What should be the new PM’s property priorities?

The names are in. Theresa May stepped down as the UK Prime Minister on 7 June and 10 MPs are now in the running to be the next leader of the Conservative party. These include a couple with housing credentials: ex-housing secretary Sajid Javid and ex-housing minister Dominic Raab.

So what do people want to see for the property industry from the new PM and his or her new cabinet? Kevin Hollinrake, Conservative MP for Thirsk and Malton, told the press that he is backing Michael Gove for the leadership. He said that the new Prime Minister needs to take a more interventionist approach to housing. And Conservative Lord Gary Porter, said that finishing off reforms to the Right to Buy is “top of his list” of priorities. He said it is crucial that Right to Buy discounts stimulate demand, and that capital receipts are kept by councils and reinvested in stock.

At Ringley we have our own wish list – and a few questions that we would like to see answered once the new PM is in place.

Do London and the South East have lessons to learn from the successful delivery of build to rent in the north of England?

First, we would like to know why Build to Rent is being most successfully delivered in the north of England? This is great news for northern towns and cities but we’d also like to see the government coming up with an effective policy to resolve housing affordability issues in London and the South East.

Also tied to affordability, we would like to see some thought given to whether space planning for residential property should be based on floor plates or volumetric planning?  This would allow for smaller, cheaper units but could include sleeping decks and other imaginative solutions to maximise the use of space. We would also love to see a new planning blueprint for high streets, so that we get uniformity in change of use, not the existing mess of different rules that effectively devalues properties.

Beyond property, other key priorities as we see it, are to:

  • create care incentives for families to take more responsibility for looking after their own elderly relations;
  • shorten degrees to a standard two years not three, to make higher education more affordable and get people work ready; and
  • increase the flexibility of apprenticeships and enable them to start on a one-day-per-week basis from age 14 for those not taking 8+ GCSEs, so that young people are work ready, not work shy.

We would also like to see more employers encouraged to take on apprentices as we do at Ringley.

These are some of the areas we would like the government to pay attention to but we’d love to hear your ideas too, so please leave a comment below.

Housing crisis – is a change to volumetric planning an answer?

Static wage inflation, rising rents, stagnating house price growth, and a house building industry propped up by overseas buyers and help to buy along with an onslaught of legislation and taxation on private landlords are not helping us build enough homes to solve the housing crisis.   So is volumetric planning the answer?

In the UK .minimum space standards look at the floor area, not the living space.  The only way to avoid these .minimum space standards is to depart from the C3 use class which itself in the name itself (C3 – dwelling house) is stuck back in yesteryear and go for use class C1 – hotels, boarding houses, guesthouses.  Ordinarily use class C1 is for hotels and the nonsense that you will find is that rather than develop a format that supports compact living or as the name of developer ‘packaged living’ so nicely describes.   The buzz word co-living (where you build in mass and downsize the self-contained space whilst providing community space so people can live outside the home) seems here to stay, it is a solution that is accepted in leading European cities such as Amsterdam and in Asia with Korea and Japan being exemplars.

A developer wanting to provide an alternative modern way of living has to either face a sui genesis application where prospects of town planners getting their heads around it, or having precedents or planning  guidance to follow mean a more drawn out application process than normal, or take the easy route and go for C1 which means paying vat on rent and risk potential criticism or planning enforcement if longer stayed proves that the C1 use is actually C3 in disguise.

Could the solution be to consider space in volumetric terms?  Innovation and the availability of fixtures and fittings means that smaller spaces can be used so much more interestingly and creatively than ever before. 

If for example the traditional 2.4m high unit was increased to 3.7m the init size could easily be reduced from the current space standards minimum of 28sqm to 20sqm.  And surely a well designed galleried study over a kitchen and sleeping deck on top of part of the lounge is easier to keep tidy and inviting to visitors than a single studio flat with everything on view.  

Building safety back in the spotlight

Once again a residential block has gone up in flames. This time – thankfully – no one was killed. But it took 100 firefighters and 15 fire engines from the London Fire Brigade to get the huge blaze, at a block in Barking, under control. It seems that wooden balconies – which residents had previously raised concerns about – were responsible for spreading the fire at a terrifying speed and, once again, questions are being asked about the safety of construction materials and the way they are used on residential buildings.

Reform of the building safety regime is out for consultation.

So it seems ironic that on Friday the government published its new consultation Building a safer future: proposals for reform of the building safety regulatory system. The document follows up on the recommendations made by Dame Judith Hackitt’s independent Review of Building Regulations and Fire Safety and looks for ways to make buildings safer for residents.

Five key areas are up for discussion:

  • Scope for a new building safety regime which goes further than Dame Judith recommended, covering all multi-occupied residential buildings of 18 metres or more;
  • The concept of ‘dutyholders’, who will have clear responsibilities for building design, construction and occupation;
  • Proposals to ensure that residents are given better information about their buildings so they can take part in decisions about safety, and have clear and quick routes of escalation for their concerns if they are not addressed;
  • Plans for a new building safety regulator; and
  • Proposals to strengthen regulation of construction products.

The proposed system will be underpinned by strengthened enforcement and sanctions and, where necessary, effective punishments for non-compliance.

This is all too little, too late for residents of the Barking block who will need rehousing until their homes can be brought back into a habitable state. But this fire highlights once again the holes that exist in our building safety regime. It is vitally important that the whole issue is closely scrutinised and that effective improvements are made. So if you want to have your say and respond to the consultation, you can read the document in full and complete the online survey at https://bit.ly/2Wt1vIb You have until the end of July to make your voice heard.

How to sell your flat – fast!

If you want to sell your flat but it feels as if it’s taking forever, you’re not alone. New research from Rightmove found that more than a quarter of properties currently for sale have been on the market for at least six months. Stamp Duty changes, mortgage restrictions and high prices, to say nothing of Brexit uncertainty, are making the market sluggish.

Want to sell your flat? Rightmove has some tips for a quick sale.

The property website found that 28% of properties have been on its books for six months or more, while 8% of properties have been listed for at least a year. So if you can’t sell your flat, then overall demand in your area could be low due to local market conditions. However, if other flats are selling and yours isn’t, Rightmove’s Miles Shipside says you either have a property with limited appeal or the price is too high.

So before you give up and take your flat off the market, here are eight tips from Miles to give your home that all-important kerb appeal and sell your flat – fast. 

Don’t rush to put your home on the market –The majority of properties will receive 70% of interest in the first two weeks, so know who you want to sell to and make sure you have at least five good quality photos, a floor-plan and a carefully written description of the property before it is listed.

Give the best first impression – First impressions really can make or break a deal. Anyone coming to the door will make an initial assessment before they’ve even walked inside. So if the exterior of your block or the common areas are due for a fresh coat of paint, wait before putting your flat on the market.

Use the professionals – Don’t just take a few snaps on your phone. If you’re able to use a photographer, or your agent can offer one to take pictures of your home, then take the opportunity to make sure buyers looking online or in estate agents’ windows see your flat at its best.

Clear the clutter – Help buyers picture themselves living in your home. That’s hard to do if your possessions are everywhere, so de-clutter your flat and let potential buyers imagine themselves making it their own.

Hide the litter tray – Pets and property viewings are not always a good  mix. So make sure yours are out of sight when potential buyers are around.

Listen to advice –Estate agents may not give you the advice you want to hear when you’re preparing your home for sale, but it may be the advice you need.

DIY viewings aren’t always the best option – It can sometimes be hard to have the owner in the property when buyers are taking a look around. It may be better to go out and leave your agent to it. After all, that’s what you’re paying them for.

Plan your price – Researching how much you can reasonably expect for a flat in your area, pricing your home competitively and being prepared to negotiate is more likely to shift the odds of selling in your favour.

And finally, a tip from Ringley. A great property manager makes all the difference to how happy your buyer’s block living experience will be, so don’t forget to give us a mention if you’re happy with our service. It could make all the difference.

Good luck!

GDPR one year on

The world of property management is a complex one crossing the relationships of the freeholder, management companies, property owners, who then may themselves be landlords and their sub-tenants.  Along with the role of managing agent comes the expectation that things can just get done without some participation from owners and residents on site.  Of course, this challenge is exaggerated somewhat more when there is no concierge or staff on site. 

Below is an advice note for Clients, many of whom are directors of management companies, so are not exempt from being treated as a business when dealing with residents and owners on site.

Put simply there are 5 reasons why you may contact someone.  These are:

(a) Consent: the individual has given clear consent for you to process their personal data for a specific purpose.
(b) Contract: the processing is necessary for a contract you have with the individual, or because they have asked you to take specific steps before entering into a contract.
(c) Legal obligation: the processing is necessary for you to comply with the law (not including contractual obligations).
(d) Vital interests: the processing is necessary to protect someone’s life.
(e) Public task: the processing is necessary for you to perform a task in the public interest or for your official functions, and the task or function has a clear basis in law.
(f) Legitimate interests: the processing is necessary for your legitimate interests or the legitimate interests of a third party unless there is a good reason to protect the individual’s personal data which overrides those legitimate interests. (This cannot apply if you are a public authority processing data to perform your official tasks.)

As a freeholder or management company director arguably there is a contract in place.  The lease or transfer document for houses creates a contractual reason why communicating with an owner should occur.  Added to that there is the legitimate interest clause that covers situations where…..

And, then there is the …. clause to rely on in an emergency.

What is important, is that when choosing to communicate by email (as opposed to post or hand delivering documents) that you know when you obtained someone email address and what they thought they were giving it to you for at that time.  For example: if someone gave you an email address to consider joining an RTM (right to manage) group but then did not join up, arguably the right for you to use that email address would expire when the purpose for which it was given has ended.

The biggest risk is intentionally or accidentally exposing someone’s email address to another party involuntarily.  This is easily done as in the old days we all used to Cc owners on site.  Now quite clearly unless you can prove that the person giving their email address agreed to this Bcc is the only realistic option.  Along with a note to let people know that others have been Bcc’d for fear of people simply thinking that you forgot to copy everyone else in.  

For communications between directors (where only directors are involved) then Cc would be appropriate.  

Over the year we have received three GDPR complaints.  One where the persons email was exposed by the client in a residents group; another where an owner wished to receive some types of communication – but not others…. this is a very tricky one and almost impossible to police.  And, a third where despite reporting an urgent repair wanted the owner wanted to take no part in being contactable to let the contractor into the building.  Tricky, as the client did not want to foot the expense of paying for office staff attendance either.    

Much has changed in the way we operate at Ringley to deal with this.  We now record the date and time a person gives us their email address.  Every time a member of staff first sends an email out to a person they have to categorise which of the 4 allowable reasons they are relying on as authority to do so.  We also now Bcc groups and include a message explaining why. 

Our over-cautious approach has caused a little upset but not too much – for example where a directors email is sitting on a stray record card, not an owners record card then the system will detect that their email does not appear to actually be a directors email and Bcc all directors for safety.  We believe our data clean up efforts are pretty much complete and our Customer Care team continues to classify all new email addresses put into the system daily.

GDPR has also affected the way that owners can log into the Gateway so as a reminder if you are experiencing a problem this will be because either we do not have your email address correctly assigned to an owners record card, or we have not assigned your email as an ‘owners’ email address.      

Sites, where sub-letting is not controlled by the lease, are problematic as in theory we have to rely on good spirited community ethics and the legitimate interest clause to try to ensure we can engage the many many residents in sublet properties in a community-driven agenda.

Right to rent update

Earlier this month, the Government issued new guidance on right to rent checks post-Brexit. Like most things Brexit-related, there has been a lot of uncertainty about what will happen next. Landlords and lettings agents are rightly confused as to what their rights and responsibilities will be once the UK leaves the EU later this year. In response, the Home Office has now confirmed that there will be no changes made to existing legislation until 1 January 2021.

Under the law as it stands, anyone letting a property must check that prospective tenants have the legal right to rent a home before a new tenancy agreement is signed.

Until 1 January 2021 EU, EEA and Swiss citizens will continue to be able to prove their right to rent in the UK as they do now, for example by showing their passport or national identity card.

There will be no change to the way EU, EEA and Swiss citizens prove their right to rent until 1 January 2021. This remains the same if the UK leaves the EU with or without a deal. Letting agents and landlords do not need to check if new EEA and Swiss tenants arrived before or after the UK left the EU, or if they have status under the EU Settlement Scheme or European temporary leave to remain. Nor will they need to retrospectively check the status of EU, EEA or Swiss tenants or their family members who entered into a tenancy agreement before 1 January 2021.

Irish citizens will continue to have the right to rent in the UK and prove their right to rent as they do now, for example by using their passport.

However, the Home Office states that letting agents and landlords should continue to conduct right to rent checks on all prospective tenants to comply with the Code of practice on illegal immigrants and private rented accommodation and the Code of practice for landlords: avoiding unlawful discrimination.

As is currently the case, in order for a landlord to obtain a statutory excuse from a civil penalty when letting to the non-EEA family member of an EU, EEA or Swiss citizen, the prospective tenant will need to show Home Office issued documentation as set out in the legislation and guidance.

So watch out for new guidance on how to carry out right to rent checks from 1 January 2021, which will be published in due course. In the meantime, go to the government website at gov.uk which has plenty of useful links and more information on right to rent checks.

Section 21: Finding the right balance

With the introduction of more regulation, reductions in tax relief on mortgage interest and 3% Stamp Duty on buy-to-let properties, landlords are really under pressure. Add Section 21 changes into the mix and there is a real risk that, having lit the touch paper, all the government has to do is stand well back and watch the rental market go down in flames.

This may be an exaggeration but according to a recent survey carried out by Landlord Action and reported in yesterday’s Landlord Today, more than a third (38%) of buy-to-let landlords will consider offloading properties if the government axes Section 21 ‘no fault’ evictions. A further 33% said they would only continue being a landlord if “significant changes” are made  to Section 8.

The study also found that 70% of landlords would be less willing to consider a longer-term tenancy if Section 21 was no longer available to them, while 85% said they would be more selective with their choice of tenant. 

This is serious. The government is attempting to reform the private rental sector to help tenants but is running the risk of alienating the very landlords that people rely on to provide their homes.

In response, today there has been a new call on the government to rethink its plans to change the Section 21 eviction process. The founder of Landlord Action, Paul Shamplina, has written to housing minister Heather Wheeler, inviting her to gain a greater understanding of the possession process before making drastic reforms by attending an eviction with him.  In formulating policy and new legislation it is vitally important that any reforms present equal opportunity for everyone operating and living in the private rental sector.

With 85% of landlords telling the National Landlords Association in a recent poll that they would be unlikely to vote for any party proposing to remove Section 21, for the minister’s sake let’s hope she is in listening mode.

Section 21 changes: what’s the problem?

On 16 April this blog flagged up government plans to scrap “no-fault” evictions. The change proposed to the Housing Act 1988 means landlords will always need to give tenants a reason for ending a tenancy, such as breach of contract or wanting to sell the property. We also drew attention to the fact that the government needs to show caution if this decision, by putting tenants’ interests first, is not to have unforeseen consequences.

In fact, the results of scrapping Section 21 are not ‘unforeseen’ at all. If the proposed change is not carefully thought through and properly managed, we predict smaller landlords leaving the rental market in favour of less troublesome investments, shrinking the available rental stock as a result.

So why has the government chosen not to introduce three- year tenancies but now seeks to introduce never-ending agreements or contracts that can only end using protracted court eviction processes and proving fault? Many landlords feel more secure in renting their properties knowing that they can get to know their tenants during the first year of their tenancy and have a straightforward way out using Section 21 (a non-adversarial, no-fault process) should any kind of nuisance, behaviour or problem with late payment start to rear its head.  Housing Associations also use a one year contract before they grant long term tenancies for the very same reasons. 

Richard Lambert urges the government to look to Scotland, which scrapped no fault evictions in 2017.

The National Landlord’s Association (NLA) has been quick to slam the proposal, arguing that Section 21 “has become a backstop to overcome the ineffective Section 8 process”. Richard Lambert, CEO of the NLA, talking to Landlord Today earlier this month, said: “Landlords currently have little choice but to use Section 21. They have no confidence in the ability or the capacity of the courts to deal with possession claims quickly and surely, regardless of the strength of the landlord’s case”.

Lambert suggests that before making any major decisions, the government should look to Scotland, which outlawed Section 33 notices (equivalent to Section 21) in December 2017. Scottish landlords were just as resistant to the change as their English counterparts but the predictions of disaster have not materialised, probably due in large part to the fact that the court process was reformed in advance of the Section 33 changes. With Wales also expected to following Scotland’s lead, it is vital that the law makers tread carefully. As Richard Lambert says:  “If the government introduces yet another piece of badly thought-out legislation, we guarantee there will be chaos.” We wholeheartedly agree with that.

Tomorrow’s blog will take a closer look at what could be done to make any new proposals work for tenants AND landlords.

Dangerous cladding will be replaced on private blocks – at last

Dangerous ACM cladding like the type used on Grenfell Tower is finally to be replaced on private blocks

Leaseholders in the 156 private blocks around the country with dangerous Grenfell-style cladding, received the good news last week that the government is to stump up £200 million to pay for it to be replaced. Building owners now have three months to access the fund. The row over who should pay for new cladding on private blocks has rumbled on for almost two years, since the Grenfell fire in June 2017 revealed the fatal flaws of ACM coverings on high rise blocks.

What it also revealed – to the public as well as to those already in the know – is the conundrum at the heart of leasehold: which is that he who pays the piper, doesn’t necessarily call the tune. Or in other words, the flat owners who pay the service charge are not always involved in the decisions that are taken about their blocks. This frequently applies as much to the placement of insurance and the appointment of maintenance contractors as it does to decisions around the specification of building materials. However, flat owners are not building experts. They have to rely on their property managers to do the right thing and involve residents in decision making wherever possible. It is important that they communicate the thinking behind the choices that are made, in order to ensure the best outcomes for residents as well as landlords.

When it comes to cladding – and other major building components – neither property managers nor residents have an input first time round. Those decisions are down to architects and developers who, in turn, must adhere to the building regulations. The choice of replacement cladding will now be under scrutiny from all sides and the government has already told the leasehold sector that the funding announced last week is “a one-time only offer”.  At the last count, there were 156 private blocks around the country still in need of remediation. With £200 million on offer, it’s not hard to do the maths. Price, as always, will be a factor in determining which products are most appropriate.

The other interesting point to note is that buried in the small print of the government’s statement are these words: “As a condition of funding, we will require the building owner to take reasonable steps to recover the costs from those responsible for the presence of the unsafe cladding”. So watch this space – this story isn’t over yet.

Government announces; section 21’s set to be axed for UK landlords.

The government has decided to take action and abolish Landlords ability to serve a section 21 notice. This has come in light of many claims from various tenant support groups, suggesting that 46% of tenants received a notice to leave the property within 6 months.

Removal of section 21 could cause landlords to leave the already struggling property market and would mean many landlords wanting to rent out their property short term will no longer be able to do so, leaving them no choice but to rent indefinitely Unless sufficient grounds were given, of a similar kind to those that have been issued in Scotland.

As of December 2017, Scottish landlords were no longer allowed to serve section 33’s (their version of a section 21) for a no-fault possession, however the government have added a few extra grounds for possession if a landlord has “reasonable cause” for example, needing to sell, refurbish or move back in. Scotland now has open-ended tenancies meaning there is no end date, like the “assured tenancy” and it’s looking like it will be that way here also.

The end of the section 21 comes after many campaigns from various organisations claiming that it causes tenants to ‘live in fear’.

Many tenants and support groups see this as a victory, however, this abolishment will more than likely lead to landlords driving up the cost rent causing tenants to suffer as a result. This will also lead to Landlords that ‘need’ their properties back to cause an even larger decline in the already diminishing housing stock unless additional provisions are put in place. In reality, the government needs to listen to landlords and give them the ability to obtain their property back when ‘needed’ as this is what happens the majority of times anyway.