Written By Em

Em Morley

Government Issues Guidance for Landlords on New MEES

Published On: October 18, 2017 at 9:50 am

Author: Em Morley

Categories: Landlord News

Tags: energy efficiency,EPCs,landlord law,MEES

Eco-friendly ways to reduce running costs and add value to a property

The Government has issued guidance for landlords on how to comply with the new Minimum Energy Efficiency Standards (MEES), with just under six months to go until the rules come into force.

We’ve worked with London estate agent Portico to explain how the new MEES will work in regards to EPC ratings, the impact the rules will have on landlords and the steps that you should take now to avoid hefty fines.

An Energy Performance Certificate (EPC) is a guide that potential homebuyers or tenants receive when they look into a property. Every property that’s put up for sale or to let is legally required to have an EPC, which usually costs between £60-£120.

Government Issues Guidance for Landlords on New MEES

It uses a ratings system from A to G to show how efficiently a home uses energy, as well as including details of the cost of running the property and recommendations on how to improve its energy efficiency.

The A rating indicates that the home is most energy efficient, while G is the lowest (worst) rating.

From April 2018, it will be illegal to grant a new lease (even to existing tenants) on a domestic or commercial property with an EPC rating below E – in order words, any homes rated F or G must be improved or immediately taken off the rental market (unless the landlord registers an exemption).

It is believed that one in ten residential properties currently have an EPC rating of F or G, so would not meet the new standards.

A civil penalty of up to £4,000 will be imposed for breaches of the new MEES, so it’s imperative that you make sure your rental property meets the higher standards.

The Government has recently announced that it will be opening an exemptions register from next month. However, we already know that the new MEES will not apply to:

Buildings that are not required to have an EPC, such as certain listed buildings
Temporary properties and holiday lets
Buildings where the EPC is over ten years old or where there is no EPC
Buildings let on tenancies of over 99 years or less than six month (where such tenancy does not contain a right of renewal)
Where an independent surveyor determines that the relevant energy efficiency improvements would reduce the value of the property by more than 5%
The improvements are deemed financially unviable, as they do not pay for themselves through energy cost savings within a seven-year timeframe
If the landlord is unable to get consent from a third party to carry out the energy improvements, for example, from the local authority of an incumbent tenant
A detached building with a total floor space under 538 square foot
A building that is due to be demolished by the seller or landlord, and has all of the relevant planning and conservation consent

With the new MEES just around the corner, now’s the time to make sure that your rental property meets the new requirements.

If your current EPC rating is below E, you must make a plan to improve the energy efficiency of the property. These works must be implemented before April 2018 in order for you to grant a new lease on the property. You must also be aware that the new MEES will apply to all tenancies (even those with existing tenants) from April 2020.

To help landlords, the Department for Business Energy and Industrial Strategy has issued guidance documents on compliance with the MEES, in accordance with the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015.

The documents provide guidance and advice on the following:

The scope of the regulations – the steps a landlord should take to determine whether their property is covered by the regulations, and the steps they should take to ensure that their property complies with the minimum level of energy efficiency
Relevant improvements – how a landlord can identify appropriate energy efficiency improvements for their property
No upfront cost funding (domestic only) – how a landlord can investigate availability of no-cost funding to cover the cost of improving a domestic property
Cost effectiveness (non-domestic only) – how a landlord can determine whether particular improvements would be cost effective to install in a non-domestic property
Exemptions and exclusions – the exemptions framework and the steps a landlord should take to register a valid exemption
Enforcement – the enforcement framework and the options open to enforcement authorities when policing compliance with the MEES, including information on fines and other penalty options
The appeals framework – landlord appeals will be heard by the First-tier Tribunal, part of the court system administered by Her Majesty’s Courts and Tribunal Service; the guidance discusses the steps a landlord will need to take to lodge an appeal and how that process will be managed

You can read the guidance by clicking here.

Rent Price Growth Unchanged from Last Month, Reports ONS

Published On: October 18, 2017 at 9:06 am

Author: Em Morley

Categories: Property News

Tags: rent price growth,rent prices,tenants

Annual rent price growth across Great Britain was unchanged from the previous month in September, according to the latest index from the Office for National Statistics (ONS).

Rent Price Growth Unchanged from Last Month, Reports ONS

In Great Britain as a whole, the average rent price rose by 1.6% in the year to September. In England, prices were also up by an average of 1.6% over the same period, while Wales saw growth of 1.4%. In Scotland, the average rent price increased by 0.3% in the 12 months to September.

London rent prices grew by an average of 0.9% in the 12 months to September, which is 0.7 percentage points below the average rate recorded across Great Britain and down from 1.2% in August. The Royal Institution of Chartered Surveyors (RICS) reports that near-term expectations are still negative for the capital – an ongoing trend stretching back to August 2016.

Growth in private rent prices paid by tenants in Great Britain has seen signs of a slowdown since the end of 2015, the ONS reports. For example, a property that was let for £500 per month in September last year, which saw its rent increase by the average rate in Great Britain, would be let for £508 in September 2017. This slowdown has been driven mainly by a slowdown in London over the same period.

The annual rate of change for Wales in September (1.4%) is now similar to the annual increase for England and Great Britain (both 1.6%). Wales has seen a broad rise in its annual growth rate since July 2016.

Rent price growth in Scotland (0.3%) has now hit its joint highest rate since May 2016. This weaker increase may be due to stronger supply and weaker demand in the country, as reported by the Association of Residential Letting Agents (ARLA).

Focusing on the English regions, the largest annual rent price increases were recorded in the East Midlands (2.9%), up from 2.8% in August, the South East (2.5%), down from 2.6% in the previous month, the East of England (2.4%), up from 2.1% in August, and the South West (2.1%), unchanged on a monthly basis.

The lowest annual rent price rises were in the North East (0.4%), unchanged from August, London (0.9%), down from 1.2% in the previous month, the North West (1.3%), down from 1.4% in August, and Yorkshire and the Humber (1.6%), down from 1.7% in the past month.

Recent research claims that London tenants are now spending almost £1,900 per month on rent, despite the slowdown being seen in the capital.

European Demand for London Rental Properties Continues Despite Brexit

Published On: October 18, 2017 at 8:09 am

Author: Em Morley

Categories: Property News

Tags: Europe,London,Right to Rent,tenants

European Demand for London Rental Properties Continues Despite Brexit

High levels of European demand for rental properties in London continue to be recorded, despite concerns around the UK’s departure from the EU and the status of European citizens in the country when Brexit finally happens.

The latest figures from rental website Spotahome show that the majority of bookings made for rental properties in London stem from the UK’s European neighbours. The largest number of bookings comes from France, which accounts for 22.2%, followed by Spain, Germany and Italy.

With an estimated 300,000 French citizens currently residing in the UK and the majority of these believed to be based in London, the English capital was recently referred to as France’s “sixth biggest city” by the French president, Emmanuel Macron.

Despite Brexit, the French love affair with London continues. This is demonstrated by the large number of searches and bookings for rental properties in London from the European nation.

Despite strong European demand for British rental properties, the second largest number of bookings made on the site came from the UK – accounting for 11.9% of bookings.

The CEO of Spotahome, Alejandro Artacho, comments: “It is no surprise that the majority of the bookings on the site are from the UK’s European neighbours. London is and always will be a hub that appeals to people from all over the world. It’s great to see that alongside Spotahome being popular with people from overseas, the platform is gaining popularity within the UK, due to it being a far more effective method for finding accommodation.”

Landlords, are you seeing high levels of European demand for your properties? While it is uncertain what will happen to the rights of European citizens when the UK leaves the EU, you can still accept tenants with EU citizenship.

However, please remember that you must check the immigration status of all prospective tenants before letting to them under the Right to Rent scheme. The Home Office has worked with us to create a guide to help you understand the requirements: /home-office-reinforces-landlord-responsibilities-right-rent/

Annual House Price Growth at 5% in August, Show Official Figures

Published On: October 17, 2017 at 9:35 am

Author: Em Morley

Categories: Property News

Tags: average house price,house price growth,house prices,property market

Annual house price growth stood at a solid 5.0% in August, up from 4.5% in July, according to the latest official figures from the Office for National Statistics (ONS) and Land Registry.

The annual growth rate has slowed since mid-2016, but has remained broadly under 5% during 2017.

In August, the average house price across the UK was £226,000. This is £11,000 higher than in August last year and £1,000 up on the previous month.

By country

The main contributor to the increase in UK house prices was England, where the average property value increased by 5.3% over the year to August, with the typical home now worth £244,000.

Wales saw house prices rise by an average of 3.4% over the last 12 months, to reach an average of £150,000. In Scotland, annual growth stood at 3.9%, taking the average value to £146,000. The average house price in Northern Ireland currently stands at £129,000, after rising by 4.4% over the past year.

Regionally

On a regional basis, London continues to be home to the highest average property value in the UK, at £484,000, followed by the South East and the East of England, where average house prices are £325,000 and £288,000 respectively. The lowest average price continues to be found in the North East, at £131,000.

Annual House Price Growth at 5% in August, Show Official Figures

The North West showed the highest annual growth in the year to August, with prices up by an average of 6.5%. This was followed by the East of England, East Midlands and South West, where prices rose by 6.4% in each. The lowest annual growth was recorded in London, where the average property value was up by just 2.6% in the 12 months to August, followed by the North East, at 3.7%.

By local authority

The local authority showing the highest annual rate of growth in the year to August was Wellingborough, where prices increased by an average of 15.3%, to reach £215,000.

Low numbers of sales transactions in some local authorities, such as the Shetland Islands and City of London, can lead to volatility in the series. Whilst efforts are made to account for this volatility, the change in price in these areas can be influenced by the type and number of properties sold in any given period.

The lowest annual rate of growth was recorded in Aberdeenshire, where prices dropped by an average of 5.7%, to stand at £189,000.

In August, the most expensive location to purchase a property was the Royal London Borough of Kensington and Chelsea, where the average home cost £1.2m. In contrast, the cheapest area to buy was Blaenau Gwent, which has an average property value of £82,000.

Industry comments

Ishaan Malhi, the CEO and Founder of online mortgage broker Trussle, responds to the latest house price figures: “House price growth is good news for homeowners, but won’t be welcomed by those looking to get on the ladder. We’ve already begun to see many lenders increase their rates this month, and there could be further rate rises on the horizon from the Bank of England. This will make securing a first mortgage that bit harder, though we should remember that there are still extremely attractive mortgage deals on the market.

“If the Bank of England does decide to raise the base rate next month, it will have an immediate impact on those on a variable rate mortgage, who will see their monthly mortgage payments creep up. With more rate rises potentially on the horizon, those nearing or beyond the end of their initial mortgage term should already be thinking about switching to a more suitable deal.”

Russell Quirk, the Founder and CEO of online estate agent eMoov.co.uk, also comments: “A rather modest rate of growth continues for the UK market, but positive growth nonetheless, which is good news for homeowners given the turbulent market conditions.

“This slowdown in price growth may seem as unusual as the sun that shone over the UK yesterday, but there are positive signs peeping through the clouds. While a slowing London market may be putting a dampener on the overall forecast, England continues to lead the way where prices are concerned, with many areas seeing strong annual growth.

“It’s testament to the diversity and resilience of the UK market that this growth is spread across the North West, South West, East and Midlands.

With a sustained level of buyer interest, albeit more cautious than usual, the market should weather any potential storm on the horizon, with the dark clouds of recent market uncertainty already starting to lift.”

The CEO and Co-Founder of buy-to-let specialist Landbay, John Goodall, offers his thoughts: “House prices rose across the UK in August, as the market shrugged off any signs of a prolonged summer slowdown. Although record low mortgage rates will be helping those who have already stumped up a deposit, escalating house prices will come as yet another blow to aspiring homeowners looking to get their foot on the housing ladder.

“It is essential that the Government doesn’t lose focus on addressing the housing crisis and makes good on its promise to build the thousands of new, affordable homes that people desperately need. Fast approaching, next month’s Autumn Budget will be a chance for the Chancellor to reassure the industry on these plans and, I hope, address some further urgent matters. Investment and planning in the areas where rental and house price growth is reaching particularly unsustainable levels, like the East of England, will be key.”

Richard Snook, the Senior Economist at PwC, has this to say: “Today’s housing market data from the ONS and Land Registry shows relatively little movement in price growth from the previous month. House price inflation rose to 5.0% in the year to August, from a downwardly revised 4.5% in July (originally reported as 5.1%). This takes the average UK price to £226,000 in August.

“London remains the weakest performing English region and the August figures show the average price of a home fell by £5,000 to £484,000. Prices are now just 2.5% higher than they were a year ago. With overall consumer price inflation at 2.7% in August, this means London’s house prices declined in real terms.

“The uncertainty over Brexit may be felt more keenly in London than other areas, due to the importance of international businesses. Figures from the City of London borough bear this out, where prices are down 18.4% compared to a year ago.

“Growth remained quite strong in the rest of England, especially in the North West, where prices were up 6.5% in the year to August. The East Midlands, South West and Eastern regions all showed growth of 6.4%.”

Landlords and Agents Accepting Forged Passports Due to Right to Rent Scheme

Published On: October 17, 2017 at 9:05 am

Author: Em Morley

Categories: Landlord News

Tags: landlord law,letting agents,Right to Rent,tenants

Landlords and letting agents are unknowingly accepting forged passports from prospective tenants, as the Right to Rent scheme is fuelling a black market in fake IDs, a new report claims.

Landlords and Agents Accepting Forged Passports Due to Right to Rent Scheme

The Right to Rent scheme, which was rolled out across England last year, requires landlords and their letting agents to check the immigration status of all prospective tenants, to determine whether they have the right to live in the UK.

However, there is growing concern that the scheme has fuelled discrimination against British citizens that do not have a passport, as well as foreign tenants, leaving them at a disadvantage in the private rental sector.

A new investigation by the BBC has found that many landlords and letting agents are unable to identify forged passports, leaving them vulnerable to fraudsters with fake IDs.

The research found that criminal gangs are using forged passports that are impossible to identify with the naked eye.

An undercover reporter for BBC Inside Out London was able to purchase fake passports, as well as National Insurance cards and residence permits, from illegal dealers across London.

Using a secret camera, the reporter recorded the deals, with fraudsters charging up to £500 for a forged passport. Some documents arrived within 48 hours.

The forged IDs were then presented to letting agents, who were secretly filmed accepting them without question as proof of UK residency status.

Akhbar* told Inside Out: “In an average week, they were selling between six to ten fake residence permits or passports. In the last few months or so, I would say they got even busier.”

Home Office figures show that 170 fines have been issued to landlords under the Right to Rent scheme since October 2016. However, a Home Affairs spokesperson told the BBC that landlords and letting agents are not expected to be experts in spotting forged documents.

But David Smith, of Anthony Gold Solicitors, who specialises in landlord and tenant law, has expressed concerns.

“They [landlords] do not have the knowledge or skills to do the job properly. I’ve never met a landlord who can tell a valid Liechtenstein passport from a forgery,” he told the BBC.

Although you are not required to identify forged passports under the Right to Rent scheme, we do remind all landlords to stick to the law to avoid harsh penalties.

*Not his real name

Second-Stepper Sellers Most Likely to Find Buyers Before Christmas, Reports Rightmove

Published On: October 17, 2017 at 8:07 am

Author: Em Morley

Categories: Property News

Tags: homebuyers,house prices,property sales,sellers

Second-stepper home sellers are the most likely to find a buyer before Christmas, according to the latest House Price Index from Rightmove.

The property portal reports that the average price of property coming onto the market was up by 1.1% (£3,432) on a monthly basis in October to stand at £313,435.

The Rightmove index has recorded an increase in October every year since it started back in 2001, but this month’s is the largest since the 1.4% rise recorded in 2014. However, with more sellers chasing fewer buyers, this month’s 104,000 new-to-market sellers will have to work harder to find a buyer before Christmas.

The Director and Housing Market Analyst at Rightmove, Miles Shipside, says: “With Christmas some 69 days away and the average time to find a buyer being 63 days, many of the 104,000 new sellers this month will be hoping to agree a sale before Christmas. It will be harder for this autumn’s sellers to secure a sale, because buyers have more choice, with a 3.1% increase in new seller numbers compared to this time a year ago.

“In addition, the number of sales agreed was running ahead of 2016 over the summer, but has now fallen back, with a 5.9% decrease compared to last September. New sellers’ pricing optimism may therefore be unfounded in some parts of the country. While this month sees higher asking prices in eight out of ten regions, sales agreed are below this time a year ago in nine out of ten. With buyers becoming more Scrooge-like with their cash, sellers who have undercut the average 1.1% rise in asking prices may stand a better chance of finding a buyer before Christmas, especially if they are in one of the more active parts of the market.”

The average time from first advertising on Rightmove to being marked as sale agreed by an estate agent was 63 days this month. However, national averages mask many regional and sector variations. The properties that are moving the quickest are in the second-stepper sector – those with three or four bedrooms – except four bedroom detached homes, where the average time taken to find a buyer is 60 days.

Second-Stepper Sellers Most Likely to Find Buyers Before Christmas, Reports Rightmove

Typical first time buyer properties – those with two bedrooms or fewer – also just undercut the average, at 62 days.

Shipside observes: “Whilst affordability is stretched, it is still countered by the motivation to own a home rather than rent, or the need for extra space to house a growing family. Sellers looking to find a buyer before Christmas have a head start if they are selling a property in these two mass-market sectors, as that is where there is the greatest demand.

“However, with buyers’ average wage rises often falling behind retail price inflation, and with a rise in interest rates being more heavily trailed by the Bank of England, sellers in these most popular sectors should still be wary of over-pricing. Buyers will be looking for the best buy on the market in their desired area, either in terms of price or quality of finish.”

The toughest market at present is the sector made up of properties with five bedrooms or more, with this top-of-the-ladder category taking a current average marketing time of 76 days.

The challenge to sell these larger properties is particularly noticeable in London, where the average time to sell is now 86 days. This longer period is having an effect on overall market activity in the capital, with the number of sales agreed down by 9% on the same period last year – more than any other region.

It’s regions in the southern half of the country that are dipping most, with an average of 7.9% fewer sales being agreed than this time last year, while the northern half performs somewhat better, with a fall of just 3%.

For the year as a whole, however, 2017 still remains ahead of 2016 on sales agreed numbers, with the year to date being 1.1% ahead of the previous year.

Shipside concludes: “Sales agreed numbers are holding up better in the north, whilst a common factor throughout the country is the lower and middle market sectors being the most active. However, where property prices have far outstripped buyers’ wages, and consequently their affordability, sellers will either have to be more tempting with their asking prices or outscore other properties with extra desirable features.

“With the number of sales agreed for the year still up on a pretty busy 2016, it shows there is plenty of potential life in the market and need for housing, but at the right price and quality. Get that right and it will hopefully mean the present of a successful sale for Christmas and the gift of a new home in the New Year. Those homeowners who need to do some work to their home to make it more attractive to potential buyers should get ready now in time for marketing in January.”

The Chairman of estate agent Jackson-Stops, Nick Leeming, offers his thoughts on the index: “The driving force behind the slowdown in sales in September is the combination of a lack of supply of homes to the market and potential buyers being warier than usual, due to the prospect of increasing interest rates. Christmas is generally a crucial deadline for everyone involved in the house buying and selling process, with buyers wanting to unwrap gifts with their family in their new property. Accurate pricing is vital to secure a sale as quickly as possible, particularly as buyers are savvier than ever before on their local property market, given the host of research tools at their disposal. Buyers will generally have a clear check-list of what they want in a home and they will not pay over the odds in the current climate for something that does not tick all the boxes.”

Kevin Shaw, the National Sales Director at Leaders estate agent, also responds: “The market varies significantly from region to region, but certainly in the south it is now more price sensitive, whereas in some areas of the Midlands, we are still seeing demand outweigh supply and high asking prices being achieved. Whatever the market conditions, it is always important to set the right price as soon as a property comes onto the market. This is even more crucial if you want to achieve a sale within a specific timeframe. Although the market is now slightly quieter as we continue into October, it certainly is possible to secure a buyer by Christmas.”

The Managing Director of Andrews estate agent, Chris Chapman, comments on market conditions: “We’re seeing similar lead times as Rightmove to secure a buyer, and we are working with our vendors already who are looking to move in the New Year to get their properties listed now to get a buyer settled in time for Christmas. The key with the current market is correctly priced property, which is all about using an experienced agent. We are seeing more and more regional differences in the property market, so selecting an agent with detailed knowledge of your area is key to success.”

Finally, the Founder and CEO of online estate agent eMoov.co.uk, Russell Quirk, says: “The north-south divide is no new division where UK house prices are concerned, but a slower market climate in recent times has seen the divide almost reversed, with the more affordable areas in the north performing much better where actual price growth is concerned. Of course, it goes without saying that those with a top-of-the-ladder property will find it harder to sell, as these properties take a bit more time whatever the market conditions.

“With the UK market showing positive signs of a recovery over the last few months, it is unlikely the average UK seller will struggle as we approach one of the busiest periods in the UK property market calendar. I certainly don’t think there are more sellers chasing fewer buyers, as the level of housing stock, or lack thereof, continues to be the driving factor behind UK price growth. There are many pockets of the UK outside of the top-end market in London and the South East that are still seeing an imbalance between the level of buyer demand to houses available.”