Year: 2020

Demand for homes to rent has surged back by some 30 per cent in the two weeks to April 14 according to data released by Zoopla.

An extensive piece of research released by the portal company says the impact of Coronavirus has been less pronounced in the lettings market compared to the sales market.

While demand for rental properties fell by more than 55 per cent between March 7 and March 30 there has been a continuation of activity with agents agreeing rental contracts with delayed start dates and, in some cases at least, based on online viewings.

Zoopla predicts that activity levels are likely to rise more quickly in the rental market than the sales market once the lockdown eases, given that the average ‘time to let’ is less than three weeks in usual market conditions, compared to the three months average to complete a sale.

The portal suggests that post-lockdown activity levels will likely rise and match previous years’ levels in the typically busier seasonal periods in Q3 and Q4, meaning that the total number of moves within the rental sector will be approximately 25 per cent lower than in 2019.

The Zoopla rental index shows that the annual rate of UK rental growth flattened in March – reflective, it says, of seasonal trends rather than ramifications of the lockdown. Rents were up 2.4 per cent on the year, compared to 2.5 per cent annual growth in February and the 2.3 per cent recorded in December 2019.

Despite the slight slowdown in growth, rental growth has been on a largely upward trajectory since March 2017 amid increased demand and shrinking supply.

“The flexibility of the rental market is one of the key factors which has allowed activity to bounce back more quickly than other parts of the property market” says Zoopla research head Gráinne Gilmore.

“As with the whole housing market however, activity levels and rental growth will likely be closely aligned to the economic landscape of the UK once the lockdown eases and the immediate impact of COVID-19 starts to recede” she adds.

“If the responses to COVID-19 contribute to a rise in unemployment, as some official bodies have forecast, this will reduce the scope for any additional growth in rents. We expect growth to moderate this year, but to remain in positive territory.”

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New guidance outlining the need for Energy Performance Certificates (EPCs) has been published by the government.

The guidance specifies that the requirement for landlords to obtain an Energy Performance Certificate (EPC) before they let the property out remains in place. Landlords should make sure this can be conducted in a safe manner, and should also ensure they follow the latest government guidance on moving home during the coronavirus pandemic.

Delaying a transaction

The government guidance on EPCs says that where a property is occupied, parties must endeavour to agree that the transaction can be delayed, so that an EPC assessment can proceed when stay-at-home measures to fight coronavirus (COVID-19) are no longer in place.

If moving is unavoidable and the parties are unable to reach an agreement to delay, and a valid EPC is not available from the register, an assessment may need to be conducted. In these circumstances, again government guidelines on staying away from others to minimise the spread of the virus must be followed alongside the guidance for carrying out work in people’s homes.

EPC assessments can continue in cases where your property is vacant.

The guidance is also clear that no assessments should take place if any person in the property is showing symptoms, self-isolating or being shielded – if securing an EPC is critical landlords should seek to reschedule the appointment when it is safe to do so in accordance with Government guidelines on staying away from others.

Minimum Energy Efficiency Requirements for PRS homes

Since 2018 landlords in England and Wales have been unable to let their property to new tenants unless it has a minimum energy efficiency rating of an E (unless exempted) on its #EPC certificate. This law was extended to apply to existing tenancies on 1st April 2020.

• If you’re a landlord looking for some advice on an issue relating to your lettings and coronavirus, check out our guidance for landlords here, which covers financial support, inspections and much more.

Written by Victoria Barker

Blog Post from Residential Landlords Association

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Gas and electrical safety certificates should be extended for six months to cover for the impact of the Coronavirus.

The call comes after a survey showing that 38 per cent of landlords are struggling to source maintenance contractors to undertake required work and just over a third are having difficulties undertaking work in their properties because of either themselves, or their tenants, self-isolating.

With tenants also concerned about letting people into their rental properties, the National Residential Landlords Association is calling for gas and electrical safety certificates expiring over the six month period from April 1 to be extended for six months.

This would be in line with the government’s new approach to MOT certificates.

The extension would provide the time that landlords need to ensure routine, but legally binding checks, can take place at a point when the danger of spreading the virus in rental properties is at least reduced.

The NRLA is also calling on the government to delay until next year the introduction of new routine Electrical Installation Condition Reports which are due to come into force on July 1.

These will involve inspectors checking the wiring in all rooms of a property, possibly taking a number of hours, making it impossible for tenants to properly isolate.

Ben Beadle, chief executive of the NRLA, says: “Whilst landlords should ensure that urgent work to ensure properties are safe for tenants is carried out, routine maintenance and checks need to be delayed to prevent the spread of Coronavirus.

“Extending the life of gas and electrical safety certificates will protect landlords and tenants from unnecessary contact and provide landlords with legal protection from enforcement action where they are simply unable to get such work undertaken through no fault of their own.”

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Student bodies want letting agents to acknowledge that many students have lost their incomes and have been forced to return to their parents – and so should not have to pay for accommodation they are no longer using.

The letter comes from the Northampton Student Landlord Network and the town’s student union body, and claims that many students who receive the minimum amount of student finance rely on part-time work which no longer exists – they cannot pay their rent as a result, the bodies say.

The letter, published on the student union website and in the local press in the town, says:

Dear private landlords, lettings agents and students,

We are writing to address some of the issues which have arisen due to the Covid-19 outbreak regarding private-sector housing.

The University of Northampton Students’ Union recognises that this is an extremely uncertain time and it is vital to take the appropriate precautions to ensure the safety of everybody. Covid-19 has affected everyone in some way whether that’s through illness, having to self-isolate, loss of job or financial difficulty, it is more important than ever to support one another through this difficult period.

Covid-19 has forced numerous businesses to close and therefore many of our students are struggling financially due to not being able to work. In particular those students who receive the minimum amount of student finance, many of them rely on part-time work to be able to pay for their accommodation and to stay a-float.

We have also had many concerns from international students, those are classed as vulnerable who are needing to self-isolate for a minimum of 12 weeks and students without any financial support.

This is an incredibly challenging time for students who fall in to these categories.

With all of this in mind, we are asking landlords and lettings agents to consider the following:

1: Refund students any underspent bills – while we do understand that students in private-sector accommodation have signed their contracts and therefore have a legal obligation to pay their rent, we are asking for you to refund students any money on bills that they have not used. This will take some financial pressure off students as well as showing that we recognise the difficulties students are currently experiencing.

2: Allow students moving in to properties for the 2020/2021 academic year to pay their summer rent rate until the University of Northampton resumes face-to-face teaching – Due to the current uncertainty, we are asking landlords to consider extending the summer retainer period until restrictions are lifted. Whilst this is a while away, it would act to discourage students from relocating if it is still deemed unsafe to do so.

We do realise that it is a big ask and it does have some financial implications on yourselves however students should not have to pay for something they are not using.

You, the landlords, rely on the University operating to run your business each academic year including when students are on their end of term holiday. We are asking you to support your tenants by relieving the financial strain but also looking to support the national drive to protect the NHS.

These proposed changes aren’t unique to Northampton, Universities across the country are addressing this issue and contacting landlords to make changes which are in the students’ best interests. We have also been in contact with National Union Students who have written to National Residential Landlord Association about their concerns and are now raising it with the Competition and Market Authority to take the concerns further.

We ask that you the landlords and letting agents, please consider the support the Government is offering including the mortgage holiday scheme. If the changes are not possible due to your own circumstance, we ask that you have that conversation with your tenants.

We hope that you are all managing to stay safe in this current climate and we look forward to your response.

Yours Sincerely, Kathryn Baker, Vice-President Welfare, University of Northampton Students’ Union

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The private equity firm that snapped up Zoopla Property Group two years ago has revealed that it’s one of two companies investing $1 billion in Airbnb.

Silver Lake paid £2.2 billion for ZPG in May 2018 and also already invests in high-profile tech-based companies including Tesla and Skype.

Now, along with investment business Sixth Street Partners, Silver Lake is pumping a combined $1 billion into Airbnb.

Airbnb chief executive Brian Chesky says: “The desire to connect and travel is an enduring human truth that’s only been reinforced during our time apart. But the way this manifests will evolve as the world changes. We’ll see a new flexibility in how people live and work, which means they won’t have to be tethered to one location.

“And with an emerging interest in travel that’s closer to home, our customers will look to nearby places to visit, and for local experiences to take part in.”

Chesky says Airbnb will in future focus on longer-term stays. “From students needing housing during school, to people on extended work assignments, Airbnb is a place where many have found longer-term housing. In the future, dreams of living in another community will become a growing reality—in homes that come with the benefits of Airbnb.”

Silver Lake co-chief executive Egon Durban says: “Airbnb’s revolutionary platform has transformed how people travel, unlocking one-of-a-kind stays and experiences at scale. Airbnb’s diverse, global, and resilient business model is particularly well suited to prosper as the world inevitably recovers and we all get back out to experience it.”

Silver Lake describes itself as “the global leader in technology investing” with over $43 billion in combined assets under management and committed capital and a team of approximately 100 investment and operating professionals located in Silicon Valley, New York, London and Hong Kong.

Silver Lake’s portfolio of investments collectively generates more than $230 billion of revenue annually and employs 370,000 people globally.

Blog Post from Letting Agent Today

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Consultancy firm Dataloft analysed 250,000 historic rental transactions to pinpoint which urban areas will see the most tenancies come up for renewal, and therefore see likely price and terms renegotiation.
A leading property market information firm has identified the areas of England where the most tenancy renewals are due to take place during the next three months as the Coronavirus pandemic rages on.

Tenants who are about to renew their tenancies are likely to either ask for rent reductions or other arrangements required to help them weather reduced income or unemployment.

The research has been completed by DataLoft showing how vulnerable cities are around the UK to the crisis based on the number of tenants due to renew their tenancies during the second quarter of the year.

The pandemic has arrived at a crucial period during the annual rental market cycle. Just under a third (32%) of tenancies are renewed during the second quarter of each year on average because lease renewals are not distributed evenly across the year.

Tenancy renewal volumes also vary significantly from region to region during April, May and June.

London is the least exposed (24% of leases renew) while Wales is the most exposed (44%) followed by Yorkshire and the Humber and the SW (both 42%) and the East Midlands (41%).

Landlords
“It looks as though landlords are more protected in London than other parts of the UK because the peak in lease expiries occurs in Q3 rather than Q2 and there is a reasonable chance of some normality having returned by then,” says Dataloft.

“The London activity peak in the rental market is driven by the calendar for graduate employment starts and academic term dates.

“There is a real possibility that graduate recruitment will be deferred or reduced this year. It is also possible that the new student intake will be affected too, especially if overseas student numbers fall.”

Dataloft analysed some 250,000 rental transactions to produce the research.

Blog Post from Landlord Zone

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Many PRS landlords are ‘jumping ship’ because of the surfeit of imposed regulations, tax changes and more costs reducing their profits, even potential investors are deciding against joining the sector; all of which has impacted on the availability of rented homes at an alarming rate throughout the UK.

Obviously the fall in affordable rental housing stock is not helping councils in their fight against homelessness and simply cannot cope with demand, leaving people with no roof over their heads and having to sleep on the streets.

Despite introducing the government’s Homelessness Reduction Act (HRA) which came into force in April 2018, around 38% of people who asked their council for help in finding them cheap housing, either had no option but to become homeless or remained on the streets as the authorities did not have sufficient affordable housing stock.

Crisis the homelessness charity is stating that its latest report found that nearly 4 out of 10 people are being let down when asking authorities to be housed in cheaper accommodation.

The research was based on the charity’s 984 strong survey and in-depth interviews with 89 homeless people and shows how the HRA has performed since 2018.

The HRA was introduced to stop people from becoming homeless and the report does show that there has been an increase of people with housing difficulties being able to access help.

However there is just not enough supply which coupled together with rising rents has put this out of reach of many people whose wages and or benefits have been outstripped by the increase in housing costs.

Crisis is saying that more must be done to make sure that the HRA will substantially reduce and finally end homelessness throughout England.

Crisis chief executive, John Sparkes, said: “It’s deeply distressing that, across England, councils are being forced to leave the people they are trying to help on the streets or drifting from sofa to sofa – all because they cannot find somewhere safe and affordable for them to live. The HRA has made some good progress in preventing people from becoming homeless, but it’s worrying to see that it’s being constrained by a chronic lack of housing and cuts to housing benefit.

“The HRA can be at the heart of ending homelessness for good, as this report shows, but this is only possible if councils are properly resourced and have the tools, they need to help people leave homelessness behind for good.

“It’s vital that the government gets to grips with the root causes pushing people into homelessness in the first place, this means ensuring more social homes are built across the country and that housing benefit is restored to truly cover the cost of rent. Only when these measures are in place will we be able to unleash the full potential of the HRA.”

Blog Post from PIMS

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The government’s new measure to help tenants because of the Covoid-19 crisis, by closing down all eviction processes for three months, is not enough according to an estate agent and mortgage broker that wants the government to cover 80% of small private landlords salaries, in case of a rental arrears ‘spike’.

Last week it was announced that all possessions’ activity would be frozen for an initial period of three months, therefore existing possession claims will not be processed through the Courts and no new claims can be entered during this period.

Managing Director of the firm Mark Pilling, said: “Eviction is always a last resort, never more so than with a deadly pandemic on the loose.

“While a blanket freeze on all possessions activity will protect tenants in the short term, it is bound to lead to an accumulation of arrears that will be all the harder to deal with once the freeze is lifted.

“If there seem to be no consequences to non-payment, some struggling tenants will naturally prioritise other bills, and will be more likely to ignore attempts to communicate with them to manage the situation.

“A three-month ban on possessions activity will result in even longer spells without rental income – possibly six months or more of state-enforced void periods.

“Payment holidays on buy-to-let mortgages will be of limited help to landlords who in many cases rely on income from a small number of properties. If one or more of these is not generating an income for an extended period, it could cause families real financial difficulty.

“Rental income is subject to income tax – to say nothing of the Stamp Duty premium paid by buy-to-let landlords. It seems only fair that it should be subject to the same Government guarantees as other income affected by the restrictions currently in place.”

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With over a million new applications for Universal Credit caused by the personal economic effects cause by the Coronavirus pandemic, a trade body advises landlords to get up to speed to understand the Universal Credit system; in doing so they can then help their tenants who are applying for benefits by working together to avoid the considerable risk of incurring rental arrears.

The DWP has recently reported that just under a million people have applied for the benefits, and the creaking system has had its fair share of administration and logistical problems because of the flood of new applicants.

A trade body warns that thousands of landlords will now have to deal with their tenants who had not previously needed to claim benefits.

A spokesperson for the trade body said: “As the true impact of Coronavirus takes hold, many people who have never previously needed to rely on the welfare system have to apply for Universal Credit. Many will be anxious not only due to the current situation but because of the criticism, Universal Credit has received since its introduction. The good news is that more resources have been deployed to local authorities to help claimants, and measures such as immediate access to Advance Payments, increases to Universal Credit and raising the Local Housing Allowance rate to the 30th percentile of market rents from April, are being put in place.

“We have had a surge of calls from landlords and letting agents asking advice about how the process works and if they should apply for an Alternative Payment Arrangement for their tenant, which is where the housing element of UC goes straight to the landlord to cover the cost of rent.”

The trade body believes there are four important steps that landlords must undertake to help their tenants who are applying for Universal Credit.

1) Keep in contact with and support tenants if they are applying for Universal Credit, as it is more than likely they have either been made redundant or had a drop in earnings. They will no doubt be extremely worried about losing their home.

As landlords are able to consider a rent reduction if the housing benefit is lower than the monthly rent, because some form of contribution towards the rent far outweighs receiving no rent at all.

2) If a tenant has to claim benefits because of the Coronavirus then the landlord will need to provide a letter stating the monthly rent, the address of the property the tenant lives in and when the tenancy first started to help them qualify for the Universal Credit housing allowance.

3) It is a good idea for a landlord to find out from the tenant their starting date for their benefit entitlement, this will help establish how it correlates with the Tenancy Agreement.

4) Universal Credit payments are made once a month and a tenant may prefer for landlord to receive the housing element directly . This needs to be discussed between landlords and tenants if this course of action is agreeable, and if so the landlord will need to fill out a UC-47 form for an Alternative Payments Agreement with the DWP.

Blog Post from PIMS

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