Why we say NO to cancelling rents!

Cancelling rents would be disastrous for landlords and investors says Ringley Group MD

Cancelling rents for private tenants without reimbursing landlords would be “stealing from people’s pension pots” says Ringley Group MD Mary-Anne Bowring in response to demands for more radical policies to help renters.

More than 4,000 Labour party members recently signed an open letter backing cancelling rent as a policy. The letter argued Labour’s five-point plan to help renters, which included extending the evictions ban by at least six months and giving tenants two years to pay back rent arrears, did not go far enough. Meanwhile, the London Renters’ Union and others are calling for rent strikes, claiming renters are having to choose between food and paying rent.

The government’s ban on evictions has been extended until August 23rd, which has calmed fears that thousands of tenants could lose their homes if the ban wasn’t extended.

However, Mary-Anne firmly believes that cancelling rents in the private sector would punish hundreds of thousands of pensioners, as well as risk halting the current appetite from UK pension funds who are investing billions into creating new high-quality homes for rent. The most recent English Private Landlord Survey estimates there are at least 1.5m landlords in England alone. Of those, nearly half said they invested in rental property to supplement their pension and approximately one-third are retired.

This means if a rent cancellation was to be introduced, at least 500,000 retired landlords would see their rental income wiped out entirely. This would also dramatically reduce rent revenues for pension funds, many of which have suffered losses from retail and office investments and rely on income from property to match their liabilities.

No one can doubt or deny that millions of renters are facing major financial difficulties or anxieties but cancelling rents is not the answer. Some renters may need more financial assistance from the government but cancelling rents or getting the government to pay would be hugely damaging,” warns Mary-Anne.

 Both private and institutional landlords would lose rental income unless the government stepped in to pay private residential rents, which could cost the taxpayer billions and is completely unacceptable.

That’s our take on Labour’s proposals. What do you think?

www.ringley.co.uk
Why not READ our Planet Rent Blog too:
blog.planetrent.co.uk

Moving House? Now you can push the go button!

Time to get moving – but you must follow the latest guidelines.

Have your moving house plans been brought to a halt by the lockdown? If so, you can now re-start the process. Yesterday, Housing Secretary Robert Jenrick announced that, from today, anyone in England can move home if they follow the new Government guidance.

Since lockdown restrictions were implemented in March, more than 450,000 people have been unable to progress their plans to move house. The government hopes to re-start the market and get buyers, sellers and renters moving again.

Clearly, this announcement doesn’t mean a return to normality – far from it. The process of finding and moving into a new home will be different and that now includes doing more of the process online. Initial viewings will be virtual and vendors will be asked to keep away while potential buyers are shown around. Properties must also be thoroughly cleaned before someone else moves in. So good news for commercial cleaning companies used by landlords and block managers.

After seven weeks in lockdown, the announcement is welcome news for the property industry as well as for buyers, sellers and renters. Ringley Group MD Maryanne Bowring said today:  “There’s no reason buyers or renters shouldn’t be able to move home if they are able to do so safely in accordance with social distancing guidelines”. However, she is quick to point to the fact that this doesn’t mean the housing market has returned to its pre-coronavirus state.

 Lockdown is set to continue in some form for an unknown amount of time and the resulting economic disruption is likely to weigh down on activity in the for-sale market. A stamp duty holiday, as proposed by RICS and others (see our 29 April blog for more details) could see a stampede in transactions while an extended Help to Buy will support some sales and in turn housebuilding.

 Maryanne thinks the Government now has an opportunity to think long term and introduce policies to reflect Britain’s changing housing needs. “Private renters are a fast-growing part of the housing market and need catering to,” she says,  “yet politicians seem intent in squeezing buy to let landlords out of the rental market and the build to rent sector – a positive emergence – simply isn’t big enough yet to absorb all rental demand.

 “If the government cuts stamp duty surcharge for landlords it could help stimulate the market by encouraging BTL investors to snap up homes to then rent out. Many landlords also help support housebuilding through off-plan sales,” she adds

The housing market as a whole will also have to get ready for a digital-first approach to transactions as more tasks and jobs are done remotely.

www.ringley.co.uk
Why not READ our Planet Rent Blog too: blog.planetrent.co.uk

Oak trees at your block? Don’t touch the caterpillars!

These caterpillars may seem cute – but they’re nastier than they look

And now for something completely different… does your block have oak trees in the garden? Property managers, contractors and residents, especially in London and the South East are being asked to report any sightings of Oak Processionary Moth caterpillars to the Forestry Commission and – most important – not to touch them!

Oak Processionary Moth was first identified in 2006. The caterpillars damage oak trees, and their hairs which are also found in OPM nests, can cause itchy rashes, eye and throat irritations. So a Government programme is in place to limit their spread. They can also occasionally cause breathing difficulties in people and pets, so they should not be handled no matter how cuddly they may look!

The Forestry Commission, councils, and land managers have an annual programme in place to tackle the pest, which affects certain parts of the country in the spring.

What to look out for

Nests are typically dome or teardrop-shaped and about the size of a tennis ball. They are white when fresh, but soon go brown. The caterpillars have black heads and their bodies are covered in long white hairs. From May to July the caterpillars emerge and feed on oak leaves which can make the trees vulnerable to other pests and diseases and drought.

Anyone with infested trees in the control zone monitored by the Forestry Commission will have been advised that work needs to take place over the next two months to help stop the spread of this pest. Contractors spraying affected trees on behalf of the Forestry Commission will carry out work safely, adhering to social distancing guidelines.

Everyone is reminded, particularly those in London and the surrounding counties to report sightings of OPM caterpillars, which could be damaging oak trees in their area, to the Forestry Commission via TreeAlert. Alternatively, you can email opm@forestrycommission.gov.uk or call 0300 067 4442.

Building owners or property managers considering pruning or felling oak trees in the affected areas should contact Forestry Commission England’s Plant Health Forestry Team beforehand on opm@forestrycommission.gov.uk or 0300 067 4442 for advice about safe removal of the material.

www.ringley.co.uk
Why not READ our Planet Rent Blog too: blog.planetrent.co.uk

Are good property managers now needed more than ever?

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Good communication – at a distance – between property managers and their clients and residents is more important than ever before

The work of a managing agent is to manage, arrange and communicate. We do this for groups of people who need to receive information about maintenance, upgrades, current spending, and future plans but who otherwise would be uncoordinated – they wouldn’t know what was going on, or what was expected of them.

Our role is varied and many-faceted and the challenge is to carry it out effectively and sensitively. We deal on a daily basis with:

  • inter-personal politics and dissemination of information;
  • customer service, helping those who come to us for advice understand the roles and responsibilities within communal living and how a financial year in property works;
  • building pathology to deal with reactive maintenance, planned maintenance and cyclical works; 
  • law to gain a shared understanding of covenants and responsibilities which sometimes need to be enforced; and
  • bookkeeping and accounting.   

Luckily for us and our clients, while our core business is property, the human relationships, regulation, and compliance in what is a complex and highly legislated industry are all things that can be managed remotely.  Not forever though. We very much need to be in touch with the buildings we manage and those who live in them.  There is no substitute for seeing and feeling a problem, and in the short term photos and more conversations than we would normally have with clients and residents are painting pictures of what we need to see.

We have switched to video conferencing to ensure that Annual General Meetings can take place, and we have had over 6,000 customers opt-in to more by e-post.

Our main challenge is finding contractors with the capacity to attend our sites – and in some instances, availability of suitable protective equipment – and clients look to us to ensure that we have responsibly advised the supply chain.

During this pandemic, the need for strong communication is crucial, particularly as residents who are ‘staying home’ have more time for scrutiny of their home environment.  The challenge of  ‘managing and arranging’ has become increasingly complex with trades and supply chains hampered by ill, self-isolating or furloughed staff and many contractors not willing to enter people’s homes. There has also been confusion over which maintenance tasks should be considered, although the government has now published guidance on electrical and gas safety checks as well as lift inspections.  

So, perhaps in these strange times, our services are needed more than ever.

www.ringley.co.uk

Why not READ our Planet Rent Blog too: blog.planetrent.co

Coronavirus: advice to our clients and residents

If anyone in your block is suspected of having the virus, contact your property manager as soon as possible.

Coronavirus is a national issue beyond our remit – however, we feel it is important to address the concerns of those living in the homes we manage, especially as people may be self-isolating. So here are the steps that will be taken if there is a suspected case within your building.

First and foremost we advise all residents to follow the official advice from Public Health England and the NHS. If a member of your household is in self-isolation as a result of the government guidance then please notify your property manager as soon as possible.

If you live in a block of flats, it may be the case that we are required to inform other residents in order that they are aware of the issue.  The Government could require us to do so, or the client/directors of the management company could require us to do so. If you are in self-isolation, it is important that contractors or other non-family members are not invited into your home for the entire period. 

If there is a confirmed case of Coronavirus in your building, your property manager will take guidance from Public Health England as to the required action to be taken. This may include a deep clean of the communal areas of the building.  As an unbudgeted expenditure, reserve funds may need to be spent to achieve this.   By letting your property manager know, he or she can share this with the client/committee on-site to ensure that, should a resident be isolating at home, the community in the block come together to ensure they have the food and toiletries they need – and do not need to go out and breach their isolation.

As things stand, there is no requirement for any residents to vacate a building in the event of a resident of another flat contracting the virus, but again we will be guided by Public Health England at all times.

If you are NOT an owner-occupier, you SHOULD provide this information to your tenant.

For clients and RMC directors here are some other matters that you may wish to consider in your planning:

  • Doors are clearly the largest transmission risk point. Foot-operated door openers do exist and could reduce the chances of infections being spread by door handles  
  • For doors with the green push-to-exit release buttons –consider asking people to operate them with their elbows.
  • To reduce cross-infection, warning signs could be put next to handles and knobs that are likely to be touched by lots of people.  Then people could decide how to deal with the risk themselves (pull down sleeves over hands, use elbows, etc).
  • Perhaps a biohazard sticker with ‘Danger of Cross-Infection’ or similar text might be appropriate.

We are now researching companies competent to carry out deep cleaning and anti-bacterial fogging. A deep clean means not only the cleaning of all walls, door frames, etc using pressurised sprayers but also use of a fogging machine with an anti-bacterial product. The solution in a fogging machine is a bacterial, fungicidal and virucidal disinfectant. As the disinfectant fog disperses, the active ingredient comes into contact with all surfaces in the room and thereby treats both surfaces and the air.

The central point of contact for all clients/directors in relation to Coronavirus measures is Paul West. He can be contacted via  paul.west@ringley.co.uk   or 07490 023207. Please do not overload your Relationship Manager with these matters as this will erode the capacity that they need to carry out their day job (potentially under strained circumstances).   Paul is available for additional site inspections and on-site discussions as an addition to the management service.


Three cheers for Help to Buy but don’t forget to do your homework first

A new flat could be yours with a small deposit via Help to Buy – but do read the small print.

There was good news this week for anyone hoping to buy their first flat via the Government’s Help to Buy scheme. A new and improved offer will run from 2021 to 2023, with some new safeguards written in. Builders must now sign up to the Building Safety Charter (when it’s launched) if they are selling homes under Help to Buy in blocks above 18 metres – or 6 floors, whichever is lower. And any ground rent on the sale of leasehold properties through the scheme must be restricted to a peppercorn rent.

The Government-funded scheme allows buyers to purchase a new-build home with a 5% deposit plus an equity loan from the government and a mortgage for the remaining balance. The scheme includes regional property price caps. The caps take average first-time buyer prices for the region (inflated to account for property price growth) and add a further 50% to ensure there is good availability of the scheme.

Since it was originally rolled out in 2013, it has helped more than 200,000 home buyers, but it’s also faced accusations of inflating house prices and lining developers’ pockets. The Government seems to have taken these criticisms on board. For starters, it will be restricted to first-time buyers. Now, defined in line with stamp duty land tax exemption, the scheme will only be applicable to people who have never owned a property before. All buyers will be entitled to view the actual home being purchased (with their own surveyor if desired) before legal completion of the sale.

Developers who want to use the Help to Buy scheme must now sign up to a range of new quality measures to improve consumer experience and safety. As we blogged yesterday, builders must be subject to adjudication provided by the New Homes Ombudsman and the preceding voluntary scheme (when established). Those housebuilders with a Home Builders Federation star rating must show it clearly on all Help to Buy-related communication and advertising and all homes built from May onwards must comply with the most recent energy efficiency requirements.

Despite all this, there is still a strong element of Caveat emptor or buyer beware, about this initiative. It’s been really helpful for people who otherwise could never have afforded to make the move from renting to buying. But the way the equity stake from the Government works is complicated and despite getting a 5-year interest free period, after that monthly payments will go up. You can only buy selected properties from certain developers and get a mortgage from selected lenders – and any profit you make when you sell your flat will be shared with the Government; they will take back 40% of the sale.

So the message here is that potential buyers really can benefit from the scheme – which does look better this time round. But they do need to go into Help to Buy with their eyes open – and do their homework.

More red tape for besieged agents

New money laundering legislation comes into force today. Regardless of Brexit, property agents must abide by the Fifth EU Money Laundering Directive, ensuring they risk-assess their business processes and carry out thorough ID checks on customers.

Agents will need to carefully consider how they might find themselves exposed to money laundering and to the risk of financing terrorism and ensure they have measures in place to manage and eliminate any risks.

Letting Agent Today explains that agents must carry out customer due diligence on landlords and tenants where renting is “for a period of a month or more, and at a rent which during at least part of that period is, or is equivalent to, a monthly rent of 10,000 euros or more”.

 If a third party is acting on behalf of another person in a particular transaction, that person is described in the legislation as the ‘beneficial owner’, ie the person on whose behalf a transaction is carried out. Beneficial owners must in future be identified and any potential risks they pose be assessed. It will also be important to assess the risk of money laundering that could result from:

  • Sending money to customers to or through high-risk third countries which don’t have effective systems in place to prevent money laundering or terrorist financing;
  • Company services or transactions;
  • The financing methods used to support the business; and
  • Other transaction-based activities such as non-face-to-face services.

All customers and beneficial owners are now subject to identity checks via an official identification document such as a passport or driving licence. Photo ID, as well as verification of the current address, will be needed for both new customers and existing clients if their circumstances change.  Due diligence also applies should agents have any doubts about the authenticity of an existing customer’s ID information or suspect that money laundering or financing terrorism may be taking place.

Under the new rules, risk assessments must be recorded, kept on file and regularly reviewed. Any changes to a business, it’s financing or the environment in which it operates will trigger an updated assessment, which must be made available to HMRC on request.

Of course the property sector should not provide an easy route for money laundering. But at a time when the industry is steeling itself for yet more reforms, this new legislation is yet another hoop for agents to jump through. And this is being piled on top of the 125-plus other rules and regulations that agents are faced with on a daily basis. That said, it is hard to argue against legislation that should go some way at least to safeguarding the sector from criminal activity.

HPL cladding: more questions than answers

Ringley CEO Mary-Anne Bowring will be talking about fire safety in Manchester this week

Footage from this weekend’s devastating fire at a student block in Bolton must have given the property industry a collective sense of deja vu. Thankfully, everyone was safely evacuated, but once again we watched flames rapidly spreading up the outside of a block, while its cladding melted in the heat. This time though, the cladding was HPL – not the ACM used on Grenfell Tower – and another can of worms was well and truly opened.

In the wake of the 2017 tragedy, experts warned that “the next Grenfell” would involve HPL cladding. Building owners were told to remove all cladding systems, including HPL, that didn’t conform to building safety standards. However, the government’s ban on combustible cladding only applies to blocks over 18m. That lets an awful lot of buildings – including the one that went up in flames in Bolton – off the hook.

Inside Housing today quotes Matt Wrack, general secretary of the Fire Brigades Union, who says “This terrible fire highlights the complete failure of the UK’s fire safety system”. We have to agree with him. Even the reforms proposed by the Hackitt Review only apply to buildings of ten storeys and above, referred to as HRRBs or high-risk residential buildings. It has to be hoped that once in place and seen to be working, these changes will be applied to all buildings, not just high rises.

So what happens now? We expect to see calls for HPL cladding to be tested and removed if it is found not to have been treated with fire retardants,  which gives it a fire safety rating of Class 0 or Euroclass B. However, it is estimated that cheaper versions graded a much lower ‘Class D’ may account for more than 80% of the market.

The continuing nightmare of residents in ACM-clad blocks are well documented. All the same issues around the rights and responsibilities of leaseholders are now likely to be extended to a new group of people. And as if that wasn’t enough, lenders have tightened up their rules since the government issued Advice note 14  last December. This leaves an increasing number of leaseholders stuck with flats that are unsellable because not only are mortgage applicants being assessed but so too are the buildings they want to live in. The Times estimates that up to 50,000 flats around the country are affected. What a mess.

So two important points for the immediate future.

  • If you manage a building with HPL cladding, talk to residents about the implications and commission a fire risk assessment if necessary. Make sure the block has an evacuation policy. If there isn’t one, make it a priority to put one in place.
  • If you own or rent a flat in a building with external cladding, contact your building manager or landlord to find out what measures they are putting in place to ensure resident safety.

So watch this space – this story is going to run and run. And one thing is crystal clear. The issues raised in the last two years around fire safety will not be resolved quickly or easily.

Mary-Anne Bowring, CEO of The Ringley Group, is speaking on this subject for the RICS in Manchester this Wednesday 20th November.


Good news for broadband providers – and you!

Removing the barriers to better broadband

Would you like better broadband speeds in your block? If so, here’s something for you. The government has announced new measures to make it easier to install faster internet connections in blocks of flats where landlords repeatedly ignore requests for access from broadband firms. Digital Secretary Nicky Morgan estimates that an extra 3,000 residential buildings a year will be connected as a result.

Under the law as it stands, to install gigabit-capable broadband in the UK’s estimated 480,000 blocks of flats or apartments, broadband providers need permission from landlords to enter the property and undertake the necessary works. One of the biggest obstacles preventing operators from installing new networks in residential blocks is the building owner’s failure  – in as many as 40% of cases – to respond to requests for access. And while broadband providers can already push for access via the courts, this takes time – and money.

So to solve the problem, the Government is now promising a cheaper and faster process for telecoms companies to get access rights. This will apply when a landlord has repeatedly failed to respond to requests for access to install a connection that a tenant within the building has asked for. And it will give operators a cheaper and more streamlined route via the existing Upper Tribunal (Lands Chamber) to connect the property. The aim is to lower the timescale for entering a property from six months to a matter of weeks and at a drastically reduced cost.

Good news all round we think.

Fire! Should you stay put or evacuate?

Is there an evacuation plan for your block? If you don’t know – find out.

Would you stay put if a fire broke out in your block? As the first phase report of the Grenfell Tower Inquiry is published, the “flawed” stay put policy used on the night of the devastating fire is now under intense scrutiny.

‘Stay put’ is the standard advice given to residents in blocks of flats who are not directly affected when a fire breaks out. They are told to stay in their homes with the windows and doors shut. The expectation is that the construction of the building and fire doors leading onto communal areas will protect people from the spread of fire long enough for the fire service to attend if necessary and put out the fire. At Grenfell Tower, this policy proved utterly inadequate. It is now judged to have led to unnecessary loss of life. As a result, the government is working on a “full and detailed examination” of the stay put/evacuation strategy for fire in high-rise blocks.

Housing Secretary Robert Jenrick told the Housing, Communities and Local Government Select Committee yesterday that, while expert consensus is that stay put is “valid” for most tall blocks, the government is now reviewing the advice.

As a layperson it is hard to understand the thinking behind stay put: surely it makes more sense to get out of the building as quickly as possible? So here’s the explanation. The thinking behind it is twofold:

  • First, the fire service needs unfettered access to hallways and stairs to get up and down to evacuate the building in priority order. This would be hampered by everyone trying to evacuate at the same time – particularly in buildings with only one stairway.
  • Second, opening and closing doors increases air circulation which not only accelerates combustion and the spread of smoke but panicking residents rarely stop to close their door behind them. This leaves other parts of the building exposed to the fire.

A stay put policy is intended to protect residents (who can be safely rescued some other way) from smoke inhalation, as smoke kills long before the heat from a fire.  But the Grenfell Inquiry judge is now calling for evacuation plans to be developed for all high-rise buildings. Ringley Group managing director Maryanne Bowring agrees. She does not believe stay put is the right policy for all high-rise blocks.

Her view is this. “If there is no misting system or sprinklers in your building and you are above the height of a ladder (normally assumed to be six storeys) or if the fire is below your home in a tower, or if the facade of a building is burning, or if the building was not constructed in the last 10 or so years, I would say you must get out.

She adds: “You can have as many fire risk assessments as you like, you can have as much fire detection equipment as you like, but there should now be an acceptance that any fire policy is made up of component parts, one of which can fail, even if serviced or checked yesterday – so visual and common sense judgements must be made”.

We all feel for those in the fire and call centres that night who were under orders to keep telling residents to stay put, when they could watch the fire at Grenfell Tower on mobile phones or in person and see that the building was engulfed by flames.

Dame Judith Hackitt, who carried out a review of fire safety and building regulations for the government post-Grenfell, will now advise ministers on the format of a new building safety regulator. The aim is for a fundamental shift in the design, construction and management of tall buildings with the focus firmly on safety. This is badly needed for the long-term wellbeing of residents and we await the outcome with interest.