Parties promise big on housing – but can they deliver?

Training will be vital to tackle skills shortages but more is needed if we are to solve the housing crisis

This morning the two main political parties both made election commitments to deliver much-needed housing.  Labour’s manifesto promises £75bn to deliver the biggest social housebuilding programme since the 1960s. The party has set itself the task of providing 100,000 council houses a year by 2024  – a tall order in anybody’s book.

The Conservatives are also promising major change –   announcing a number of policies alongside their million homes pledge, which includes an overhaul of the planning system.

In contrast to Labour, the Tories would not use public money to build more homes, but instead, plan to promote policies encouraging the private sector to deliver the housing stock we need. Today’s announcements included the promise of a new mortgage with long-term fixed rates and a 5% deposit to help renters get on the property ladder. They also pledged to start a new scheme giving first-time buyers a 30% discount on new homes in their area.

Yesterday, the Liberal Democrats promised to build 300,000 homes a year by 2024, including 100,000 social homes. And the Green Party manifesto also promises an extra 100,000 council houses a year.

These pledges are welcome. We are well-aware that the country faces an ongoing housing crisis with too few affordable houses and property prices putting a first home out of reach for many young people. However, the question has to be asked, how is all this to be achieved?

Labour’s Angela Rayner may have got hackles rising in the building trades this morning as she asserted that it doesn’t take long to train to be a plasterer. A six -month training course is all that’s needed, she said. This is debatable but what is certain is that the construction industry is facing serious skills shortages that are likely to get worse post-Brexit. Labour’s pledge to train more workers is one solution but it is likely to take a lot longer than six months to get boots on the ground.

Whichever party ends up forming the next government, if serious numbers of homes are to be built they will need to get to grips with not only skills shortages but with a range of other long-neglected issues. Re-skilling and streamlining planning and building control will be vital, as is a shift towards modular construction to take the heat out of those shortages and ensure quality and compliance. And new financial models and incentives are desperately needed to get developers building affordable homes.

Without attention to detail, nothing will change.

Ringley’s 12-point plan for change

We want to see positive change in our industry – read on to find out more

In a week when all the political parties are setting out their stalls and manifestos are popping up all over the place, at Ringley we have taken the time to produce one of our own.

Yesterday, we blogged about the changes in the industry that ARLA and the NAEA want to see taken up by the new government. Today, it’s our turn. Despite moves to reform both leasehold and the rental sector, there is still a long way to go to ensure that landlords, tenants and flat owners get a fair deal. So here is how we think our industry could be changed for the better.

IF a house has to be sold leasehold, ban ground rent on it. We accept that Crown land may require leasehold sale, but there is no excuse to burden house owners with ground rent and leases of less than 999 years. 
BUT
Don’t ban ground rents on new build flats or set them at zero. If freeholders have no income to gain from their leasehold properties this could lead to an abdication of care and the potential to take no interest in the condition of the buildings, health and safety or compliance issues. None of this would benefit leaseholders.

Change the qualification criteria for freehold purchases, to ensure that all buildings can legally qualify for a freehold acquisition by the leaseholders or the Right to Manage process.

Give houses the opportunity to challenge estate charges. Like apartment leaseholders, house owners should have the right to challenge unfair charges at the FTT.
AND
Introduce Right to Manage for houses on estate developments.

Hurry up the New Homes Ombudsman scheme to ensure that owners receive transparent and fair treatment.

Regulate how client money is held. Too many letting and managing agents are not subject to RICS checks which, for example, require a three-way bank reconciliation and client balances to be proven monthly.

We would also like to see a whole tranche of new legislation to right the wrongs that, we as property managers, have to deal with every day:

  • make reserve funds mandatory to overcome the problems suffered by thousands of blocks with inadequate leases. Scotland does it, so why can’t we?
  • make it easy for leasehold blocks to make environmental improvements. Currently, most cannot, simply because the leases as drafted do not allow improvements (see our blog on solar panels here)
  • make RTM costs recoverable as service charge expenditure. That they are not, simply because these costs were never drafted into leases and are therefore the fact that they remain recoverable only from RTM members, is just unfair.
  • make the right to manage transferable – a share in the freehold is transferable – why can’t an RTM be transferable too?  The never-ending process of trying to recruit new RTM members is draining.
  • legislate so that blocks that have not had major works for sometimes 50 years+ are then not frustrated from collecting the money desperately needed by the Garside case requiring them to collect slowly.  Either the owners have benefitted from buying flats cheaply (because the block was run down) or they will have saved spending any money for years.

And finally…Grenfell has been in the news this week as the inquiry has started to report its findings. In the wake of the fire and the questions it has raised about the safety of our blocks, leaseholders should not be paying for the removal of flammable cladding. They were not responsible for choosing the construction materials for their block and bought their properties in good faith.  The government could have banned these dangerous materials when Europe and the USA did – if you allow it to be sold, you should fix your mess!

There are an estimated 4 million people in the UK living in leasehold properties and, according to the English Housing Survey, 4.7 million more rent their homes from private landlords, plus all the many block managers, property agents and suppliers that keep the sector running smoothly. That’s a lot of people whose lives are affected by government policy on property on a daily basis. And a lot of votes.

Our message to politicians is that they should give that fact due consideration when they are campaigning in constituencies around the country over the next few weeks.

Manchester tops latest BTR ratings

Manchester is the best place in the country to rent a new build flat says Homeviews

A BTR development in Manchester has topped the polls in a new report that rounds up residents’ reviews of their rental homes. More than 100,000 people around the country now live in a Build to Rent (BTR) apartment building. Initially, the sector was focused on London but now the regions are picking up speed both in terms of completed developments and projects in the pipeline.

HomeViews publishes resident reviews that give the developments they live in a star rating out of five across a range of categories. These include facilities, design, location, value and management. Homeviews has just published its latest report, rounding up more than 5,000 reviews from tenants living in 84 BTR and 438 build-to-sell developments across eight UK cities. The message for BTR developers and operators is a positive one: new build developments are delivering for tenants with more than two-thirds of BTR developments getting ratings of more than 4 out of 5. So what does BTR have to offer that is resulting in such great reviews?

Residents talk positively about communication, reliability, personalised service, kindness and – parties! Being pet-friendly, having a concierge and gardens, as well as gyms and parking got top marks from tenants. It’s also clear that customer service and good building management really matter. Management isn’t perfect, with 10 of the 84 developments receiving a management rating of 3 or below. However, 26 developments are delivering an incredible building management service and have been rated 4.5 and above. These include schemes managed by Allsop, Essential Living, Fizzy Living, Way of Life, Greystar, be:here and Legal & General.

BTR management is being handled in different ways – from apps, third party suppliers and building managers all called ‘Bob’ – presumably to make them easy to remember! What is clear is how passionate residents can be about the management team on site. The people BTR operators employ appear to be their greatest investment and it is paying off.

The Trilogy in Manchester tops the list for the highest-rated BTR development in the UK and the city boasts three of the top ten rated schemes. The Cargo Building in Liverpool came in second, followed by Dressage Court, Sailmakers and Vantage Point in London. Schemes in Birmingham and Newcastle also made the top ten. When comparing the average ratings and scores from BTR tenants living in the regions to London, the regions scored higher on every rating.

The US rental market is already familiar with the power of reviews with 70% of renters deciding to visit a property with a higher reputation score and 73% saying reviews affected their decision to rent.

The UK BTR sector is growing at a faster rate than anyone predicted. Earlier this year Savills reported that by the end of Q1 2019, there were more than 140,000 BTR homes complete, under construction or in planning. This marks a 22% increase from 2018 and is a figure 13% higher than identified at the end of Q1 last year.

To find out more and to download the Homeviews report click here

How to create more space in your home

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Make the most of your space – it’s cheaper than moving!

Do you ever wish you could push the walls of your home back and give yourself more room to spread out. Sadly that’s not possible, but before you start working out whether you can afford a bigger place, online agent Residential People has some tips to help you make the most of the space you’ve got.

Here are some simple steps you can take to make your property more space-efficient.

Could you make your kitchen open plan? Blocking off the kitchen from other rooms can make your home feel a lot less roomy. Opting for an open plan living and dining experience creates a friendlier atmosphere and makes the space feel larger and more functional.  This is likely to be a no-no for renters (unless you have a very acommodating landlord!) and leaseholders will need to read their lease and take professional advice before talking to a builder. However, if your lease allows internal alterations and your kitchen isn’t separated by a supporting wall, it may be easier – and less costly – than you think to open up your home.

Does your home have a staircase? If so, the space underneath it is a potential goldmine. You could convert the space into a set of drawers or cupboards, make yourself a pantry, or even create a cosy little reading nook or home office, perfect for a seat and desk or a place to store your books. Again, check with your landlord and/or your lease and your property manager before making any structural alterations.

If you are able to redecorate your home, go for light colours. Dark, bold colours only serve to make a room feel more enclosed and less open and airy. Using light colours, such as pale pastels, white or grey, can open up a room and allow more light reflection, making it feel much bigger than it is. 

Try to optimise wall storage. Most of us have storage needs that tend to use up a large proportion of that valuable square footage. So instead of using your floor space, consider making use of more shelves and wall-mounted cupboards.  Think about utilising the space above doors and windows too.

Tiny homes are becoming more popular around the world as a solution to homelessness and to combat ever-increasing property prices. And even if the idea of living in a really small space doesn’t appeal to you, there are lots of space-saving ideas out there to help you make the most of the room you have. Use your small space well and you will be joining a growing movement of people trying to reduce the environmental impact – and the cost – of their home.

And if you need advice on what is and isn’t allowable under the terms of your lease or rental agreement, talk to us at Ringley. Our property specialists are here to help.

How NOT to win friends – or votes!

If you want a lesson in shooting yourself in the foot, you don’t have to go any further than yesterday’s ‘right to buy’ announcement from the Labour party. Labour has pledged to introduce a new policy: if it wins the next general election it would give private tenants the right to buy the homes they live in.

Shadow Chancellor John McDonnell framed the proposal as a response to the problem of “overcrowding” and landlords “who don’t maintain their properties”. This is a hammer to crack a nut. And it has produced the expected response from landlords and their member organisations. This is a badly considered plan and its timing is terrible. As we all hold our breath to see whether or not we will be facing another General Election in a few weeks’ time,  Labour just lost the votes of landlords around the country.

Most landlords provide well-maintained homes for their tenants – and are right to expect a decent return for their investment. They are not providing social housing. Bad landlords are not the norm and as David Smith from ARLA says: “If there was to be any chance of this becoming law, there would be a mass sell-off of properties in advance”.

It is also doubtful, if the aim is to allow tenants to buy their rented home for below market value, whether or not lenders would be willing to provide mortgages on that basis. The housing market is predicated on market value, not on arbitrary sums set by the government.

Smith believes Labour’s plans are effectively a kind of compulsory purchase that is entirely unacceptable and ultimately unworkable, reducing the availability of homes to rent and destroying the viability of the PRS. Spot on, we say.

Giving council tenants the right to buy in the 1980s ultimately produced a crisis in social housing, which successive governments have failed to address. The problem has spilled over into the private rental sector which now has to find homes for tenants who would, in the past, have been housed by their local authority. A well-regulated, strong PRS is an asset and responsible buy-to-let landlords are badly needed in a country with too few affordable homes to buy.

“Time to emigrate,” says Ringley & PlanetRent Group CEO Mary-Anne Bowring.  “Personally, I am fed up with out-of-touch politicians stereotyping private landlords.  There are some rogue landlords out there but they are the minority – by and large, private landlords are hard-working individuals trying to build a nest egg for their children or their retirement.  The Tories have squeezed landlords with mortgage tax changes, reduced their income by banning up-front fees and even expect them to clean up after tenants at the end of the tenancy!  Now Labour want to dispossess them of their property altogether – I do wonder seriously, who is fit to run the country?” 

In our opinion, the Labour party should turn its attention to finding ways to deliver a major housebuilding programme that would provide jobs, as well as homes for people. Attacking landlords and their ability to provide those much-needed homes is an own-goal of momentous proportions.

Focus on property management – but make sure you get it right!

Letting agents have been told today, that by focusing on lettings only and not offering property management, they could be losing out on “thousands of pounds of potential income”. New research from outsourcing supplier ARPM, reported in Letting Agent Today, shows that many agents typically offer let-only. By offering a full management service too, ARPM calculates they could boost average annual income by up to 80% per tenancy. That’s big money.

The report reveals an untapped market of almost one million landlords in London alone who only use letting agents to find them tenants – or don’t use one at all. With private rentals expanding across the country year-on-year and many landlords living remotely from their investment property, there is huge potential for growth. And a chance to claw back the estimated £400 per letting that agents are expected to lose as a result of the tenant fees ban.

Property management is not a business to be entered into lightly

But – and this is a big but – property management is a serious business. The government has agents in its sights right now and poor service in our sector is soon to be outlawed by the advent of stronger regulation and the need for recognised qualifications. So, like marriage, this isn’t a client relationship to be entered into lightly.

As chartered surveyors and professional managing agents, we have specialised in this service for many years. Our lettings division Life by Ringley, based in Manchester and servicing clients across the region, has a clear understanding of the differing needs of landlords and tenants. We provide both basic and full management services, with fees clearly stated from the start. Click here to find out more. https://lifebyringley.co.uk/

As well as managing rental property, Ringley specialises in leasehold blocks. Rather than a one-size-fits-all approach, our Blockcare offer has something for everyone from a basic service to fully managed options. Fees are charged according to the level of management you require. Sign-up is easy and almost everything from site reports, minutes, invoicing and accounts can be done online. We can take us much or as little of the hassle out of your management requirements as you want us to.

We even have a tailor-made package for you to use if you can’t afford a managing agent! Click here to find a package that suits your needs https://www.ringley.co.uk/property_management

Fees ban – the unintended consequences

The Tenant Fees Act came into effect in England on Saturday and there are already big question marks hanging over the new legislation. Both the government and the lettings industry want to make renting fair for tenants but agents are not convinced the new Act will work in the way that was intended.

What’s the impact?

Glynis Frew, the CEO of letting agent Hunters, said this week that good intentions could easily result in unintended consequences. We agree that a small number of rogue agents and landlords have charged what she describes as “mind-boggling” fees, but this isn’t representative of the industry as a whole. Instead of government opting to cap fees, they have been scrapped altogether. The likely results are rent increases, landlords leaving the sector in even greater numbers than they are already and letting agents shutting up shop – which as well as reducing consumer choice, also has a negative impact on our beleaguered high streets.

Our view is that the Act will mean agents looking closely at their all-inclusive management fees and having to pass on disbursements such as deposit registration costs to landlords. The industry will be looking to push extra products such as insurances, on which agents can take commissions to cover the shortfall in income. 

New fines for ‘prohibited’ payments

Local authorities, charged with enforcing the legislation, can fine landlords and agents up to £5,000 for levying a payment that is now prohibited (see yesterday’s blog at https://blog.planetrent.co.uk/tenant-fees-act-now-in-force/ for a list of allowable fees) and they can prosecute or impose a fine of up to £30,000 if an ‘offence’ under the Act has been committed. This is where a landlord or agent has been fined or convicted for a breach within the last five years and commits a further different breach.

Being a landlord has never been more precarious.  Reducing deposits from 6 weeks to 5 is no real protection against tenants not paying their last month’s rent and the Deposit Alternative products that are now springing up may offer landlords more protection but are of course optional, and cannot be forced on tenants.   Flexibility as to how tenants make payments is also diminishing as many landlords refuse to take rent or deposit payments by credit card as, understandably, they don’t want to pay the fees.

Future challenge

The challenge for agents will be to ensure they are providing an added-value service to landlords by having effective tenant referencing, contractual and deposit systems in place as well as ensuring compliance with the new Act.

What will the flat of the future look like?

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Fancy a wind turbine on your roof? Well, in a few years’ time, according to Aldous Hicks from Recircle Recycling, you could be seeing them everywhere on the skyline. Climate change is making an impact on the way we live and in future we will be installing a whole range of eco-friendly devices in our homes to help reduce our carbon footprint and ramp up our ability to reduce, re-use and recycle products that we now just throw away. Here are some of Recircle’s favourites.

New storage batteries currently in development promise to unlock a range of in-home energy production methods. Batteries will then be able to store power at a local level and perhaps even distribute power across a community. But what will we use to generate power?

That could be solar tiles – which are a step up from the bulky panels we’re all familiar with because they are smaller and more flexible. They can be retrofitted onto any property with a roof, although the drawback is the low energy production they offer in less sunny countries. So in the UK, we may be stuck with solar panels for a bit longer.

Back to those wind turbines. Imagine fitting an attractive and super-efficient wind turbine on your roof that’s a piece of art as well as generating almost all the power needed. Take the Liam F1 Urban Wind Turbine from Dutch tech firm, The Archimedes, shown above. The spiral design resembles a big rotating flower. At 80% efficiency, it is a forerunner of the high-efficiency turbines of the future.

Something really exciting is the bio-fuel synthesiser. Scientists are now working with microorganisms that can break down organic material and CO2, passing the energy straight into a battery. Food waste and human excrement will feed the machine, providing energy-free sewage treatment and no need for composting. Bio-fuel synthesisers will be fitted to our toilets and waste disposal pipes, turning our organic waste into clean energy.

But what about other kinds of waste? A closed-loop economy means processing products and packaging back into their original form, or equivalent. At the moment, we can’t do this because of the high cost and low-reliability of separating out different materials for recycling.

So ReCircle is working on a home and business appliance to do this. It will use a sensor to ensure different materials are never put together. This means the inherent material value is not lost due to being mixed with other different materials – the major problem with the current recycling system.

The near-pure used-materials are washed, ground or compacted to contaminant-free sized-reduced pure products ready for storage. The pure close-loop recyclable products will then be collected on-demand from buildings when the storage containers are full.

It may even be possible to combine technologies like a recycling appliance and a 3D printer, ensuring that everything you print can be reprocessed into future ‘ink’ to make more products. Individual homes and other buildings could instantly become closed-loop in themselves.



 

Section 21 changes: making them work

Yesterday’s blog looked at the problems that could be caused for the rental sector by the proposal to scrap “no-fault” Section 21 evictions.

The government proposes to effectively make tenancies open-ended while at the same time strengthening the rights of landlords who want to recover their properties by giving the Section 8 process more teeth. Getting this right will make or break the planned change in the law. Get it wrong and the government risks seriously damaging the rental sector – which is already struggling to meet the demand for housing.

The average time it takes for a private landlord to repossess a property via the current system is nearly four months, according to data from the Ministry of Justice published in Landlord Today this week. This is completely unacceptable. All landlords know that eviction of any kind is a last resort. And even official figures point to the fact that only 10% of tenancies are ended by the landlord, not the tenant. All other things being equal, they have a better investment with a long term tenant where there is no void rent loss and less move-in-move-out wear and tear.  But there are legitimate reasons why a buy-to-let landlord may need to evict someone when they have a change of circumstances and that situation must be supported by an efficient court process.

In Scotland, where court reform was rolled out prior to scrapping their equivalent of Section 21, the new regime seems to be working. So paying attention to Section 8 will be vital if the new regime is to be fair to landlords as well as to tenants.

Not surprisingly, there has been a strong reaction to the government’s plans from the lettings sector, with more than 6,000 people responding to the Residential Landlord Association’s survey asking what a post-Section 21 private rented sector should look like – a record response for the trade body. The RLA survey closes on Monday and the results will be used to respond to the government’s formal consultation when it is launched, so go to the RLA website at https://rla.onlinesurveys.ac.uk/possession-reform-ensuring-landlord-confidence-apr-may to have your say.

Landlords and tenants – you need each other!

Fixed-term tenancies for private renters should be scrapped. Landlords should also stop evicting tenants just because they want to sell their homes. These are just two of the reforms called for by leading thinktank, the Institute for Public Policy Research (IPPR) in a recent report.

Landlord and tenant: PRS reform must consider the needs of both
Landlord and tenant: PRS reform must consider the needs of both

Under the law as it stands, without giving a reason, private landlords can issue a ‘Section 21’ eviction notice to tenants whose assured shorthold tenancy has ended. This puts millions of private renters in the UK in a precarious position, says the IPPR, as they never know when they may be forced out of their home. The thinktank is calling for increasing security for tenants through an ‘open tenancy’ and wants to prevent landlords from selling in the first three years of a tenancy agreement, giving renters greater peace of mind .

There is no doubt that for many renters, the PRS is insecure. Around one in 10 tenancies comes to an end because the landlord has terminated them through a no-fault eviction. Tenancies ended by landlords were the biggest cause of homelessness in England in 2017, accounting for almost a third of all local authority homelessness acceptances.

The IPPR believes tenants face unaffordable rents, poor conditions, a lack of tenure security and limited control over their rented home. In response, among other things, the thinktank wants to see changes to recent welfare reforms to help struggling tenants and a national landlord register to help drive up standards in the rental market.

Tenants undoubtedly stand to gain from these proposals. But are they fair to landlords? The majority of landlords in the UK own just one or two buy-to-let properties. Many are ‘accidental’ landlords who have inherited a property and may be renting it out simply until they can make a profit by selling it. Most take their responsibilities seriously and many are happy to offer their tenants a well-maintained home for as long as the arrangement suits both parties. The property they rent out is theirs – why shouldn’t they be able to take it back if they want to?

The IPPR agrees that landlords need to be treated fairly. It proposes that the Government should launch a review of all taxation relating to private landlords. Reforming the tax system  would promote socially responsible landlordism and a long-term, high quality and stable rented sector as well as challenging wealth inequality, says the thinktank.

There is no doubt that private renting causes hardship for many, especially those on benefits. However, the PRS has grown substantially in the last two decades. It is now home to 20% of households and many more people expect to rent for longer. If it is to continue to thrive and to provide high quality homes for more of us each year, any reforms that are put forward must take into consideration both the profitability and the rights of landlords as well as those of tenants.