waiting lists as landlords sell up or convert to Airbnb lets

Fresh calls have been made for restrictions on Airbnb-style listings in the rental sector, just days after the Irish Government announced plans to introduce a new set of laws to address short-term lets promoted through the platform.

The Irish Government has proposed regulations for Airbnb, which will come into force in June 2019. The regulations aim to prevent landlords from favouring short-term rental contracts and to keep their properties in the long-term lettings market.

Ireland’s Department of Housing stated: “The purpose of these changes to the planning code is primarily to address the longer-term rental issues arising from the use of properties for short-term letting.

“This is an unregulated activity, it is not home-sharing as it is typically understood, and in a time of housing shortage, it is unacceptable that rental homes would be withdrawn from the letting market, particularly in our cities and large towns where rents are high and supply is still constrained.”

Berlin, Barcelona and Paris have all passed measures to regulate similar issues. However, the UK is yet to. Newcastle City Council insists that this needs to change.

The council is concerned that far too many properties are being rented on a short-let basis in the city, mainly through Airbnb.

The platform currently operates a 90-day limit on the length of time that a property can be let in London, but there are no such restrictions outside of the capital.

A meeting of Newcastle City Council’s Planning Committee heard that restrictions would stop homes being constantly let to tourists, including hen and stag parties.

The Assistant Director of Planning at the council, Kath Lawless, said that there was “a need nationally to look at this issue”, as the council was “constrained” by Government legislation.

Neil Cobbold, the Chief Operating Officer of proptech firm PayProp UK, said that he was surprised that the Chancellor did not announce a clampdown on Airbnb-style listings, in his response to this week’s Budget statement.

Government Agency Explains how it Plans to “disrupt the housing market”

Published On: November 2, 2018 at 9:11 am

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Landlords have been welcoming the new guidance for councils on the minimum room size regulations for rented homes.

Homes England has published its latest Strategic Plan, detailing how it will “disrupt the housing market” over the next five years.

The Government agency, which supports housebuilding in England, has released the five-year plan, setting out its goals from 2018/19 to 2022/23.

It has pledged support for Help to Buy and Shared Ownership schemes, as well as building “better homes in the right places”.

In Monday’s Budget announcement, the Chancellor abolished Stamp Duty on Shared Ownership homes, backdated to the previous Budget (November 2017). The extension of Help to Buy to 2023 was also confirmed.

Homes England has also vowed to help unlock public and private land, and to provide investment products to support housebuilders, both large and small.

The report notes how just 11% of England’s land is developed, with just a fraction of developable land needed to significantly increase housing supply. This is why the agency will unlock the land to build more homes where they are needed.

Government Agency Explains how it Plans to “disrupt the housing market”

Government Agency Explains how it Plans to “disrupt the housing market”

Worryingly, however, it explains that, based on current entrant levels, the construction sector could see a 20-25% decline in workforce by 2026.

Lower supply is likely the cause of affordability pressures in the housing market. The report claims that the average home now costs almost eight times more than typical earnings.

The ratio of average house price to income has hit record levels, pricing millions of households out of the market.

Sir Edward Lister, the Chairman of Homes England, says: “Ultimately, we need to disrupt the housing market. Homes England plans to be bold, creative and think big.

“We hope the whole of the housing sector – big and small, up and down the country – will join us for the next five years and beyond.”

James Brokenshire, the Housing Secretary, also comments on the report: “This Government is committed to delivering 300,000 homes a year by the mid-2020s and help more people get on the housing ladder. Homes England is at the heart of these plans.

“I welcome their comprehensive vision that sets out how, through their powers and expertise, they will maximise Government investment to deliver the homes communities need.”

New Selective Licensing Scheme in Sheffield comes into Force Today

Published On: November 1, 2018 at 10:41 am

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Buy-to-let landlords in parts of Sheffield must now apply to the council for a licence to let their properties, as a new selective licensing scheme comes into force today (Thursday 1st November 2018).

Under the new selective licensing scheme, all landlords who own properties in parts of London Road, Abbeydale Road and Chesterfield Road must have applied for a licence in order to continue letting to tenants.

New Selective Licensing Scheme in Sheffield comes into Force Today

New Selective Licensing Scheme in Sheffield comes into Force Today

Sheffield City Council explains that the new selective licensing scheme is being introduced to improve the standard of properties in the local private rental sector.

Under the rules, landlords must:

  • Apply and pay for a licence for each property that they let in the relevant areas
  • Prove that they (or their managing agent) are a fit and proper person, such as appropriate management of the property, tenancy problems, and repair and maintenance issues

Landlords who have not yet applied for a licence are at serious risk of breaching the new selective licensing scheme, and could face criminal prosecution and financial penalties as a result.

Councillor Jim Steinke, the Cabinet Member for Housing at Sheffield City Council, tells landlords: “Don’t underestimate our commitment and our powers. We mean what we say.

“We have thousands of safe and well managed private rented properties across the city. But we cannot ignore the despicable conditions we saw on London Road, Abbeydale Road and Chesterfield Road. We encourage all landlords to help themselves and take responsibility.”

He adds: “Everyone deserves to live in safe, good quality housing, regardless of whether they rent or own their home.”

If you own properties in any of the areas of Sheffield mentioned above, we urge you to ensure that you have the correct licences in place under the new selective licensing scheme.

We will continue to keep you up to date with details of licensing schemes across the country at LandlordNews.co.uk.