Written By Em

Em Morley

Five Ways to Comply with Energy Efficiency Legislation

Published On: August 3, 2017 at 8:19 am

Tags: energy efficiency,EPCs,landlord law,MEES

Martyn Reed, Managing Director of the UK’s largest energy assessor scheme, Elmhurst Energy, looks at energy efficiency legislation affecting landlords.

Since 1st April 2016, all domestic tenants have had the right to request consent for energy efficiency improvements. This applies to all privately rented domestic properties let under an assured tenancy and a regulated tenancy. This will be widened to cover an assured agricultural occupancy, protected tenancy and statutory tenancy.

Five Ways to Comply with Energy Efficiency Legislation

There are some exceptions. If the building is exempt from having an Energy Performance Certificate (EPC), then a landlord is not required to provide consent. Your tenant must also show that the measures could be installed with no upfront cost to the landlord.

In January 2017, the Government announced that the Green Deal Finance Company (GDFC) had been sold to Greenstone Finance and Aurium Capital Markets, and money was available to invest. Under the law, residential private landlords cannot unreasonably refuse consent to a tenant’s request for energy efficiency improvements if the various criteria are met. It’s imperative therefore that landlords are aware of their obligations and do not get caught out by these changes.

Coupled with this legislation, from 1st April 2018, the minimum EPC rating for private rental properties will be set at a band E. The regulations will initially only apply upon the granting of a new tenancy to a new tenant and a new tenancy to an existing tenant. However, from 1st April 2020, the regulations will apply to all privately rented property within scope, which are those that have an EPC or are required to have an EPC as per existing EPC legislation. While some exemptions apply (including where improvement measures would devalue the property by more than 5%, or where properties are unsuitable for wall insulation), there are penalties if regulations are not met, with fines up to a maximum of £5,000.

Green Deal financing has the potential to help landlords and letting agents requested by tenants to install energy efficiency improvements or, as of April 2018, landlords who own properties that fall below the new minimum energy efficiency (EPC) rating of E. The loans are more easily managed, as they are repaid as part of a customer’s energy bill, which will normally be reduced by the energy savings generated from the measure the loan has financed – a pay-as-you-save scheme. Furthermore, the loan remains with the property and is paid by the energy bill payer, ensuring the payments are made by the person who benefits from the energy saving.

Landlords and letting agents should not see the energy efficiency measures as punitive. Remember, energy efficiency measures do require some initial outlay, but will save your tenants money, make their home more comfortable and add to the value of your property in the long run. Think of them as an investment in your business.

Hints and tips

Use an Elmhurst-accredited energy assessor to produce an EPC. It is recommended that you only rely on a recent EPC, as changes in the building, technology and fuel prices can all impact the EPC recommendations. You can find an energy assessor in your area via a search facility here: elmhurstenergy.co.uk.
Register your interest for Green Deal financing at: http://gdfc.co.uk/
Don’t get caught out by the Deregulation Act, as EPCs are central to this legislation too. As a landlord entering a short-term tenancy, you risk losing your right to issue an eviction notice under Section 21 if you have not complied with all your legal obligations, including the provision of an EPC.
If your property does not reach energy efficiency rating band E, plan for energy saving measures, such as cavity wall, loft insulation, hot water, cylinder insulation or double-glazing. Your EPC will indicate options including estimates of cost, payback and the predicted improvement in your rating.
Landlords with multiple properties may consider using energy efficiency software such as Elmhurst’s Streamline EPC, which can help you to calculate the effect of improvements over your portfolio of properties.

Landlord fined for gas safety negligence

Published On: August 2, 2017 at 11:53 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,gas,gas safety,landlords

A private landlord with a rental property in Haverfordwest, Pembrokeshire has been prosecuted, after failing to maintain gas appliances in his rental property.

Mr Gous Ahmed was found guilty at Llanelli Magistrates Court of breaching Regulation 36 (1) of the Gas Safety (Installation and Use) Regulations 1998. As a result, he was given a fine of more than £15,000 and ordered to pay costs of £2,500.

Dangerous

The rental property in Haverfordwest was inspected by British Gas in February 2015. On this inspection, British Gas found the boiler and fire to be ‘immediately dangerous,’ with the tenants in the property at imminent risk of potential harm.

Upon further investigation, the Health and Safety Executive found that Mr Ahmed had not obtained the sufficient Landlord Gas Safety Record for his rental property.

Landlord fined for gas safety negligence

Despite improvement enforcement action carried out by the Health and Safety Executive and a number of letters from various council officers, the landlord still failed to obtain the relevant Gas Safety Record.

After the case, Health and Safety Executive inspector Simon Breen, noted: ‘Mr Ahmed put the residents and other members of the public at risk of harm by failing to maintain gas appliances in the domestic property. Landlords and duty holder must ensure they obtain a Landlord Gas Safety Record and they maintain all gas appliances in accordance with the law.’[1]

Landlords should be sure to download our guide to Gas Safety, available in the guides section of our website.

[1] https://www.landlordtoday.co.uk/breaking-news/2017/7/landlord-fined-for-gas-safety-breaches

Could we be set for the largest two-month maturity period since 2012?

Published On: August 2, 2017 at 9:56 am

Author: Em Morley

Categories: Finance News

Tags: landlords,mortgages,remortgage,remortgaging

According to recent data from CACI, around £17bn worth of mortgages in the UK are set to mature in September, with another £18bn in October.

This makes the two-month maturity period the largest since 2012.

Remortgaging

Analysis from Yorkshire Building Society suggests that homeowners looking to remortgage could begin to see their monthly repayments fall. This is due to reduced mortgage rates and increased house prices benefiting mortgage loan-to-value (LTV).

For example, a homeowner in London who initially borrowed 90% of a property worth £250,000 in July 2015 at a market average rate of 3.60% could benefit from a reduced LTV of 72% when remortgaging. This is due to house prices in the region rising by 14.9% during the two-year period.

Moving to Yorkshire Building Society’s current two-year fix of 1.14% for borrowers with a 75% LTV could save £255 per month in repayments. This could amount to more than £3,000 per year.

Could we be set for the largest two-month maturity period since 2012?

Surge

Charles Mungroo, Mortgage Manager at Yorkshire Building Society, noted: ‘With such a large proportion of mortgage deals coming to an end in September and October we expect to see a surge in remortgages soon.’

‘Homeowners should be planning ahead long before their fixed period ends to ensure they get the best option. Longer term fixes may appeal to borrowers who want to keep their monthly repayments as low as possible whilst also being able to budget for the next five years. All our mortgage offers are valid for six months so customers have reassurance that they’ve secured a great rate but they also have some breathing space if they have other priorities at the moment, such as a summer holiday.’[1]

[1] http://www.propertyreporter.co.uk/finance/the-biggest-two-month-maturity-period-since-2012-due-to-hit-this-autumn.html

How Technology Could Reduce Complaints Against Letting Agents

Published On: August 2, 2017 at 9:45 am

Author: Em Morley

Categories: Property News

Tags: complaints,letting agents,proptech,technology

Effective use of technology and automation could help to reduce the number of consumer complaints against letting agents, according to payment management solution PayProp.

The firm makes the claim following the recent publication of The Property Ombudsman’s (TPO) annual report.

How Technology Could Reduce Complaints Against Letting Agents

The study showed that letting agents were ordered to pay 51% more in awards to consumers during 2016 than the previous year.

What’s more, the number of resolved complaints against letting agents increased during this period, with an average lettings reward of £531.

TPO’s latest report shows that management, and communication and record keeping are two of the top four causes of complaints against letting agents, while PayProp says it is in these areas where technology could help firms become more efficient.

The CEO of PayProp in the UK, Neil Cobbold, confirms: “The finding that many agents have fallen down when it comes to management, record keeping and communication tallies with our own data.”

He believes that in these instances, incorporating streamlined and automated processes could reduce the chances of agents receiving complaints, particularly as there will be a record of all their activity, which is difficult to constitute with paper-based processes.

Cobbold also notes that when it comes to bad record keeping and management, there are two types of agencies – those who make inadvertent mistakes and a small minority who use the lettings industry to break the law intentionally.

He insists that technology can help in both cases: “It can stamp out incorrect handling of some steps, by helping with management, communications and record keeping, and it can also be used to track and trace wrongdoing.

“Although it can’t stop an agent doing anything illegal, it can help provide insurmountable evidence and an indelible audit trail.”

He adds that effective application of technology can raise transparency: “It gives rogue agents less to hide behind and helps to make sure that agents are acting in landlords’ interests.”

The CEO of the up-and-coming proptech provider repeats earlier statements that reservations about technology are unfounded.

“When properly embraced, technology makes one’s job easier, it doesn’t get rid of it,” concludes Cobbold. “For example, by automating administration, you can reclaim more of your time, allowing you to devote more to your business.”

The Top 10 London Postcodes for Buy-to-Let

Published On: August 2, 2017 at 9:21 am

Author: Em Morley

Categories: Landlord News

Tags: buy-to-let property,London,property investment,property investors

Government Publishes Key HMO and Selective Licensing Changes for Rental Properties

Though the majority of the capital offers relatively low rental yields of between 3-4%, there are still some London postcodes that provide landlords with very healthy rental yields…

Estate agent Portico has developed an Interactive Yield Map that gives landlords an indication of the potential income they could earn in all London postcodes.

If you’re considering a property investment in the capital, here are the top 10 London postcodes for buy-to-let this summer:

Barking: 6.4%
Erith: 6.4%
Ilford: 6.1%
Dagenham: 5.9%
Edmonton: 5.8%
Canning Town: 5.7%
Beckton: 5.7%
Romford: 5.6%
Ponders End: 5.6%
Freezywater: 5.6%

Mark Lawrinson, the Regional Director of Portico, has explained why each location is a great bet for investors:

Barking – Zone 4

Highest potential yield: 6.4%

Average two-bedroom house price: £270,000

“Barking has been enjoying time in the spotlight ever since it was named the host borough for the London 2012 Olympics. Since then, a number of renovation projects have been transforming the east London town, most notably the Barking Riverside regeneration project, which is creating a brand new neighbourhood with 10,800 homes on the former power station site.”

Erith – Zone 6

The Top 10 London Postcodes for Buy-to-Let

Highest potential yield: 6.4%

Average two-bedroom house price: £290,000

“Erith is a town next to the River Thames, situated east of Belvedere in Bexley. Its remoteness has kept property prices in the area relatively low, but now a ripple of regeneration is spreading from nearby Abbey Wood and neighbouring Woolwich, two big Crossrail winners.

“Developers are now moving into the area, reviving redevelopment plans for the riverfront area of Erith, renamed the Erith Western Gateway.”

Ilford – Zone 4

Highest potential yield: 6.1%

Average two-bedroom house price: £300,000

“Ilford will be one of the first stops to test the new Crossrail trains as they are introduced along the Liverpool Street to Shenfield line this month. New trains will take residents into central London in 25 minutes and to business hub Canary Wharf in just 17 minutes, making it extremely attractive to renters or homebuyers looking for accessibility and affordability. Though property prices have shot up since the news of Crossrail, the average two-bedroom property still stands at a reasonable £300,000 or £1,100 per calendar month.

“We expect the area to undergo significant regeneration and gentrification over the next five to ten years.”

Dagenham – Zone 5

Highest potential yield: 5.9%

Average two-bedroom house price: £290,000

“Dagenham, like its inner London neighbours Hackney, Shoreditch and Bethnal Green, has changed dramatically in recent years, and there are also further redevelopment plans in the pipeline.

“Within 20 years, some 35,000 new homes will be built in the area, with regeneration expected to create 10,000 new jobs. Furthermore, Crossrail will soon begin operating from nearby Chadwell Heath, making getting in and out of central London quicker and easier. These factors will no doubt attract a new wave of renters and homebuyers to the area.”

Edmonton – Zone 4

Highest potential yield: 5.8%

Average two-bedroom house price: £270,000

“This investment hotspot in north London has big plans for its future; Edmonton Green is set to benefit from a £1.5 billion Meridian Water regeneration scheme, which will eventually deliver 10,000 new homes and 6,700 new jobs on 210 acres of former industrial land on the beautiful banks of the River Lea.

“London Mayor Sadiq Khan declared the scheme a ‘win-win’, because land left derelict would be brought back into use to help solve the capital’s chronic housing shortage, while many of the workforce constructing it would be local residents equipped with the skills as part of apprenticeship and training programmes. Construction on the first 725 of those new homes is now underway.”

Canning Town – Zones 2/3

Highest potential yield: 5.7%

Average two-bedroom house price: £600,000

“Canning Town is one of London’s last affordable areas – and it’s getting a facelift. A £3.7 billion regeneration scheme is building 10,000 new homes and two new town centres, which will help to attract more young professionals to the area who are working in nearby Canary Wharf.

“For those commuting into central London, Custom House, which is just a 20-minute walk away, will be served by the Elizabeth line in 2018.”

Beckton – Zone 3

Highest potential yield: 5.7%

Average two-bedroom house price: £350,000

“Property prices in Beckton have increased by nearly 25% in the last two years, but the average house price still stands well below the London average, at £328,460.

“The area is experiencing significant regeneration, and is located perfectly for those working in the City and Canary Wharf.”

Romford – Zone 6

Highest potential yield: 5.6%

Average two-bedroom house price: £290,000

“Romford, the largest of seven town centres in the London borough of Havering, is a top investment hotspot where landlords are achieving extremely impressive yields. When Crossrail arrives in 2017, it will not only improve Romford’s connectivity to the South East and central London, but also bring with it a multitude of opportunities and exciting developments, no doubt increasing demand for property in the area.”

Ponders End – Zone 5

Highest potential yield: 5.6%

Average two-bedroom house price: £285,000

“We’re seeing an increasing number of people venture further out of London to get more space for their money, and Enfield is definitely a popular choice.

“Ponders End, a district within the borough, has significant potential for redevelopment and is just a 20-minute train ride from London Liverpool Street station. It’s also a proposed Crossrail 2 station, which would really throw the district into the spotlight and hike up property prices in the area.”

10. Freezywater – Zone 6

Highest potential yield: 5.6%

Average two-bedroom house price: £329,995

“Freezywater is another area in Enfield that offers a very healthy rental yield. There’s a high proportion of renters living in the area and a one-bedroom property goes for around £900 per month.

“The area lacks great transport connections, but residents are just a 15-minute walk from Enfield Lock station, which offers direct trains into central London. There’s also a good mix of both houses and flats, making it an attractive area for professional couples and people looking to start a family.”

Although these London postcodes are the best places to invest in the capital nowadays, a recent study revealed which locations have provided the strongest capital gains over the past 20 years: /house-prices-london-boroughs-soar-500/

Where will you invest next?

Camden tenants launch crowdfunding page for fire safety checks

Published On: August 2, 2017 at 9:09 am

Author: Em Morley

Categories: Property News

Tags: fire safety,Grenfell Tower,landlords,tenants

A crowdfunding page has been launched by worried tenants who are looking to pay for independent fire safety checks to be carried out in their properties in North London.

Over 3,000 residents, including many private sector tenants, living on an estate in Camden, were evacuated during June. This was following concern from fire inspectors, who claimed that four tower blocks were at risk.

Fire Safety

Following the Grenfell Tower disaster, both tenants and firefighters are wary of safety issues in high-rise buildings.

In the instance of the estate in Camden, the London Fire Brigade uncovered a number of fire safety issues inside the blocks of the building. An inspection revealed that blocks were wrapped in extremely flammable cladding.

People living on the Chalcots estate were woken in the night during June and told to leave their flats immediately, due to imminent danger.

Now, some six weeks later, tenants are being asked to return by Camden Council, which claimed the properties are now safe following urgent works.

Fears

However, there are still ongoing fears about external cladding and requirements for internal repairs. These include for gas pipes, largely explaining why a number of residents have refused to go back home.

As such, a group of residents who remain worried about their safety at the Swiss Cottage have decided to appoint a legal firm to assist them to commission their own report.

Paper house in fire on a black background concept

Camden tenants launch crowdfunding page for fire safety checks

Robert Kukaj and Sasha Martin, both with families residing in the towers, set up the online donation page, with a target of raising £3,000. Any funds raised over this amount will be donated to Great Ormond Street Hospital.

Mr Kukaj said: ‘We as residents feel that it is not safe to return to our flats as we have seen evidence that these works have not been done properly and to the right standard. We also felt that these works being signed off by different local authorities does not provide the impartiality that you would have if it was done by an approved inspector with no ties to any local authority or government. It is a lot to ask for granted but worth every penny to put people’s minds at ease and to make sure we are not living in death traps.’[1]

Reassurance

A Camden Council spokesman told the press that they had been working alongside residents to reassure them of the safety of the buildings following advice from London Fire Brigade.

The spokesman said: ‘We want to again reassure residents that building control requirements have been met and independently checked. Additionally, and crucially, the London Fire Brigade have checked the works and are happy that we have met the required standard. We know this has been a difficult time for residents and we will continue to make one to one support and advice available.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/8/residents-launch-fundraising-page-to-pay-for-independent-fire-safety-checks