Finn's Newsletter: Summer 2020, Issue No.12

Five essential property management steps for landlords

The UK rental market has shown incredible resilience over the course of lockdown, with the government’s announcement of its stamp duty holiday causing a surge in activity from buy-to-let investors.

Whether it’s your first time letting a property or you’re already an established landlord, we’ve outlined the five essentials steps you need to take to fulfil your obligations and provide quality housing for your tenants.

Inform your lender

If you haven't already been granted permission from your mortgage provider to let your property, you'll need to inform them as they may impose conditions or actions for you to complete.

It's also a good idea to update any existing insurance policies, as specific landlord cover will give you more security should anything go wrong during the tenancy, whilst protecting you when the property's left empty for longer periods of time.

Get your home tenant-ready

From simple tasks like cleaning your property to meeting industry requirements, it's crucial to get your property tenant-ready.

If you have selected a fully-managed package, your lettings agency should take care of items like your Energy Performance Certificate (EPC), gas and electrical safety certification, and inventory for you.

With legislation constantly changing, a fully-managed service ensures your compliance, with these items routinely reviewed and made accessible to your tenants.

This year has seen the introduction of substantial changes within lettings, including for minimum energy efficiency standards (MEES), mandatory electrical safety checks, and the extension of the Tenant Fees Act.

Attract suitable tenants

Void periods can be costly for landlords, with an investment of time and resources needed to find tenants that meet your short or long-term property plans and requirements.

A quick, successful let requires having a winning property marketing strategy that showcases your home's key characteristics and features – which is something we’ve honed over the years for our landlords.

Once you’ve started receiving interest from applicants, it’s important to conduct viewings and credit checks, where you’ll be able to ascertain if they're financially viable.

Safeguard your property

You stand to lose £3,000 by not having the right landlord insurance in place.

Accidental damage is one of the most expensive claims to compensate for, yet 57% of landlords don't even request it as part of their insurance package.

Here are our recommendations for the policy types that you should consider:

Landlords' insurance – first and foremost, you'll want to have a policy that cover items like buildings insurance and accidental damage.

Contents cover – this will depend on if your rental is furnished or unfurnished, with the possibility that your tenants will need prompting to organise a policy for their own possessions.

Landlords' liability – often an added extra for student or social housing, this gives you more security in the event of injury.

Rent Guarantee Insurance (RGI) – for loss of rental income during periods your property is empty or instances of rent arrears.

Home emergency cover – in emergency repair cases, this will help with costs and ensure there's a qualified tradesperson available 24/7.

Property management on a day-to-day basis

Due to COVID-19, one in nine have fallen behind on their household bills, including 1.2 million tenants on rent payments.*

The government's decision to extend the ban on evictions for another four weeks – as well as their introduction of six-month notice periods – will have significant consequences for the country's two million private landlords in the coming months.

Should your tenants face financial difficulty, we can act as the intermediary to identify a resolution and repayment scheme – where appropriate.

Property market surges post-lockdown

Ever since its announcement, the government’s stamp duty holiday has sparked a surge in activity across the country’s property market.

Now, as we head into a new season, we’re seeing 61% increased demand compared to the same time last year – according to Rightmove.

The South East and East of England are the UK’s highest market performers, each up by 70% individually, but across all regions growth in demand is said to be outstripping supply.

Whilst this puts homeowners in an advantageous position with their next sale, it’s not expected to last for much longer, with new listings gradually climbing up as well.

Areas along the southern commuter belt have seen new properties double when compared to the same six-week period in 2019, including for Harlow in Essex, Hertford, Wickford, St Albans and East Grinstead.

An interesting development post-lockdown is the effect of changing buyer priorities on the market, with Zoopla reporting that larger homes are being snapped up the fastest.

Four and five-bed homes are selling in record time at 27 days, which is 31% lower than the same period last year and an obvious response to Brits needing more space coming out of lockdown.

Three-bed properties continue to be the market’s fastest selling property type, taking just over three weeks, on average.

Commenting on these market findings, Rightmove property expert – Miles Shipside – says: “We always knew that the stamp duty holiday was going to be a big incentive for people to get moving this year, and it’s certainly sparked a home-moving frenzy.

“Thousands of sellers are being tempted to come to market for a number of reasons. Firstly, lots of buyers stand to make pretty sizeable savings thanks to the stamp duty holiday – particularly in the southern commuter belt – so now seems as good a time as any to press ahead with home-moving plans.

“We’re also seeing a growing trend of people looking to move out of urban areas and into smaller towns, with homeowners in built-up areas reassessing their housing needs and looking for places with more outside space.

“Lastly, proximity to a station doesn’t seem to be as important as it once was, meaning sellers in these commuter towns are looking to move a little further afield as working from home becomes a more permanent way of life.”

If you’re looking to sell or buy in 2020, book your market valuation to get started.

The eviction ban extension for tenants and landlords

In a move that was intended to “support renters over winter”, Housing Secretary – Robert Jenrick – announced key changes to regulations surrounding tenancy evictions.

The ban on evictions, which has now been extended until the 20th of September, will mark a six-month period in which no tenant has been legally evicted at the height of the pandemic.

From September 21st, it will be a requirement for landlords to provide information on a renter’s financial circumstances in relation to the coronavirus when making possession claims regarding rent arrears.

Alongside this, landlords will now need to provide a notice period of six months when seeking possession of their property. This will apply up to March 2021.

With courts prioritising hearings based on the severity of each individual case, coming to an agreed solution with your tenants would be the preferred approach to take, where rent payments are not being met.

Of course, exceptions have been outlined for the following instances:

• Anti-social behaviour – four weeks’ notice
• Domestic violence – two weeks’ notice
• Rent arrears totalling six months – four weeks’ notice

Could there be a better solution?

Given that the vast majority of private landlords (94%) are renting just one or two properties, this could have significant consequences on income revenue for these individuals.

In a recent letter to the Prime Minister, the National Residential Landlords Association have called for reconsiderations to be made to protect the private rented sector and enable landlords to keep offering accommodation to UK renters.

They wrote that: “failure to provide any direct financial support for the sector during the pandemic means that many landlords will be forced to seek money claims against renters building arrears. This would leave tenants' credit scores in tatters.”

The NRLA put forward the argument that the only way to untangle the conflict with COVID-19 related rent arrears is to offer interest-free, government-guaranteed hardship loans to tenants.

As this has already been introduced in Wales, the NRLA argue that it would be the best solution to “sustain tenancies and remove any risk of eviction as furlough is removed”.

We're doing our utmost to protect and support our landlords and tenants at this time, contact us for more information on how we can help you.

The changing landscape for city office spaces

Fewer than 8% of Brits had experience working remotely at the start of 2020.

Within a matter of weeks, this figure rose considerably as businesses scrambled to meet new demands and challenges, with 46.6% of the country’s professional workforce ‘clocking in’ from home across April and May – rising to 57% in London.

This month, the government will be encouraging more and more firms to return to their offices, addressing a very real concern about the economic toll remote working has had on city centres.

High streets up and down the UK are all but empty of foot traffic, meaning that small businesses will continue to struggle to stay in business over the coming months.

Whilst acknowledging the merits of home working, Dame Carolyn comments on the role the UK’s offices play as “vital drivers” of the economy, suggesting that:

"The costs of office closure are becoming clearer by the day. Some of our busiest city centres resemble ghost towns, missing the usual bustle of passing trade.”

Is remote working here to stay?

It’s estimated that those working from home have racked up an extra 28 hours of monthly overtime during lockdown, which adds up to almost four days’ additional work.

The chief reason for this being that 86% feel it’s a necessity to prove their value to their employers and ultimately keep their jobs.

Although remote working has put a strain on the country’s commercial hubs, with employees equally feeling more workload pressure, there’s an evident shift in mindset amongst professional workers towards flexible opportunities.

Of those asked, only 7% would opt to work full time without any element of remote working.

Compared to 93% who would want at least one day a week from home.

Whether you’re in need of a new home with dedicated office space, or you’d like to find out what commercial properties are available, talk to us.