Lettings Market Updates & Property Advice!

Welcome to the October edition of the Greenstone newsletter. This month we turn our focus to the lettings market to provide an update on the recent changes. First up this month we share why property is the best investment avenue in 2020 for landlords. Next up we provide the latest guidance on lettings evictions this autumn and how properties that are priced right the first time, sell in half the time.

We finally look into the governments latest action plan to tackle EPCs and how this will effect landlords.

We hope you enjoy this months edition. We also provide property tips, insights, and updates on our social media channels which you can click to follow at the end of our newsletter. As always, please get in touch if you have any property queries.

Best regards

Lewis Green, Director

Why property is the best investment avenue in 2020 for landlords

The rental market has been extremely active this year, bouncing back from its temporary closure in record speed.

Could now be a good time to invest and grow your portfolio as a landlord?

Rental prices are up

In the past month, UK rental prices have increased by 2.1%, now standing at £987 PCM on average – up 1.5% from last year.*

Following analysis taken across the country, it was found that ten out of twelve regions have shown an increase in rental prices since 2019, with two of those areas showing an increase of over 5%.

The South West has demonstrated the strongest increase, with an average 6.6% boost.

Whilst London’s rental market does not show an increase, at an average rental value of £1,653 per month, landlords based in the capital should still expect healthy returns from their investments this year.

Enquiries from tenants at their highest

Recent analysis from ARLA Propertymark has revealed that registrations from new tenants have shot up to 101 per lettings branch last month, breaking July’s record of 97 newly registered applicants.

We’re simultaneously seeing average tenancy lengths at an all-time high for August, with tenants staying put for 21 months.

One reason behind these figures is that nearly half of first-time buyers are deferring their plans to buy; either due to financial difficulties (41%) or because lockdown has prompted them to reconsider their priorities (42%).**

Mortgage rates remain incredibly low, with high demand and savings making it an opportune moment to consider your first or next step as a buy-to-let investor.

Contact us for more information.

*Source: HomeLet Rental Index, Estate Agent Today

**Source: Aldermore

The latest guidance on lettings evictions this autumn

Although the ban on evictions has now been lifted, there are certain measures and restrictions in place to protect tenants as we head into winter.

Find out what’s changed for landlords, tenants and the UK rental sector.

From a recent survey, 12.5% of tenants reported that they had either missed rental payments or made alternative arrangements, with an additional 12% of respondents concerned about their ability to keep up with rent in the future.*

Notice periods

To recap on what’s been put in place so far, six-month notice periods will give tenants who are served notice the added security of having somewhere to live whilst they seek alternative accommodation or financial support.

These extended notice periods will be in place until March next year, except in extenuating circumstances where a landlord may seek possession sooner, including for anti-social behaviour or rent arrears that pre-date lockdown.

Now that repossession cases can be brought to court again, landlords and tenants should take it under advisement to establish a resolution privately – if at all possible – as cases are prioritised by level of urgency to manage the court’s backlog and this may delay the ability to come to an agreement.

For landlords, it’s also important to note that when making your case, you will need to disclose your tenants’ financial situation and whether they’ve been affected by the pandemic, as this will be a key consideration.

The government’s Christmas evictions truce

Dates have been announced by the government to prevent tenancy evictions over the holidays, meaning that bailiffs cannot be instructed to help landlords regain possession between December 11th and January 11th.

There will also be further guidance issued to bailiffs, preventing action to be taken where local lockdowns are currently in force.

Concerns from the lettings sector

Policy and Campaigns Manager at ARLA Propertymark – Timothy Douglas – has commented that over the past few weeks, the government have not been clear when providing updates on eviction processes but have instead drip-fed information to the public.

As a result, this has made it very difficult to respond and plan ahead, with Douglas further stating that the UK government are introducing measures that are difficult to implement; especially when faced with rapidly changing local lockdowns.

If you’re a tenant or landlord looking for clarity on how this could affect you, please contact us directly.

*Source: Goodlord survey, Letting Agent Today

Properties priced correctly sell in half the time

Rightmove have done extensive research into the effect that asking prices have on a property’s likeliness to sell.

Approximately 300,000 properties were brought onto the market this summer.

By September, 63% of properties that remained at the same price and hadn’t been reduced had reached Sold Subject to Contract (SSTC).

Whereas out of the 300,000 properties, only 32% of those that had come down in value had reached SSTC within that same timeframe.

This study confirms what we’ve long since known, that the asking price set for your home is a key determining factor in how it performs on the market.

When priced right the first time, Rightmove’s findings were that a house sold 26 days faster, on average.

As your leading local agents, we can ensure that your home is competitively priced.

Resident data expert at Rightmove – Tim Bannister – had the following to add: “This analysis shows just how vital it is that sellers listen to their agent when they recommend the asking price that the property should be listed at.

“If sellers are serious about selling, then starting with too high an asking price can cause unnecessary delays, and also make it a lot less likely they will actually find a buyer in the end.

“The temporary stamp duty holiday means more sellers are in a hurry to get a sale through conveyancing, and with this also taking longer at the minute a realistic asking price could soon end up being the difference between completing in time or losing out on the savings.”

Book your valuation today

We appreciate how demotivating it can be to experience delays when you’re excited to progress your property move.

That’s why our valuations take into consideration a number of different variables, such as the condition of your home and properties in your area, making us the experts who can confidently evaluate your home’s worth the first time.

Government’s action plan to tackle EPCs – how will it affect landlords?

New long-term targets have been announced for improving energy efficiency standards within the rental sector; drawing criticism from industry specialists that the measures are simply not realistic.

In their proposal, the government state that by 2025, minimum Energy Performance Certificates (EPC) for all privately rented homes should be raised to Band C for new tenancies – applying to all tenancies by 2028.

This document goes on to outline penalties as high as £30,000 for landlords who fail to comply within this time frame and may even include banning the inclusion of properties with EPC ratings below C to be advertised on portals.

What outcomes are the Department of Business, Energy and Industrial Strategy looking to achieve with these new energy targets?

- Reduced bills for lower income households and vulnerable members of the community.

- Reduced energy bills and to guarantee higher standards of living for UK tenants.

- Contribute to government initiatives to de-carbonise buildings, thereby mitigating the effects of climate change.

- To improve the quality and value of landlords’ assets.

You can see the 48-page consultation brief here, with details on how to respond: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/922667/improving-energy-performance-privately-rented-homes.pdf

If you need help managing your compliance and responsibilities as a landlord, we offer a range of property management services that you may find beneficial.