First Details Emerge of New ‘Private Rental Portal’ for England
With more information on promised reforms slowly surfacing, it was no surprise that the Queen’s Speech would feature some new information for landlords and tenants in England, but details remain sketchy and besides some basic information, there was little concrete information.
What is the Private Rental Portal?
Simply put, the private rental portal (PRP) is likely to be a searchable database of all rental properties in England, along with information on the owner of the property, the company managing it and contact details for the appropriate individual or company.
What additional information will be provided remains to be seen, but it is likely to at least cover areas of legislative compliance such as safety certification, energy efficiency and issues related to the ‘Decent Homes Standard’. In this regard, it will be interesting to see whether the ‘property passport’ proposed by the head of the National Residential Landlords Association (NRLA), Ben Beadle, will play a part in available documentation. On the subject of the passport, Beadle had this to say:
As part of an equivalent system in Scotland, landlords on the register are required to display their registration number on all property listings in order to allow prospective tenants to easily check the history of both property and landlord – it would be strange if this requirement were not duplicated in England. For the PRP to achieve its aims, there needs to be a significant amount of useful information available to help both tenants and local authorities.
David Holmes, senior policy adviser for the private rented sector at the Department for Levelling Up, Housing and Communities (DLUHC), said of the portal:
While the private rental sector has seen many recent changes to legislation as punitive, there are clear advantages to this over the more costly licencing initiatives that have attempted to clear the industry of bad actors. However, much of its usefulness to both the industry and to tenants will rely on its implementation.
What this means for Wirral landlords
For the moment, there are no imminent changes, but, in the medium-term, there will likely be slightly more bureaucracy to content with. Again, however, how much will depend on implementation. The correct systems could see integration with changes brought about by the ‘making tax digital’ initiatives, with property passports handled in a central location and managed from a dashboard, while poor implementation could see weeks of photocopying and sending documents back and forth to various government offices.
Such a huge change, combined with the recently discussed loss of more than ninety thousand civil servants, seems to be suggestive of a government that has failed to give sufficient thought to the project before announcing it for the headlines. As such, it would be beneficial for landlords to start ensuring that they are maintaining a well organised and, where possible, duplicated file of relevant documentation in an effort to plan for the worst while the whole sector hopes for the best.
Need help making sure your paperwork is up-to-date and futureproofed against changing legislation? Contact Us to see how we can help take the pressure out of your portfolio.
Government ‘Regulation of Private Renting’ Report Released
With recent legislative changes appearing punitive to many landlords and with tenants and tenant charities claiming that not enough has been done, it should be welcomed that the report from The Department for Levelling Up, Housing and Communities seems to agree with both.
What the report says
The report, which is extensive, begins with an introduction that is firmly damning of a The Department for Levelling Up, Housing and Communities (referred to as ‘The Department’) and a sector that has been improperly regulated for far too long, leading to confusion, complexity and an inability for local authorities to properly police the legal obligations of landlords in their areas. This is followed by six ‘conclusions and recommendations’:
- It is too difficult for renters to realise their legal right to a safe and secure home.
- Local authorities do not have the capacity and capability to ensure an appropriate level of protection for private renters.
- The Department is not doing enough to support local authorities to regulate effectively.
- Local Authorities are constrained by the Department’s approach to licensing landlords.
- The Department lacks good enough data to understand the nature and extent of problems renters face.
- The Department’s forthcoming White Paper offers an opportunity for significant improvement to the private rented sector.
- Alongside its Treasury Minute response the Department should write to the Committee to set out how it will use its planned reform programme to:
- Better support renters to understand what their rights are; and
- Improve renters’ ability to exercise their rights by learning from complaints and redress mechanisms used in other consumer markets.
- The Department should conduct a realistic assessment of the resources needed for local authorities to regulate effectively, with consideration given to the size, types and quality of private rented properties and the demographics of renters. The Department should write to us within the next six months with an update on the outcome of this assessment.
- The Department should take a more proactive approach to supporting local regulators and sharing good practice. To do so, it should learn from other consumer protection systems that provide central intelligence and support to local regulators.
- As part of its planned reforms, the Department should assess whether current arrangements for licensing schemes are working, and whether alternative arrangements may be more efficient and effective.
- The Department should develop a coherent data strategy to identify and collect the data it needs to:
- understand the problems renters are facing; and
- evaluate the impact of legislative changes.
- Once complete, this strategy should be shared with this Committee and the Levelling up, Housing and Communities Committee.
- As part of its planned reforms, the Department should ensure it has a full understanding of the cumulative impact of proposed changes on tenants, landlords and the housing market as a whole. In doing this, it should work closely with other departments, including formally where appropriate, to understand how the reforms may affect or be affected by other policy areas such as benefits and tax.
Overall, the bipartisan report reasonably addresses some of the many and varied issues currently faced by both landlords and tenants in the UK. This is nowhere more evident than in the comment:
Due to the Department’s lack of robust data, it does not have a good understanding of the impact of these changes on both landlords and tenants.
The report consistently points out that introduction of legislation has been disjointed and has consistently led to poorly understood and complex regulatory landscapes that change from one area to another both in implementation and enforcement.
While long overdue, this should be a welcome call for the proper collection and analysis of data so that the broader impact of new legislation on tenants, landlords and the housing market will be better understood. Ben Beadle, Chief Executive of the National Residential Landlords Association, released the following statement in response to the report:
What the report means for Wirral tenants and landlords
Despite many positives in the report, the end result is – at this point – simply a call for further reports. However, though things often move slowly in the world of politics, overcoming the inertia to get the ball moving initially is a huge victory.
In the mid-term, though, there is a lot to be positive about as the report makes official observation of the many complaints that landlords and tenants throughout the UK have long made. The advice for regulation and enforcement to model itself on more successful areas such as consumer protection is a comparatively progressive move, while calls for there to be further (or any) consideration of how regulatory and legislative changes can impact both the sector more broadly, as well as other policy areas such as benefits and tax.
One thing (mostly confirmed by a recent job advert) which now appears a virtual certainty, is the landlord register which, as the above report found ‘[an] estimated 13% (589,000) of privately rented homes in England have at least one category 1 hazard—a serious threat to health and safety that landlords are legally obliged to address’, should prove a positive for tenants nationwide.
What happens next is a wait of six months to see what the required government response is to the assessment of local resources required for proper regulation (the one recommendation carrying a time limit) and to see whether the second requested report is allocated to a committee.
These things seldom provide concrete details, but the recommendations here are generally of the kind that both landlords and tenants have both requested for too long.
Want to make sure you know your rights and responsibilities in an everchanging industry? Contact Us to see how our experts can help.
March Sees Largest Single Month Rise in House Prices for Six Months
While consistent upward pressure on house-prices will have negative effects on first-time buyers, it may provide welcome relief for landlords looking for ways to fund renovations and upgrades required to meet new energy efficiency standards.
Regular readers of the stories we read here will be familiar with the huge rise in Wirral property prices that was supercharged by the pandemic, and our commentary that this would likely continue to at least the middle of the year. While things are in constant flux from a macro-economic and political level, it seems that upward pressures have, so far, been sufficient to overcome several opposing forces (such as the reduction of buying power caused by recent excessive energy bill increases and poor wage growth).
Quoted in the Financial Times, Chief Executive of mortgage broker SPF Private Clients, Mark Harris, said that “lenders are still keen to lend and have plenty of cash available to do so, enabling borrowers who are maybe sitting on considerable savings accrued during lockdown to stretch themselves to afford a bigger property”. This is only part of the story, however, as buyers are not the only factor to consider – as the Managing Director of Halifax, Russell Galley, stated:
As we’ve made mention previously, however, such price increases are unlikely to continue at such a pace for the rest of the year and, as various economic and global issues begin to bite, the anti-inflationary forces are likely to see house prices stabilise in the second half of 2022. On this subject, Galley had this to say:
What this means for Wirral landlords
As stated, in the short term this can offer landlords some short-term relief – the region has seen above average increases in property prices and that increase in capital value, if leveraged correctly, could help to offset the potentially costly improvements to rental properties required to meet changing EPC requirements.
With interest rates still extremely low considering inflationary pressures, landlords considering using capital increase to make improvements should do so fairly quickly, however. Long periods of inflation will tend to lead to higher interest rates and while things are unlikely to reach the levels of the 80s and 90s, the moment is right for landlords to make the most of low interest rates and high levels of capital value growth to make improvements that will benefit both their portfolio and their tenants in the long-term.
In addition, with Wirral properties still generally priced below the UK average, there is also a strong argument for investors from outside the region to add Wirral properties to their portfolio.
We’re at a moment when current affairs are tough enough to keep up to date with, without the additional need to follow the fast-moving world of the property market. Considering seeking some help making the most of your property portfolio? Contact Us to see what our experts can do for you.
Tenancy Deposit Scheme (TDS) Report Indicates Confusion Around Garden Maintenance
Since the COVID-19 pandemic, outdoor spaces have become a major factor in the decision-making process for tenants during their property search, but a recent poll by the TDS has found that landlords and property agents are unsure as to whom the responsibility falls for upkeep.
What the poll says
According to the annual statistical briefing from the TDS, Gardening has been among the top five causes of deposit disputes for the better part of a decade and has been a reason for dispute in around 15% of cases throughout that time.
As a result, the TDS polled more than 2000 landlords and letting agents (combined) to measure the general attitudes of the sector regarding garden maintenance. While the results aren’t exactly surprising, with around three quarters of respondents placing the responsibility solely on the tenant, what was shocking was how many of those surveyed did not provide detail as to what is required of tenants in this respect – with 46% not providing any details at all.
Most common causes of dispute
The TDS poll also details the common causes of garden related issues which led to a deposit dispute. 27% of landlords surveyed had raised a dispute of which the following were the most common complaints:
- 75% were listed as ‘allowing weeds to grow’
- 41% were listed as ‘damage to fencing’
- 68% were listed as ‘overgrown lawns’
- 65% were listed as ‘tenant did not trim back trees or bushes’
Lack of inspection
Despite this, a fifth of landlords do not carry out a mid-tenancy inspection of outdoor areas – missing the opportunity to address problems early and the possibility of avoiding a dispute altogether.
What this means for Wirral landlords
The main consideration when setting up a tenancy agreement should be clarity for all parties. While section C of the Model Agreement for an Assured Shorthold Tenancy includes reference to the garden and a tenants obligations, landlords should be making certain that the agreements they are using detail the expectations for upkeep clearly. The agreement should offer guidance on upkeep, while the landlord should also ensure that communication is maintained during the tenancy as this will help to avoid unnecessary disputes.
For this reason, we recommend including gardens and outdoor spaces in your property and inventory reports and ensuring that, whether or not you’re using the Model Agreement for an Assured Shorthold Tenancy, that your initial contract is clear about the responsibilities of each party – as this will avoid the majority of disputes and quickly settle the rest.
Want help navigating the rapidly changing regulatory landscape, or need someone to take the stress out of managing a property portfolio? Contact Us today to see what we can do to help.
Report Shows Tenants are Generally Happy with Landlords and Rental Properties, But Not Renting
Although it’s been a tough couple of years for landlords – with coverage in the media largely negative, and the regulatory landscape seeming to visibly shift under foot, the report is generally positive, reinforcing the part that the private rental sector plays in access to housing.
What the report says
With the private rental sector under the magnifying glass a lot over the last few years, the report examines the current state of industry and uses historical data to predict possible trends. In addition to this, the report seeks to make suggestions on policy to encourage an equitable progression.
It’s a dense piece of analysis, split into several sections. While we may cover other chapters in coming weeks, we’ll be focusing today on chapter two, which is titled: Is Private Renting So Bad?
In accordance of Betteridge’s law of headlines, the report concludes that no, it isn’t really as bad as we’ve perhaps been led to believe by widespread coverage of ‘rogue landlords’ and unliveable conditions. The report itself, in the executive summary, states:
The chapter essentially concludes that it is not actually their properties or landlords that leave renters dissatisfied, but the state of being a renter. Even then, across all demographics, the level of dissatisfaction is relatively low.
Levels of satisfaction
As you may expect, older private renters are the most content demographic – with 74% of those 55 and over reporting that they are satisfied with being a renter. Early-middle-aged private renters (those between the age of 35 and 54) are the least satisfied group – with 58% expressing satisfaction. What may come as a surprise is that parents report a similar level of satisfaction as those without children (58% and 56% respectively).
This remains relatively consistent across regions, too – though there are significant deviations in Scotland, the South West of England and Northern Ireland (though the latter is from a very small sample size). The North West sits pretty much on the average, with 64% of respondents expressing satisfaction with being a renter.
Impact of the pandemic
When tackling the pandemic, the report echoes many of the articles we’ve written over the last year or so – people’s priorities have changed, they prioritise outdoor space, dedicated working spaces and are more likely to consider living in rural areas (provided the broadband is up to scratch!). None of this is too surprising – what is interesting, however, is that it has also confirmed that renters are feeling less secure since the pandemic, despite the coming end of no-fault evictions and other measures to improve housing security.
What this means for Wirral landlords
In essence, the report confirms some ‘common sense’ assumptions about the sector, and the North West ranks sixth out of the twelve listed regions, suggesting that Wirral landlords are performing at least as well as average. What should provoke some thought is the final point – tenants feel less secure (specifically with fixed term contracts). It may serve landlords well (at least those looking to keep their properties for the long-term) to begin looking at longer term or rolling contracts for good tenants to help improve their feelings of security.
Want some help keeping up with the latest research, on top of the latest legislation – or just want to take the stress out of managing your property portfolio? Contact Us today.
End Date for Right to Rent ‘Temporary Checks’ Extended
According to the latest information, positive feedback regarding the ability to use IDTV (Identification Document Validation Technology) has led the Government to defer its planned end-point.
While the last few months have seen little overtly positive news, there have been some concessions for UK landlords. Along with being granted a little more time to adjust to the ‘making tax digital’ legislation, this change – according to the Government, will ensure that:
This means that there is now updated advice for any landlord looking to carry out right to rent checks up to and including the 30th of September this year.
- Checks can, until the deadline, be carried out via a video call.
- Tenants can send scanned documents, or photographs of documents using email or mobile apps to avoid sending original documents.
- Landlords will need to use the Home Office Landlord Checking Service if a tenant (existing or prospective) cannot provide any of the accepted documents.
What this means for Wirral landlords
Nothing much has changed as a result of the announcement, but it does provide landlords worried about the end of the temporary checks a chance to have things in place by October 1st. For the time being, landlords will need to ensure that they follow the required processes:
- Tenants should be asked to submit a scanned copy or photograph of their documents.
- A video call should be arranged with the tenant who should be asked to hole the original document up to the camera for comparison with the digital copy.
- The date of the check should be recorded and marked ‘adjusted check undertaken on [date] due to COVID-19’.
- If the tenant has a current BRP/BRC (Biometric Residence Permit/Card), or has been granted settled status, landlords can, once the applicant has granted their permission, use the online right to rent service.
Note: If a tenant does not have the right documents, you should contact the Home Office Landlord Checking Service. Once you have submitted a request, you’ll receive an answer within 2 working days which must be kept to protect against a civil penalty.
While the transition to digital is often slow and messy, new regulations and digital services are proving to be beneficial – especially to landlords with larger portfolios. For those with single properties, or new to the industry, it can seem daunting to be responsible for legally mandated checks, but provided all reasonable steps have been taken and documentation is kept safe, there should be nothing to worry about.
If you’d rather have an expert in charge of such things, however, you can Contact Us and we’ll do what we can to take the stress out of managing your property portfolio.
Direct Line Reports 24% of Surveyed Landlords Are Not ‘On Top Of’ Changing Regulations
The study, which also found that 36% of those landlords struggling were finding it tough due to the pace of change, shows how necessary it is for the UK Government to improve how they communicate changes to an industry that serves a vital role in the UK.
What the study found
While the headline figures of the recent press release are concerning enough, the study reveals a rapidly changing regulatory landscape that is leaving some landlords behind, but also causing undue stress. 58% of respondents to the Direct Line survey revealed that keeping on top of regulatory changes while a third of those are considering selling their properties as a result.
Overall, the study found the following figures when asking about upcoming regulatory issues:
|Regulatory issue||Proportion of landlords who are not aware of the issue|
|Licensing scheme changes||16%|
|The possibility of health and safety regulations||15%|
|Additional sustainability standards to conform to||13%|
|New smoke and carbon monoxide alarm requirements||12%|
|Changes to filing deadlines for reporting and paying capital gains tax on the disposal of properties||11%|
|Planned changes to minimum standards for Energy Performance Certificates||10%|
|Inflation and the effect this could have on buy-to-let mortgages||7%|
At a time when the private landlord sector is performing an invaluable service due to a failure by successive governments to meet promises on house building, it is concerning to see so many individuals potentially facing unpleasant surprises as the coming 12 months to 2 years hold numerous changes.
Landlord Business Manager of Direct Line Business Insurance, Jamie Chaplin said the following:
What this means for Wirral landlords
There are, according to the HMRC, more than 2.5 Mn landlords in the UK – this means that, if Direct Line’s data is to be believed, there could be upwards of 600,000 landlords currently at risk of facing fines or civil claims simply because they have not been able to keep up to date with changing legislation. By the law of averages, some of those will reside or own properties in Wirral – and that is a serious cause for concern.
While, clearly, it’s in our interest to recommend working with an agent to ensure that your properties are all being let in accordance with the latest regulations and legislation, it is difficult to see how the traditional part-time landlord will be able to continue to operate if the pace of change continues.
For landlords who are simply using properties to prepare a nest egg for retirement – most of whom will work a primary job – the burden seems to be increasing all the time and the questions will surely need to be asked soon: is this investment worth the time it takes me to remain legal? Should I work with an agent, or look to invest my money elsewhere?
This, to us, is a real shame – we work with some fantastic landlords, and regularly hear stories about the growing pressure they faced before working with us. We can only hope that communication improves soon and allows landlords to do as the majority have always done – supply great properties for people that need them.
If you’re worried about the pace of change and the number of changes on the way, why not speak to one of our experts? Contact Us to see what we can do to help relieve some of the pressure of managing your property portfolio.
Zoopla’s Q4 2021 UK Rental Market Report Digested
Chronic shortages in supply of rental properties have boosted rental prices, while the ending of various COVID measures has increased activity in city centres, but Zoopla’s latest report predicts slower rental growth in the second half of the year.
What the report says
The report, as a whole, tracks with the trends we’ve covered here over the last year – and also details the first signs of the slow-down in rental growth we predicted back in January. As anticipated, the report shows a return to pre-pandemic levels of rental value in city centre locations, while growth remains high in all other areas.
While rental growth has been seemingly supercharged, it has largely kept pace with earnings – this means that affordability remains at around a third of the average income in the area. Head of Research at Zoopla, Gráinne Gilmore, is quoted in the report as saying:
- Rental growth reached +8.3% in Q4 of 2021 with demand growing and a chronic shortage of supply
- Rent as a proportion of a single earner income (37%) is broadly in line with the 10-year average (36%)
- London rents are up +10.3% year-on-year, recovering to just £18 a month more than March 2020
- Rental demand is up 76% January compared to January of 2018-2021
- Cumulative growth is 12%, marginally below increases in average earnings over five years
- As demand falls in coming months, this will put the brakes on rental growth
One thing this report doesn’t cover, as the data just isn’t available yet, is whether landlords have been exiting the sector as has been the predicted outcome of recent legislative changes from some agencies and industry commentators. Any drop in available rental stock caused by landlords leaving the sector is unlikely to be replaced by the burgeoning build-to-let industry, which is likely to again put upward pressure on rental prices.
This is likely to be a determining factor if not this year, then certainly in the not-too-distant future. Unless various political promises on social housing are kept, the increase in rental demand and a shrinking pool of rental properties could have extreme consequences on a societal level – making it all the more important that calls for assistance meeting tougher energy efficiency targets are heard and acted upon.
However, as things stand – without more information – Zoopla makes the following statement in the report:
Provided the level of rental properties remains relatively stable, it’s safe to assume that this will be the case.
What this means for Wirral Landlords
For the moment, Wirral landlords can remain fairly optimistic as yields remain high and the minor adjustments to interest rates seem unlikely to return mortgage rates to those of the 80s and 90s. Instead, with landlords able to reassess rental values in between contracts, there should be a focus on diverting additional rental income toward raising energy efficiency standards, ensuring that they remain within the guidelines (set to change, advice pending) on smoke and carbon monoxide alarms in order to avoid large bills further down the road.
Want a little help keeping up to date with trends in the industry? Contact Us and speak to one of our experts to see what we can do for you.
Levelling Up the Rental Sector?
The phrase ‘rogue landlords’ has been a common one over the last few years – with dozens of articles in national press highlighting the damage done by disreputable landlords. While the increased focus has done little to rid the sector of bad actors, new plans may improve standards for tenants and most landlords.
What the white paper says
While the majority of the white paper is dedicated to other areas of the ‘levelling up’ program the government has been promoting for the last few years, the section that concerns Wirral landlords and tenants deals with their ‘mission to improve housing conditions’. The majority of the rhetoric is aimed firmly at the archetypal ‘slum landlord’ – the kind that makes the papers for excessive damp or dereliction, and (at least at this stage) should cause little consternation in the wider population of law-abiding landlords.
They set out four areas of focus – these are:
- Introducing new legislation to improve the quality and regulation of social housing – including providing performance information so that tenants can hold landlords to account and to ensure ‘quick and effective action’ is taken to rectify issues.
- A second white paper set for publication in the spring which will consult on introducing a legally binding ‘Decent Homes Standard’ for the private rented sector.
- Exploration of a ‘National Landlord Register’ to put an end to repeat offenders and allow tenants to check historical performance of landlords.
- Bringing forward other measures to ‘reset the relationship’ between landlords and tenants, including finally ending section 21 evictions.
This, the white paper states, will contribute to a ‘secure path to ownership’ and an increase in first-time buyers while reducing the number of sub-standard houses by 50%.
Responses to the white paper
As with any assortment of promises from central government, there were positives and negatives for advocates on both the landlord and tenant relationship. The Director of Generation Rent, Alicia Kennedy, for example, stated the following:
While many landlords may see this as a blanket generalisation, there is little doubt that there have been landlords that have earned the criticism – even though they may be in the minority. The truth, as in most cases, may fall somewhere between spokespeople on both sides of the debate, between Generation Rent and Chief Executive of the National Residential Landlords Association, Ben Beadle, who said:
It is certainly the case that the UK is severely underserved by the availability of publicly owned social housing, and that private landlords have been expected to fill a large and growing hole in government provision for the most vulnerable. However, Beadle is right to say that legislation has to directly tackle the root cause rather than just increasing the burden on the responsible landlord.
What this means for Wirral landlords
As we always say when topics such as these reach the level of comment – for the most part, legislation on decent homes should be of no real concern for the majority of landlords. In fact, for most landlords, their attention would be far better directed toward the potentially more troublesome changes to minimum EPC ratings that will come in to force this year.
The landlords we work with, and those we speak to, take great pride in providing properties that their tenants will be proud to call home, and legislation is unlikely to raise the minimum standard above what they are already looking to provide. Any effort to push rogue landlords out of the market should be welcomed by the rental sector at large as they undermine confidence in and cast a shadow over landlords as a whole.
What this means for Wirral tenants
Due to the number of properties that renters are likely to live in over the course of a decade or more of renting from the time they leave home, tenants are far more likely to meet one of the ‘rogue landlords’ that such measures as those outlined by the government are hoping to combat. While it remains to be seen whether the current government has the will to carry out such legislative changes, it’s a change that should be embraced.
As Matt Downie, Chief Executive of Crisis, put it:
Even though it may be a small percentage of landlords that fall into such a category, tenants have been failed both by legislation and by the availability of social housing, and too many have experienced such conditions. Hopefully changes to legislation will clear the sector out, allowing it to become a well-regulated step on the road to ownership, with social housing providing a safety-net.
At Wirral Homes, we ensure that we match great tenants with great landlords. If you’d like our help finding a property, or like our help to ensure they find your property, Contact Us today.
Zoopla’s December 2021 UK House Price Index Report Digested
With house prices climbing in excess of the already steep 4.2% of 2020 and available housing stock down by 15% year on year, the message sent by the latest report is that the current growth in house prices is not quite over.
What the report says
The overall report paints a relatively optimistic portrait of the current market conditions in the UK as a whole. Despite the number of houses available for sale being 44% lower than the five-year average, this imbalance is slowly reversing, and the total supply is building gradually since the turn of the year. In addition, while inflation may be dominating the news cycle, the report reminds us that, even with interest rate rises of a few quarter points from the Bank of England, mortgage rates are still unlikely to reach the levels of 2012.
In addition to this, Gráinne Gilmore, Head of Research for Zoopla also points out that house prices are still being pushed up by issues peculiar to the pandemic:
Overall, the report states, house prices have grown by 7.4% on average, hitting £242,000 (a rise of around £17,000 during 2021) with Wales and the North West leading the way in terms of percentage growth (although still below the national average for overall average price). The demand is not just for family homes, however, having grown across the board:
The overall message of the report, therefore, is one of cautious optimism – the significant imbalance between the demand and supply of homes for is likely to continue to apply upward pressure on prices, which will offset some of effects of the likely economic turbulence ahead in 2022. Zoopla expects the average home value to rise by around 3% over the course of the year, which will range from 2% in London to around 4% in the North West and East Midlands. They also forecast around 1.2 million transactions, which, though a 300,000 drop from last year’s total, will keep it in line with the five-year average.
What this means for Wirral landlords
While, like all UK residents, landlords will likely face their fair share of financial issues in 2022 due to an end to Universal Credit uplifts, government inaction over COVID arrears and various regulatory changes, the rising house prices in the region position Wirral landlords better than most to face the year ahead.
With the right approach, landlords may be able to pay for energy efficiency improvements by restructuring their debt and releasing some of the value from their portfolio to upgrade their properties in the knowledge that their properties are likely to increase in value enough during the year to offset their outlay.
In addition to this, the market suggests that there is still room to improve the yield on many Wirral properties – which are still let at prices not just below the UK average rental price, but also below the average affordability level. This means that landlords with contracts coming to an end could see both the prices of their properties increase throughout 2022, but also the average yield of their properties – even if they need to invest in improvement work.
If you’re dreading the work involved in meeting various legislative changes, or aren’t sure where to start to make the most of positive changes in the market, why not Contact Us to see if our experts can take a little bit of the stress out of managing your portfolio?
NRLA Criticises ‘Broken’ System as Benefits Cuts Cause Rent Arrears
Just shy of one and a half million renters in the private rental sector were receiving Universal Credit as of August last year – included in which is a housing cost component – more than half of these already had a shortfall between this support and the rent they paid.
While the Bank of England has raised interest rates to combat inflation, central government has dealt with a growing disparity between benefits and cost of living by cutting the £20 per week pandemic payment from Universal Credit recipients.
With around 800,000 renters in receipt of Universal Credit already experiencing a shortfall in August of 2021, prior to the cut in October 2021, the cut has yet to be truly felt by landlords throughout the country. Added to this a huge level of inflation and ‘shrinkflation’ (where the price remains the same, but the amount of product decreases) at the lower end of the scale in terms of the average weekly shop, and there’s an imminent crisis in the private rental sector.
With households facing a cost-of-living squeeze, it is vital that the benefits system gives the protection that tenants deserve. That is why the Chancellor needs to end the housing benefit freeze as a matter of urgency. Without this, many tenants and landlords face an uncertain future about how to keep tenancies going.
With the English parliament already lagging behind the other home nations in help for landlords with pandemic caused arrears, calls for them to back landlords – who already carry a significant proportion of the social housing burden due to stagnating council house building in the last decade – are intensifying.
For those that have been reading articles here and elsewhere, it will come as no surprise that this could lead to an increasing number of landlords refusing to accept tenants on benefits, leading to a worsening crisis in social housing.
With demand at an all-time high driving up the possible rental yields for landlords throughout the country, there will clearly be a case for even the most committed social landlord to avoid tenants that could fall victim to rising costs and shrinking benefits. This shows a remarkable short-sightedness from central government, who will inevitably face growing costs associated with emergency housing, strain on the NHS, rising homelessness and more.
What this means for Wirral landlords
With Wirral landlords already more likely to house social tenants than much of the rest of the country (55% of adults in the North West claim state benefits, making it the joint fifth highest in the country), many landlords will have already felt the impact of the cuts.
With this in mind, for those landlords committed to offering high quality, safe housing for their tenants regardless of benefit status, it may be that the best route forward is to seek the reassurance of a guarantor agreement from new tenants.
The year ahead is already likely to be an expensive one for private landlords due to stricter EPC requirements, so the issues arising from activity in Whitehall are beginning to look less like oversight and more like mismanagement. The only real actions available to landlords for the moment are to ensure that there are contractual terms in place to cover arrears, and to contact their MPs to petition the government for long overdue relief packages for the private rental sector and those on the lowest incomes.
Need help preparing guarantor agreements, or in keeping up with the latest legislative changes impacting the sector? Contact Us to speak to one of our experts and let us take the stress out of managing your portfolio.
HomeLet’s Latest Rental Index Report Digested
Although we don’t see huge departure from the trends we’ve mentioned in recent articles, there is much to be said for keeping on top of the latest insights from companies like HomeLet, which can help landlords to know which way the wind is blowing within the sector as a whole.
What the report says
Essentially the report outlines many of the trends we’ve covered here over the last year – including in write-ups of Zoopla and HomeLet quarterly reports. There is a tracking of the increase in rental prices and discussion of the various factors driving those rises – the work from home revolution increasing demand in more rural areas, for example, and the quest for space, to name just a couple.
While the majority of the report is pretty London-centric, there are some interesting sections breaking down 2021 by region which will provide some food for thought for landlords outside of the capital – especially for those looking to examine the rental value of their portfolio.
One interesting comment, which comes at the front of the report, however, is from Andy Halstead, Group CEO of HomeLet and Let Alliance, who is quoted as saying:
We expect to see some increased variation in rental prices in December compared to 2020. The lockdowns and restrictions impacted demand in many areas. A positive aspect is that we’re seeing demand in urban areas increase after the shift last year to property in commutable locations, outside towns and cities.
This seems to be the crux of the report which, while it does touch on other issues, is understandably focused on the economic outlook for landlords. There is, however, already substantial variability in rental prices across the UK, and predicting an increase in this gives us little to get our teeth into. As such, looking at the data in the report, we’re comfortable to stick with our prediction for the region – that rental prices are likely to rise both in response to demand and inflation – though perhaps not as much as we’ve seen in the last couple of years.
What this means for Wirral landlords
While the private rental sector in the UK has undoubtedly become more profitable at the most basic level (yields and property value are rising while there have been no major tax reforms that would undermine that growth), the HomeLet report points out something else we’ve mentioned here before, stating:
It is the amount of work that is currently causing headaches in a sector where, typically, many participants have a main occupation and let property as a secondary investment for the future. Such changes are going to make it increasingly difficult for landlords to find the time to keep up to date with legislation, not to mention implement necessary changes.
There is some good news for landlords, however, as the report also shows that despite increases in rental prices, the market has maintained rental prices at around the same level – some 20% below the national average.
With the North West therefore currently statistically one of the cheaper places to rent a property, there is an argument to be made that those landlords with contracts about to end, or who are just entering the private rental sector, will need to evaluate the market potential of their property.
The average tenant will presently spend around 30% of income on rent – and while the North West is around the middle of the pack where affordability is concerned, there will need to be close examination of rental prices as 2022 promises to be an expensive year due to incoming legislation on energy efficiency, and smoke and carbon monoxide alarms.
Need some help to take the stress out of managing your property portfolio? Why not Contact Us to see what we can do for you.
Could 2022 See Another ‘Quest for Space’?
January has historically been a big month for house sales, but also sees many tenants begin their search for a new property. While the private rental market has been settling for the last quarter, rumours of a potential January lockdown may lead to an increased interest in a change of scenery.
Although there are many questions to be answered about private rentals throughout the rest of 2022 – how tax changes will impact the sector, whether pet friendly lettings will become the norm, whether the government will get around to replacing the green homes grant, and many more – but while we’ll be covering those as the data arrives, January could answer two such questions pretty quickly: will the country face further lockdown restrictions and will that impact the rental market?
The prospect of another lockdown
Though it’s not what anyone wants, there seems to be a growing consensus that a ‘circuit breaker’ lockdown may be required at some point in January as the Omicron variant of COVID becomes the main variant globally. From virologists to spokespeople for the NHS, experts are increasingly concerned at the spread of the virus and worried that hospitals will soon be overwhelmed.
While the government has implied an ideological opposition to further lockdown measures, there have been similar statements preceding previous lockdowns, so it’s difficult to tell from the information provided by ministers. However, with many in government having been even more emphatic than ever about their opposition and any vote likely to face stiff backbench opposition, it’s likely that only the very minimum will be done, and likely at the last possible moment.
In fact, it’s likely that the government will be keen to put their eggs in the vaccination basket and hope to be given the chance to ‘see how things go’ until the February half term. This, however, is likely to see a softer tiered lockdown brought in toward the end of January in an effort to avoid school closures – which may not negate the need for a ‘circuit breaker’ anyway.
How could this impact the rental market?
Hot on the heels of a winter break, the impact of a further lockdown is likely to be small – there is a general reduction in outdoor activity at this point of the year, and the impulse to move will likely be tempered by the general impact on spending power that January tends to see.
The influence of any possible lockdown will likely be amplified as we get closer to spring. With the winter solstice now behind us, the gradual return of evening light could see people compelled again to seek out a change of living arrangements – whether to be closer to parks, or just for more space if a lengthier lockdown looks likely.
What this means for Wirral landlords
Although there are no guarantees, any increase in the movement of tenants – and the consequent ending of contracts – could represent a moment for landlords to review rental prices in their area. With rental property in huge demand, and Wirral still below the national average for rental prices, it may be useful for landlords to approach an expert and have the market rate for their properties properly re-evaluated.
Although huge hikes are unlikely to be required, work will soon be required to reach new minimum energy efficiency requirements, and this should be factored in as landlords seek to re-let their properties.
Need a little help navigating the world of private letting, or want our help to evaluate the rental prices of your properties? Contact Us today to speak to one of our experts.
5 Things for Landlords to Look Out for in 2022
2022 will see further legislation on a host of issues important to landlords and tenants alike – and no doubt some which may only impact one or the other, so we’ve put together a list of a few things we believe will be important to keep your eyes on over the coming year.
1. Energy Efficiency
With new tenancies requiring an EPC rating of at least a D from April 2022, landlords will need to spend the early part of the year ensuring that their properties are up to scratch. With plenty of issues caused by confusion and mismanagement at a governmental level (including the collapse of the Green Homes Grants), however, there are plenty of calls for more help for landlords. Propertymark CEO Nathan Emerson stated:
While there’s not much landlords can do beyond writing to their MPs to address the situation at present, calls for further help, or at least more time, may be bolstered by the ongoing pandemic.
2. Changes to legal advice for tenants
With the consultation set to end on the 20th of January, the next year will likely see the introduction of new ‘on-the-day’ legal advice for tenants facing eviction. The changes – which we covered earlier this month – aim to reduce the need for disputes to reach the point of eviction by ensuring that tenants receive timely and appropriate legal advice from early in the process.
While the wheels of government turn slowly, these changes are a fair way along the road to introduction, meaning that tenants and landlords should ensure that they are keeping up to date with changes. Hopefully this will lead to positive outcomes for both landlords and tenants nationwide by reducing the number of disputes that reach a point of critical failure resulting in eviction.
3. Updated guidance on alarms
Announced in November, guidance on where alarms must be placed in rental properties is set to change following consultation. Though the government has yet to publish its promised guidance, it’s likely to come in the first quarter or 2022 – and with councils set to receive new powers to ensure compliance, it will be necessary for landlords to keep up-to-date with the process to avoid any penalties that could result.
The new regulations, as far as we know at present, will not require landlords to go too far beyond best practice guidance, but will see an increased burden of responsibility to ensure that alarms are kept in working order or replaced when this is not possible.
4. Interest rate rises
It may be time to lock in an interest rate, it seems, as the Bank of England seeks to address inflation by planning to raise interest rates between one and three times in the early part of 2022. Inflation, which negatively impacts the buying power of UK citizens, but importantly also reduces the value of debt, is historically linked to either cost-push (increasing cost of business) or demand-pull (more money being spent than usual). During the pandemic and ongoing problems with Brexit, both situations are true at once – making for an increased upward pressure.
Rather than address issues with supply and increasing minimum wage (minimum wage increases, while being an upward pressure on inflation, has been proven by government research to have a small impact with a 10% increase in minimum wage expected to lead to a 0.02 to 0.11% increase in the price of goods) which could address both sides of the equation, the Bank of England will look to restrict the flow of money by increasing the overall value of debt. This, along with a rise in national insurance rather than progressive tax initiatives, will more severely impact low- and middle-income households – meaning that landlords should both look for a move to a fixed rate mortgage and potentially for rent insurance in case the changes lead to another recession and the issues that can cause the rental market.
5. Renters’ Reform Bill
While the true impact of the long awaited ‘Renters’ Reform Bill’ will likely be felt in 2023, the initial report will allow landlords to begin planning for when the changes are implemented. With a large number of changes expected for 2023/24, any progress that landlords can make in addressing the proposed changes in 2022 will allow them to focus their attention on the other issues on the horizon (such as the making tax digital deadline). The likely changes include:
- The end of Section 21 evictions, replaced by more comprehensive Section 8 guidance
- The introduction of ‘lifetime deposits’ for tenants to reduce costs associated with moving between rental properties
- Opening the database of rogue landlords and letting agents to the public to improve transparency
2022 still sees landlords facing the uncertainties of Brexit and the pandemic, but there are also more predictable issues that landlords will need to prepare for in the new year. If you’d like some help navigating them, then you can Contact Us for expert advice.
Improved Legal Advice Could be Made Available to Tenants Facing Eviction
While met with scepticism in some corners of the rental industry, the benefits of early intervention in the case of rental arrears and financial problems are well established – including in a meta-analysis of peer reviewed studies.
With homelessness impacting more than 200,000 people in England alone, and post-pandemic evictions still rising, central government is conducting a consultation (set to end on the 20th January 2022) on a proposed new model for delivering housing possession legal aid.
What the consultation is about
Aiming to preserve and broaden the ability for tenants to receive housing possession legal aid, the consultation is seeking to address the sustainability of the scheme. Parliamentary Under-Secretary of State for Justice, Lord Wolfson of Tredegar QC outlines the consultation as follows:
The key proposals in the consultation are:
- Allowing providers to claim for the court duty fee in addition to a Legal Help fee.
- Contracts to shift from larger geographical areas to individual courts.
- Expanding the legal aid HLPAS providers can offer to individuals facing procession proceedings.
- Remodelling and rebranding the current scheme, incorporating the existing service and adding early legal advice before court, become a new Housing Loss Prevention Advice Service (HLPAS).
- The introduction of a set attendance fee for all schemes, replacing the existing nil session payment.
The consultation has received provisional backing from The Law Society of England and Wales, and Society President I. Stephanie Boyce has stated:
What this means for Wirral landlords
While the tightening of rules around eviction were met with disappointment and frustration by landlords, there’s little evidence to suggest it has been a major barrier to eviction since the changes were introduced. There are also no suggestions in the consultation documents that would indicate it is intended to make the process any more difficult – instead it seeks to reduce the need for eviction.
With earlier interventions, the consultation is aiming to tackle the root cause of eviction through earlier intervention and, therefore, should be a net positive for landlords who could – depending on the outcome of the consultation – find themselves needing to apply to courts less often for repossession of their property.
What this means for Wirral tenants
At this point, there is no further assistance for tenants – however, the consultation hopes to combat a growing eviction and homelessness problem through the provision of early intervention. For most tenants – as with the Law Society – this is a promising start but will need further augmenting to be most effective. While legal advice is useful, it fails to address the root problem of many evictions and needs to add social intervention and debt advice before it can genuinely be considered a step forward for tenants.
Want help keeping up-to-date with ever-changing legislation, to find your new home or manage your property portfolio? Contact Us to find out how our experts can help.
Carbon Monoxide and Smoke Alarm Regulations Tighten
While there have been rules regarding the fitting of alarms and detectors dating back to 2015, new legislation is set to toughen requirements in an effort to save lives.
Wirral Homes has always recommended that landlords we work with are vigilant with regards the installation and maintenance of carbon monoxide detectors and smoke alarms; however, the high standards our landlords maintain are set to become the norm for the rest of the private and social rental sectors.
In a press release from central government, Minister for Rough Sleeping and Housing, Eddie Hughes MP said:
The legislative changes will involve the following updates to current guidance:
- Carbon monoxide alarms will need to be fitted in all rented properties with gas boilers or fires
- Carbon monoxide alarms will need to be fitted when new appliances such as gas boilers or fires are installed
- Landlords will need to repair or replace smoke and carbon monoxide alarms once they are told they are faulty
The cost of the new requirements will fall to landlords, with regulators set to be provided with further powers to ensure compliance with changes, and improvements pending to clarify reporting procedures and ease for tenants facing issues.
Jim Bywater, National Fire Chiefs Council, Domestic Detection Lead, is also quoted in the release, stating:
NFCC welcomes the changes which we believe will make many more people safer in their homes. We have campaigned for regulations to ensure that regardless of tenure, homes have adequate lifesaving detection.
The new regulations will contribute to reducing fire and carbon monoxide casualties and fatalities and bring consistency and greater protection to those living in both private and social rented homes.
The government has promised to update guidance relating to where alarms should be fitted – we’ll ensure we notify our audience as soon as possible.
What this means for Wirral landlords
Although this may seem to be just the latest in a long line of recent regulations imposed on landlords, there isn’t a tremendous difference between the present legislation and the currently released updates. The case for referring to these as ‘sensible’ changes is pretty strong – though we’ll need to wait for the full release of information before we can say for sure.
While some may see placing the financial burden on landlords for replacing alarms and detectors, it also ensures that properties are protected to the best of a landlord’s ability, while also offering legal protection which should not be underestimated as a consolation.
What this means for Wirral tenants
For tenants, there are seemingly no down-sides to the changes (as things stand), and it should be pleasing to hear that a right to safety – at least in this respect – is to be enshrined in law. As Eddie Hughes MP stated, the death of tenants from carbon monoxide and fire is needless and often avoidable, making it an overdue change to help keep tenants safe.
Need help finding a new home, staying up to date with legislative changes, or simply to take some of the pain out of managing a property portfolio? Contact Us to see how our experts can help.
Zoopla’s UK Rental Market Report Q3 2021
Zoopla’s Q3 report, unlike a lot of the last year’s news, makes for pretty pleasant reading for landlords who should be buoyed by inner city demand returning to normal as well as steadily rising demand and rental returns.
What the report says
With rental stock failing to meet demand by a large and growing amount, the report finds that the consequent increase in demand for those remaining properties has reduced the time it takes to re-let a property to 15% and has caused rental prices to increase above inflation for the second consecutive year.
In fact, the Q3 rental growth for 2021 has hit the highest levels since the 2008 global financial crisis – and demand has doubled in major city centres following a significant drop during the height of the pandemic, having just about overtaken pre-Covid levels, though the availability of property is 43% below the five-year average.
The report, however, does point out that despite the increase in rents, the affordability of rents has remained in line with the five-year average of 37% of income – and this, depending on the outcome of what has been termed ‘the great resignation’, may see these increased rents actually buck trends in 2022 if employees are able to maintain the influence gained by staffing shortfalls to increase the median wages.
While inflation is often seen as a negative for the economy, for net debtors – which includes the majority of landlords and tenants – above average inflation, especially if balanced by rising wages, sees the value of debt fall and the real-terms income rise, allowing for a later rebalancing of the economy and, barring government action, a greater level of affordability for tenants.
Six stats from the report
- +6.0% – annual change in rents, UK (excluding London)
- +1.6% – annual change in rents (in London)
- +4.6% – annual change in rents (UK average)
- 37% – affordability: % of salary to cover rent (single earner, UK)
- 15days – average time to let a property (UK average)
- £968 – monthly rent (UK average)
What this means for Wirral landlords
If the overall tone of the report is positive, the news for Wirral landlords is among the most positive. While rental demand has increased overall, the North West has seen above average growth in demand and rental prices.
This is driven, at least in part, by the changing way that certain sectors work, allowing workforces to relocate to more affordable areas of the UK. While many of the sectors that have moved to remote work will have an above average level of home-ownership, many of the properties they will have bought will have been those sold by landlords looking to cash in on rising house prices to upgrade remaining properties, or by those exiting the rental sector.
As such, there is ample reason for Wirral landlords to look at expanding their property portfolio – inflation is likely to reduce the debt-load in excess of increased price of purchase for most landlords with a portfolio, while reduced times to re-let will see a reduction in costly vacant periods. In fact, Wirral landlords are among the best placed to reap the benefits of increasing their investment – whether that’s through capital injection or through restructuring.
While the news has been mixed over the last couple of years – HMRC has repeatedly dropped the ball, the pressure to increase energy efficiency has not been ameliorated by substandard government schemes, and landlords have – like everyone else – felt the financial and emotional burden of a pandemic, but while the news is mixed, the present moment offers a real chance to exit a period of unique turbulence in a manner that will leave the last two years somehow having delivered net positive results.
If you’d like some help to take the pain out of portfolio management, or advice on how best to take advantage of an excellent time to invest in Wirral property, Contact Us and speak to one of our experts to see how we can help you make the most of your investment.
What the Autumn 2021 Budget Means for Wirral Landlords
Some of it we already knew, some of it was expected, but while the Autumn budget held few surprises, it did feature some relatively good news for landlords as a difficult year draws to an end and we begin to look to the 2022/23 financial year.
It has seemed to be both a long and a short year from moment to moment, but this budget – the first since pandemic restrictions were lifted in July – will doubtless receive mixed reviews from UK landlords.
1. Deadline extended for Capital Gains Tax
Although Sunak has called for an increase in the rate of capital gains tax, there has been no increase announced during this budget. While an increase has not been ruled out, the only mention of the tax during the autumn budget was that the deadline between selling a residential property and reporting to pay tax has been extended from 30 to 60 days as of the 27th of October. The Treasury has stated that the extended payment window ensures ’sufficient time’ to report and pay the tax.
This means that landlords looking to sell a property as part of a reduction in the stock they hold, or to use gains to reinvest in their portfolio, will not have to pay an increased rate of tax between now and the spring budget at least.
2. Covid-19 Debt Fund
While not specified in the budget, a concurrent announcement from the Department for Levelling Up, Housing and Communities revealed a £65 Mn fund to help tenants in rent arrears.
Set to be operated by local authorities in England, the scheme aims to help:
- Just under a million low-income households with rent arrears
- One and a half million behind on council tax bills
- One and a half million behind on electricity and gas bills
While there are various estimates on the levels of rent arrears (even the lowest of which would outstrip the fund), there have been calls from the NRLA for the government to do more.
3. Further promises on green investment
We covered news that landlords were to be eligible for heat pump grants earlier in the week. However, the budget also announced that there would be further investment to complement the Heat and Buildings Strategy. These include:
- £3.9 Bn to make buildings in England and Wales cheaper to heat
- £450 Mn to reducing the cost of heat pumps by 25-50 per cent by 2025
While the same is true of this as of the Covid relief package – that it’s little more than a start in the eyes of some – it does indicate that there are likely to be further incentives and schemes to help landlords reach EPC targets over the rest of the parliament.
What this means for Wirral landlords
Unfortunately, this is very much a ‘could have been worse’ budget for landlords throughout the UK – there could have been a capital gains tax rise, there might have been no rent arrears relief at all – but it certainly could have been better. There was no announcement on the required replacement for the Green Homes Grant, there has been no further details on how landlords will be helped to reach increasingly tough EPC targets.
However, while in some parts of the UK there has been a move by some landlords to exit the industry or reduce the number of properties in their portfolio, the North West, North East and Wales are still providing sufficient yields to help landlords to weather what has been a bumpy ride. This has seen increased investment in the region’s rental market from outside of the local area, but with housing stock still below demand levels, the market still has room for growth.
As such, Wirral landlords can take heart in the fact that, while the pandemic has been a mixed bag for the region – with house prices rocketing, re-let times plummeting, but rent arrears rising – there are reasons to be optimistic in the short to medium term, especially if the Wirral Council is able to secure separate, additional funding for the many environmental projects covered in its plans for the region.
Need help managing your property portfolio? Why not speak to one of our experts? Contact Us today to see how we can help take the pain out of portfolio management.
Landlords to Qualify for Boiler Upgrade Scheme
With demand growing for the government to provide more help for landlords to meet increasingly strict energy efficiency targets, the news that landlords will be entitled to apply for the £5,000 boiler replacement grants will be seen as a good start, but only a start.
Since April of 2020, privately rented homes have been required to meet minimum energy efficiency ratings of EPC band E, but while landlords will no doubt be pleased for the opportunity to claim grants toward replacing existing gas boilers with more energy efficient heat pumps, the news comes in the same week that 59 local authorities were granted £4.3 Mn of extra funding from the Department for Business Energy and Industrial Strategy to increase compliance.
Commenting on the grant scheme, Ben Beadle, Chief Executive of the NRLA stated:
This is not only provoking dispute between the private rental sector and the government, however, as renters are often caught between landlords unable or unwilling to make costly improvements and skyrocketing utility bills.
With the present status quo seemingly unacceptable to both sides of the landlord-tenant relationship, Dan Wilson Craw, Deputy Director of Generation Rent, had this to say of the Government’s latest strategy:
Although all sides seem to have fingers pointing at every other side of the argument, there seems to be a reasonable disaffection with current efforts to drive efficiency improvements in the private rental sector. What remains to be seen is whether representatives of both landlords and tenants can come together to demand an improved package of assistance from the government to drive the changes it is demanding.
What this means for Wirral landlords
As things stand, the opening up of grants to landlords means that there will be a potential grant that will cover between a third to a half of the cost of installing a heat pump in a residential property. However, for landlords specifically in the Birkenhead area, it may be worthwhile checking on the Wirral council’s ambitious Birkenhead Heat Network plans to see whether their property falls within the boundaries of a proposed community heating project.
While there is no doubt that the current package is insufficient, with some assessments finding it could cover up to 30,000 of the required 600,000 per year to meet targets and Shadow Business Secretary Ed Miliband calling it “meagre, unambitious and wholly inadequate”, there is a concerted effort being made by low carbon energy suppliers such as Octopus Energy to reduce the cost of heat pumps to more manageable levels.
While it may involve weighing up the potential costs and savings of playing a waiting game, there does seem to be an unfortunate benefit to seeing what may emerge as the April opening of grant applications approaches.
With EPC requirements set to get stricter over the next couple of years, something will need to change but, as things stand, central government seems to be hoping that landlords will foot the majority of the bill for hitting their targets.
If you’d like help keeping up to date with the latest changes in legislation and regulations, you can talk to one of our experts to see how we can help take the pain out of managing your property portfolio. Contact Us today!
Deadline for Making Tax Digital (MTD) Set to be Extended by a Year
The digitalisation of income tax for landlords was set to be introduced from April 2023, but following feedback from stakeholders and businesses, the deadline has been pushed back to 2024 to provide more time for testing and preparation.
What is Making Tax Digital (MTD)?
Applying to a wide range of taxpayers, including most SMEs, self-employed people and landlords, the MTD initiative aims to move away from paper tax returns and, in conjunction with various accounting software platforms, move to a more efficient digital system.
The cut off for the shift was originally set to be April of 2023, but following feedback from various businesses, the date has been pushed back to allow more time for HMRC to test the implementation with various stakeholders and for businesses to prepare.
The announced extension
Published on the UK government central website on the 23rd of September, the announcement says: ‘A later start for MTD for ITSA gives those required to join more time to prepare and for HMRC to deliver a robust service, with additional time for customer testing in the pilot.’
As such, the shift to MTD will be mandated for businesses and landlords earning income of more than £10,000 from tax year beginning in April of 2024. Lucy Frazer, Financial Secretary to the Treasury, commented:
What this means for Wirral landlords
The aim of the MTD for income tax, according to the government, is to reduce costs, reduce penalties and cut down on the number of errors made when filing Income Tax Self Assessment (ITSA) returns, but has suffered from problems with communication. These problems have led to surveys, such as from accounting software providers FreeAgent, finding that 84% of respondents (of 701 businesses polled) thought that there was insufficient information on the initiative.
While many landlords already use accounting software to simplify their returns, the extension means that there will be an additional year for those landlords who have either: not heard about the initiative; or have found it difficult to adapt to the new requirements to bring their business in-line with the new legislation.
While it has been common practice historically for landlords to use accountants to file ITSAs, new software can help to facilitate easier tax returns and save money and time for landlords. While the transition may prove more difficult for traditional letting agencies, Wirral Homes has had digital at the core of its business since its founding – and has found that there are savings to be made for landlords willing to commit to the switch.
Want to discuss how you can update the way you handle your tax filings to comply with MTD? Contact Us to see how our experts can help.
The Nine Wirral Projects Set to Share £25 Mn of Investment
With a combined £50 Mn secured from various sources, Wirral residents can look forward to a host of developments as projects begin to take shape on initiatives funded by up to half of the total investment budget.
The nine projects
Following public consultation, the following ten projects were selected as those likely to result in the largest improvement to the area:
- The Transport Shed: – a transport-themed attraction to be run by National Museums Liverpool will be located within Dock Branch Park.
- Education Engagement Project: – seven buildings are set to be improved and form what the council has termed a “hub and spoke network of service delivery bringing together education, advice, guidance, and specialist services,” to be led by Wirral Metropolitan College.
- Waterfront Animation and Creativity Project: – investment in Eureka! Science + Discovery, Woodside and Birkenhead Priory, including public realm improvements to Hamilton Square.
- Sustainability Central: – focused on refurbishing and retrofitting a building within the Wirral Waters Enterprise Zone and surrounding outdoor area, the project will create a space to host events and workshops on sustainability.
- EXPO Village: – acting as a “three-year ‘laboratory’ for testing homes of the future”, according to the council, this project aims to highlight innovative ways to construct homes before becoming open market and affordable housing after that time.
- Wellbeing and Opportunity Hub: – Charity Door will provide help and services to those in need of mental health and wellbeing support.
- Future Yard Music Skills Venue: – the second and third phases of the live music venue project which opened its first phase in autumn 2019 will be funded – including a 6,800 sq ft music-specific project space and skills development infrastructure.
- StartYard: – focusing on reusing a former industrial garage building owned by Microzine Creative this project aims to create a creative hub in Birkenhead’s Cammell Laird waterfront area.
- The Argyle Street Creative Hub: – dedicated to acquiring and redeveloping a vacant property, the project – operated by Make CIC – will turn it into a cultural and community creative space.
Councillor Tony Jones, the chair of Wirral Council’s Economy, Regeneration & Development Committee commented:
While the exact allocation of funds will depend on the outcome of pitches to the Department for Levelling Up, Housing and Communities, Wirral residents will be pleased that work is either set to begin soon or is already in progress.
What this means for Wirral landlords
Part of what makes an area an excellent investment opportunity is the local amenities – including retail, transport and the like. While Wirral has a lot to offer residents, areas such as Birkenhead have been historically underfunded. Large developments of this nature are what has been needed to help overcome issues in the area and should help to improve the wellbeing of residents.
Not only do projects like this, if completed successfully, have a lasting impact on the environment of an area, they are also great for both property prices and attractiveness to potential tenants. While the construction of new homes has been a top priority, there has been a historic imbalance between supply and demand in the area and such projects are likely to fall short of satisfying the likely increase during their construction.
For that reason, Wirral landlords can expect to see property values continue to grow at above the national average over the coming 2-3 years, allowing landlords to potentially restructure debt and expand their investment.
Want to discuss your property portfolio with a local expert? Contact Us today to see what we can do for you.
Landlords and Politicians Back Calls for Change to Law to Help Make Renting Pet Friendly
While changes to the New Model Tenancy Agreement in January making pet friendly contracts the standard, and Andrew Rosindell MP expressing his intention to campaign for the changes to become law, the push for further changes is receiving wide-spread and cross-party support.
A reissue of a report from pet charity AdvoCATS titled ‘Heads for Tails!’ makes an argument for amendments to the Tenants Fees Act 2019 that would permit landlords to require pet insurance of tenants wishing to keep animals. The report states:
A thorough and well researched document, the report takes an even-handed look at the ways in which the rental market can be made more pet friendly without placing undue strain on the relationship between tenant and landlord.
With the demand for pet friendly homes having increased by 120% in only a year, and with issues around pet ownership often the source of emotive and potentially damaging argument, the report – which has been made available to ministerial officials – provides more than just a list of issues, it provides solutions which are likely to be welcomed by tenants and landlords alike.
In the foreword, written by Andrew Rosindell MP, the minister offers the following reasoning:
Pet ownership has long been established as a positive influence on physical and mental health outcomes, so the benefits to tenants are obvious. However, as past legislative changes have left some landlords feeling overlooked, this push – joined by Green Party Leader Caroline Lucas, Sir David Amess, Lib Dem Leader Ed Davies, Dame Meg Hillier as well as organisations advocating on behalf of both pets and landlords – represents the possibility of a mutually beneficial compromise.
What the report suggests
The key demand of the report is for the government to amend the Tenants Fees Act 2019 to allow landlords to require tenants to have pet insurance which covers property damage. AdvoCATS believes that by shifting the onus for protecting the property to the tenant will help to reassure landlords and overcome many objections that are stopping them offering their properties to tenants that already own or would like to own pets.
What this means for Wirral landlords
As things stand, nothing is required of landlords unless they use an unedited version of the New Model Tenancy, but the cross-party push should hopefully offer reluctant landlords some reassurance that, should pets become a right (as some activists are hoping), that there will be a way for them to protect their properties against damage.
Want to discuss the latest legislative changes impacting the rental sector, or looking for a way to reduce the stress of managing a property portfolio? Contact Us today to see how our experts can help.
Zoopla’s July 2021 UK House Price Index Report
As available housing stock shrinks, another spike in house prices has seen a 6% increase in July this year versus 2.3% in July of 2020 (a month which was itself a part of historic growth) as houses sell almost twice as quickly as in 2016.
What the report says
Overall, the latest house price index report from Zoopla paints a reasonably rosy picture of the near future of the UK property market. While the flow if new supply is down 3%, demand is up 21% year on year which is in part responsible for the 6% growth in house prices versus the same period in 2020.
However, while the present trend can be expected to see out the year, Zoopla is predicting a slowdown prior to a return to normal levels of trading as 2022 progresses. Gráinne Gilmore, Zoopla’s Head of Research stated:
The lower of 26 days, down from 49 days in 2019 supply of homes listed for sale may lead to a natural slowing in buyer interest, albeit from high levels. A return to more normal levels of market activity will result in a slow rebuilding of stock through H1 2022.
That being said, with a housing stock in an in-demand price-range, the North West market is seeing big gains in line with that demand and the falling levels of supply.
This, the report says, is likely to moderate through Q4 with the end of the tapering stamp duty holiday and withdrawal of pandemic stimulus packages. The report predicts the level of growth across the UK to average out at around 5% for the year.
The report also examines the impact of lender decisions to tighten criteria for first-time-buyers in 2020 which, in addition to continued stamp duty relief and continuation of trends we’ve discussed here throughout the last year (such as the ‘reassessment of home’) which are likely to prolong the tail-end of the frenetic pandemic year.
In addition – though there has been a lot of focus on landlords selling properties or unhappy with legislative and tax changes (stories we’ve covered here, too) – buy-to-let demand, according to the report, is some 21% higher than at the same point in 2020. While this is likely to wane slightly with the end of the stamp duty holiday, the huge shortfall in rental property compared to demand will again cushion any fall in demand as landlords seek to satisfy this.
What this means for Wirral landlords
The main takeaways in this report cater to both ends of the spectrum:
For landlords looking to sell
Whether to reduce overall stock, or to fund reinvestment elsewhere, there is the news that the North West and particularly the Liverpool and Wirral areas are currently selling far quicker than the national average of 26 days (which is, itself, almost half the usual average for this time of the year), meaning that it is an ideal time to sell with property prices high and time to sell low.
For landlords looking to buy
High prices wouldn’t generally indicate a good time to buy as a landlord, but the report (as well as general media over the last year) does note that rental demand is far outstripping supply and, with property prices in the Wirral area still below the national average and rental yields high, there is ample reason for landlords looking to invest to do so in Wirral property and to do so now. With house prices still showing room for growth and still growing demand, there is still a good return to be made on both sides of any potential investment.
Want to discuss your property portfolio, or need help deciding which camp your particular circumstances lend themselves to best? Contact Us and one of our experts will be happy to talk through your options and what we can do to help you make the most of current trends.
Rental Demand Hits Five Year High as Northern Property Value Growth Exceeds South
Despite a less optimistic outlook in Central and Greater London which skews the overall numbers, 39% of landlords surveyed by the NRLA and research consultancy BVA/BDRC reported an increase in rental demand – an 8% improvement since their Q1 report.
While the full economic impact of the pandemic is yet to be discovered, the relaxation of lockdown rules has buoyed the economy and led to the highest rental demand, according to the research, since the first quarter of 2016.
While the data is partially skewed by negative outcomes in Central London, the NRLA report indicates that all other areas have seen real-terms increases in rental prices and in demand for rental property as the capital experienced a fall in both.
Despite this, the proportion of landlords indicating an intention to purchase a property has fallen from 19% in Q1 to 14% in Q2 while those aiming to sell has increased from 17% to 20% in the same time – likely due to landlords reacting to new and upcoming regulations that have been considered to unfairly target the private rental sector.
The NRLAs Policy Director, Chris Norris, said:
In addition to the increase in rental demand, Wirral landlords will also be pleased to note that homes in the region have continued to increase in value even as some of the driving forces behind increases throughout 2020 have reduced.
BTL properties values in the North West have increased by 15.2%, according to Sequre Property Investment, outperforming residential properties. SPIs Sales Director, Daniel Jackson, said of the results:
While some of the focus of investment has shifted to the North East, which is also able to provide excellent yields from investment in BTL properties, there is every indication that the North West, and specifically Wirral, are drawing investors north from the capital.
What this means for Wirral Landlords
There are plenty of reasons to be optimistic as a Wirral landlord – while there are doubts surrounding aspects of recent legislative changes, the rental sector seems to have been reasonably well insulated against the economic uncertainties of the pandemic so far – and contrary to fears, there has actually been a fall in the percentage of tenants with arrears during the pandemic.
With significant pressure building on central government to provide help for landlords looking to improve the energy efficiency of their properties, and Wirral an increasingly popular destination for new home workers leaving surrounding cities, the next year to eighteen months could see a continuing upward trend (though likely shallower) in the value of property as well as the demand for it. For that reason, though properties in the area are more expensive than prior to the pandemic, investment in the area still seems the wiser choice for the short term.
Need help navigating the expansion or leveraging of your portfolio, or any other aspect of managing your properties? Contact Us and speak to one of our experts to see what we can do to help.
Pressure Growing for Government to Aid Landlords in Reaching Efficiency Targets
With landlords expected to be letting properties at EPC grade C or better by 2030, the current 52.2% of properties missing the target should be cause for concern – however, while there are developments with grants for energy efficiency improvements, there is yet to be a reversal on rules classing them as improvements.
Over the last week, Business Secretary Kwasi Kwarteng, has spoken to numerous publishers and television programs stating that there was more to be done to help landlords and owners to meet targets, including that he was in the process of speaking to Chancellor Rishi Sunak about a possible replacement for the Green Homes Grant programme.
The Business Secretary believes that heat pumps – like those set to feature in Wirral regeneration efforts – could reduce in price while Chief Executive of the NRLA, Ben Beadle, has stated:
The Chancellor needs to develop a financial support package that works for landlords and tenants. This should especially be targeted at the hardest to treat properties where the cost of work will be prohibitive for landlords. In this way, he will also be doing the most to help the fuel poor.
Given that the government’s own research states the following, the concerns expressed by everyone from landlords up to and including the Business Secretary seem to be well founded:
With many already upset by a raft of legislative changes during the last decade, the appearance of shifting the cost of the government’s emissions targets onto private landlords has caused understandable outrage.
In addition to issues with the previous Green Homes Grant, which folded with little warning in March, there are also concerns that replacing existing reliance on gas central heating could be a non-starter. Despite heat pumps providing a reliable and low energy alternative, there is a huge skill shortage where installation is concerned.
However, Managing Director of heat pump maker Stiebel Eltron UK, Mark McManus, is quoted by The Guardian as stating:
“If there’s any problem in the industry, it’s probably the skills gap […] There are a small number of well-trained installers in the UK. But once this skills gap closes there is likely to be better service and greater competition, which could cause costs to fall further.”
With landlords and tenants, in line with UK opinion, in favour of action to tackle climate change, there is plenty of willingness to affect change within the private rental sector – what is needed now is action by central government to offer the right kind of incentives to make changes affordable for landlords.
What this means for Wirral Landlords
While landlords wanting to start making enquiries about possible grants can start with Wirral Council, it looks likely that, with sustained pressure, there could be another government U-turn on the options offered to landlords to assist bringing properties up to the C rating. The next few years are likely to be vital to even approaching the targets set by the Paris Climate Accord, so there are plenty of reasons to believe that rumoured grant programmes and legislative changes will arrive in the next 12 to 18 months that will at least soften the blow of bringing properties up to the standard expected for 2030.
Need help with this, or any other aspect of managing a property portfolio? Why not Contact Us and speak to one of our experts to see what we can do to help?
Rental Prices on the Rise as Return to the Office Looms
While city centres are approaching pre-pandemic levels, the North West remains 4.1% up on 2020, but still lower as compared to the national average than it was the previous year, meaning that Wirral renters are still getting a great deal on rental properties compared to their city and southern England counterparts.
What the report says
The report provides further evidence of a real north-south divide in the rental market, with UK averages skewed by rental values in the south east. However, it also demonstrates that there is a consistent trend throughout the UK for rent to equate to between 25% and 30% in England and Wales (dropping to below 25% in Scotland and hitting 35%+ in Greater London).
It is interesting to note that the North West, which has seen considerable growth throughout the last two years, has actually seen rent fall as a percentage of income.
The preface of the report raises an important consideration here, however, in that the end of furlough and growing rental arrears could result in job losses and real issues in many regions of England. With Scotland and Wales both having rent relief measures in place, it may be left to tenants and landlords in England to bear the brunt of the economic pressures resulting from the pandemic.
It remains to be seen whether the Number 10 will follow the lead of the devolved governments, but a failure to do so could lead to a crisis in some areas of England.
The report also offers a regional breakdown for the North West which offers the following insight into the average renter in the region:
- Average age: – while no doubt skewed by the region’s wealth of universities, the average age of renter in the North West, according to HomeLet data, is between 20 and 29.
- Median income: – excluding those incomes likely to skew the data (below £10k and above £500k) the median income of tenants in the region is £23,782 versus the national median of £27,666.
- Predominant rental band: – the rental stock in the region, in line with the national average, falls in a band between £500 and £750 per month.
- Average percent of tenant income spent on rent: – while rents have increased in some areas, and decreased in others, the average percentage of wages spent has dropped slightly and now comes in at 28% of income – almost 2% lower than the national average.
There is also a rundown of the properties let in the last 12 months. This showed that the most popular flats (at 23% of total) are those with 2 bedrooms, while the most popular houses are those with 3 or more.
What this means for Wirral landlords
Though it’s difficult to apply the findings of a region to a constituent part – skewed as the data would be by the larger cities and towns of the region, it is possible to state with reasonable certainty that, though the rent tends to be slightly above the regional average, the median wage has historically been higher and, therefore, the percentage of tenant income spent on rent should be around the same as the region as a whole.
In turn, this suggests that rental yields in the region, which are already above average for the UK as a whole, remain viable for the foreseeable future – with buy-to-let mortgages covered well enough to provide an income above and beyond the necessary buffer required for expenses and regular outgoings. As such, the report seems to reinforce our generally held belief that Wirral properties are likely to remain an excellent option for investment.
What this means for Wirral tenants
The main takeaway for Wirral’s renters is that the real-terms cost of renting in the region and, likely, the Wirral too, has fallen over the last 12 months versus the average wages in the area. Added to the increased ability for some workers to do so from home, this makes the area a fantastic place for tenants to live while saving to take their first step onto the property ladder.
We subscribe to all of the latest reports to ensure that we’re in possession of the latest facts and figures, and able to help our landlords and tenants make the right decisions for them. Want some help with your portfolio, or your next move? Contact Us today.
Overwhelming Majority of Tenants Want Long-Term Contracts
Build-to-rent firm Ascend Properties conducted the research which also found that tenants saw longer contracts as an opportunity to plan for the future, as a way to feel at home in rental properties and as an opportunity for security (18%, 22% and 32% of respondents respectively).
Although longer tenancies can be agreed between tenant and landlord, the government reported (in 2018) that 81% of rental contracts were assured short-hold tenancies with a minimum fixed term of between 6 and 12 months. However, with the result of a 2018 consultation failing to reach any definitive result, things have been at a legislative standstill.
The issue has not gone away, however, and it is likely that there will be further consultations introduced and legislative changes in line with a commitment to provide more secure and stable conditions to both landlords and tenants.
The Managing Director of Ascend Properties had this to say on the survey’s outcome:
What this means for Wirral landlords
As stated, there is no legal requirement for landlords to offer lengthier contracts to tenants, but what is interesting is that this study has seen a further shift from the 80% positive response to a similar question posed by the government in 2018. With proper contract support, it should therefore be possible for most landlords to improve their levels of income security by working with tenants to negotiate contract lengths that suit both parties.
The government response to the initial consultation – which was given in 2019 – suggested that a 6-month break clause added to lengthier contracts would provide an excellent opportunity for landlords and tenants to come to their own conclusions on their relationships while landlords could be assured that, despite the end to no fault evictions, they could still take possession of their property for non-payment of rent and other egregious behaviour.
As things stand, we’ve yet to see the full impact socially and economically of the pandemic – and there have been a host of changes in the rental markets across the UK. What we can hope for is that it may be possible to create a more equitable industry for both landlords and tenants, with added security for both parties.
What this means for tenants
With the Ascend and government surveys both finding that tenants want longer and more secure tenancies, what is left is for tenants to actively seek to negotiate such agreements with their landlords. At Wirral Homes, we find that the majority of landlord/tenant relationships remain positive throughout the tenancy and it makes sense for those tenants happy in a home to remain there and provide secure income for the landlord in turn.
However, with some reluctance on the part of landlords to offer longer contracts, it will require the tenant to take the lead for now – and so we’d recommend that tenants who are happy with their agreement actively seek to discus extending contract terms with the landlord so that agreements can be reached which benefit both parties, improve security and decrease stress for everyone involved.
If you’d like to discuss what can be done to help improve security for you and your tenants, Contact Us today to see how our experts can help to make managing your portfolio that little bit easier.
‘Reassessment of Home’ Set to Continue Driving Behavioural Changes
While the buyer demand has moderated slightly, Zoopla’s latest insights report finds, it is still elevated from what could be considered a ‘normal’ year, and Zoopla data suggests that this is likely driven by behavioural trends seen throughout the pandemic.
It’s been a strange couple of years – and that’s reflected in huge shifts not just in our day-to-day lives, but also in the way we view our surroundings. We’ve spoken about this multiple times over the last six months – how changes to the way we work and where we work have driven changes, but the most recent Zoopla report seems to confirm these predictions.
What the report shows
Zoopla’s latest report features an executive summary with six main takeaways:
- Buyer demand has moderated as stamp duty holiday ends but remains elevated compared to ‘normal’ market conditions
- ‘Search for space’ among homebuyers, as well as increased numbers of first-time buyers and those making lifestyle changes, will continue to support activity through H2
- Total stock of homes for sale remains constrained, down 24% in the year to mid-June compared to the average in 2020
- Annual house price growth is at 4.7%, up from 2.2% a year ago
- Price growth hits 10-year high in Wales (+7.1%), Yorkshire & the Humber (+6.2%) and the North East (+5%)
- Price growth over the last year lifts 1.8 million homes into a higher stamp duty bracket
The phasing out rather than immediate cessation of the stamp duty holidays may account for a proportion of the elevated activity, but – as the report goes on to assert – the search for space and the changing attitudes that the last 18 months have had on our wants and needs for a home are likely responsible for the rest.
However, while the demand has stabilised (albeit at an elevated level), the available housing stock has failed to keep pace. This means that price growth is being driven by both the elevated number of buyers, but also by the shortfall in available properties.
What this means for Wirral landlords
At Wirral Homes, we have noticed similar levels of disparity in supply and demand in the rental market which reflects the trends Zoopla points out. While it is often more difficult for tenants to move, the contract durations that may have kept them in a property have ceased to be an issue as the situation has progressed throughout 2020 and into 2021, and there has been a significant shift in what tenants want from a property.
Requests for outdoor space have grown while location specific requests have fallen, and this opens up opportunities for landlords with vacant properties to look beyond their standard demographics and marketing channels to ensure that their properties remain profitable. For this reason, we would suggest that landlords begin to take stock of how their properties fit with what the market is currently demanding and look to market them accordingly.
Landlords need to begin to advertise the lifestyle benefits of their properties – the schools that they provide access to, the life they can provide, not just how close they are to the office. The demand is there, it may just need a change of approach.
What this means for tenants
While we wait for the Zoopla rental market report, there are a few things we can infer from the data we have so far. Fundamentally for renters, the main concern should be that – while furlough has allowed many people to work from home the last eighteen months – the end of furlough will see increased competition for central properties as those that are no longer allowed to work from home look to return to or move closer to their places of employment.
This means that city centre and immediate surroundings will see some level of reversal of the downward trend we have seen in rental prices in these areas over the last year. Similarly, the upward pressure on prices outside of these areas should reduce, causing prices in more rural areas to stabilise – though we wouldn’t expect a reversal here for the short to mid-term.
The main takeaway for tenants, therefore, is that they should begin to think carefully about timescales – those thinking of a move to the centre may benefit from a quicker move than planned, while those moving further out can take more time if they need it.
At Wirral Homes, we always try to ensure that we’re keeping up to date with the latest trends – for both the landlords we work with and the tenants we help to find a home. Want to find out what we can do for you? Contact Us today.
Wales Joins Scotland in Extending Help to Tenants with Rental Arrears
With curbs on section 21 eviction, changes to the model tenancy agreement and more leading to many landlords questioning the impact of recent legislation on their businesses, the announcement of £10 Mn in grants to tenants with Covid-19 related arrears has been met with enthusiasm.
Back in February, the BBC reported that around 750,000 UK families had fallen behind on housing costs – an increase of 450,000 since January 2020, leading to the BBC predicting a ‘rent-arrears crisis’. While the devolved governments have implemented eviction bans to ensure tenants avoiding losing their accommodation during the pandemic, there have been – unlike in many developed nations – no relief payments made to the public during the crisis and no effort to reverse the course of the possible crisis.
That changed in June when Scotland announced £10 Mn in grant money to support tenants in rental arrears as a direct result of the pandemic. Following this example, Wales has announced their own £10 Mn in grants – something seen as a positive step by the National Residential Landlords Association, a spokesperson from which stated:
What this means for Wirral landlords
As things stand, there has been no support announced by the Chancellor of England for tenants with rental arrears, as such there is not much that Wirral tenants or landlords can do at present if they find themselves in that position. However, as the Scottish and Welsh devolved parliaments have made funds available, there should be mounting pressure on the English parliament to follow suit – and you can find your MP here to let them know that you think this relief is as necessary here as it is in England’s neighbouring countries.
While large businesses have been able to claim relief during the pandemic, the government has been less forthcoming for small business owners and sole traders – but pressure from constituents combined with the moves made by Wales and Scotland could well be enough to generate a response.
However, as some Wirral landlords do have property in neighbouring Wales, it’s worth stating that the grants will be administered by local authorities and are open to tenants that are not receiving housing-related benefits. The grants will replace the ‘Tenancy Saver Loan’ introduced in December 2020 and anyone that received a Tenancy Saver Loan will have that loan converted to a grant.
Eligible people are able to register their interest with their local authority immediately, while grants will be processed from around the middle of July.
If you’re struggling with tenant/landlord relations, are worried about legal requirements or any other part of managing a property portfolio, you can Contact Us to speak to one of our experts and to see what we can do to help.
What Happens After the Boom? The Future of Wirral House Prices
We’ve mentioned in previous pieces that the economic outlook becomes increasingly uncertain toward the end of 2021 and in to 2022 and Nationwide are similarly cautious despite some of the headlines their commentary has provoked.
What Nationwide had to say
While many of the headlines based on the announcement from Nationwide that there were ‘fears of a negative equity crisis if…’ the announcement made was reasonably unsensational and set out a number of required criteria for that to happen – including a worst-case-scenario number of lay-offs once the governmental assistance some businesses have been receiving ends.
While there may be a larger than average number of buyers left with negative equity should house-prices collapse post-pandemic and stamp-duty holiday, which would see a surfeit of property hit the market and a drop in the number of buyers, it is unlikely to cause the problems that led to a multi-year stagnation post-financial crisis.
In fact, Nationwide has been one of the few lenders providing 90% mortgages for almost the entirety of the stamp duty holiday – and have not yet, at the time of writing, withdrawn the products. As such, we’d be willing to bet that the worst-case-scenario is not the expected outcome for their underwriters.
Do Wirral buyers and landlords need to worry?
While the increase in Wirral property prices has been substantial over the last 12-18 months, the rise is neither unprecedented over the last decade, nor in excess of what the market is capable of sustaining. Even the final uplift in property prices on the peninsula has only brought the average property price in-line with the national average of £250,000.
In fact, since the recovery from the 2008 financial crisis began around 2010, there have only been 3 years where the average Wirral property price has dropped (2012, 2013 and 2018) and those losses have been quickly recouped and exceeded in the year or two that followed. Indeed, the rise between 2015 and 2016 was actually greater as a percentage of total value than the increase between 2020 and 2021.
While there are, of course, reasons to be cautious as we approach the end of various packages of assistance that have helped to keep the property market growing over the last two years, Wirral is likely to be insulated from many of the main problems – with a generally wealthier population, homeowners on the peninsula are more likely to have worked from home during the pandemic and within industries which are likely to have been less harshly impacted by and more likely to recover from the pandemic.
For that reason, and with property demand still massively outstripping availability, there are unlikely to be a glut of unsold and unsellable properties hitting the market that could cause the drops likely to initiate the ‘crisis of negative equity’ that could occur elsewhere. In truth, it’s difficult to be certain how the end of the pandemic will impact buyer behaviour, its unprecedented nature makes the gloomy headlines less certain than many would have you believe.
What lies ahead for Wirral property prices?
Wirral will remain a fantastic place to invest over the coming year. With property prices hitting the national average, there is still room for growth in what has become a hugely popular area for buyers moving out of cities, for families and retirees. The factors that have made the peninsula hugely popular throughout the pandemic will not change regardless of governmental assistance – it is well connected, vibrant and developing, with hugely ambitious projects set to come to fruition in the next 5-10 years.
Though we would predict a lower rate of property value growth over the next year, growth should still be expected – and it’s still likely to exceed the national average (as it has done throughout the pandemic). While a higher-than-average growth may not see high single- or double-digit increases, owning a Wirral property will remain an excellent investment for all types of buyers – but especially for landlords with a long-term view of their portfolio.
Worried about your investment, or looking to discuss investing in the Wirral property market? Contact Us today to talk to one of our experts and see what we can do to help you grow your business.
Zoopla Research Predicts Busiest Year Since 2008 Financial Crisis
The latest House Price Index Report from Zoopla looks at the state of the property market up to the end of April 2021 and carries a wide variety of information that should be of interest to tenants and landlords alike.
What the report says
While uncertainty has been the watchword of the last few years economically, as we’ve discussed in previous articles – the property market has had some extraordinary circumstances provoke some unpredictable changes. With changes to what buyers have been looking for, to the way we view property and expect it to offer, buyers and renters have been moving, not just to increase the number of rooms as they start their families, or decrease them as that family grows up, but because property has taken on new meaning through the course of 2021 – and that is reflected in £461 Bn in property sales.
Head of research at Zoopla, Gráinne Gilmore, said:
The report’s executive summary lays out the following key talking points:
- Sales completions forecast to reach 1.5 million this year, up from 1.04 million last year and the highest level since 2007
- The value of sales in 2021 is forecast to be £461 billion, up 68% from 2019 amid a rise in higher value homes exchanging
- Total stock of homes for sale remains constrained, down 20.8% in the year to mid-May compared to the average last year
- Annual house price growth is at 4.1%, up from 2.3% a year ago
- On a regional basis, the largest price growth is in Wales, at 6.3% and Yorkshire & the Humber at 5.4%
- Price growth in London is at 1.9%, the lowest level since March last year
While general CPI inflation remains at around 1%, house price inflation is at around 4% YoY – though this is just shy of 5% in the North West, just over 6% in Wales and in the Liverpool city region the increase is almost 7% (the highest of any UK city). This means that property value is rising at a rate much faster than general levels of inflation, making property more valuable in real terms.
What this report means for Wirral landlords
We’ve stated in previous articles that there are a number of ways landlords tend to treat real-terms (above inflation) property price increases – there are those that will look to exit the letting industry and cash in on one or more properties (this tends to be only popular among landlords owning one or two properties), there are those that will sell one or more properties and reinvest the profits into expanding, diversifying or improving their portfolio, and there are those that will look to reorganise their lending to free up capital to invest in their portfolio.
In truth, any of these options are perfectly rational for Wirral landlords – though it depends on how you see the future of the local market. At Wirral Homes, we believe that the number of projects currently in progress and the increasing investment in the area (as decentralisation of business, and remote working become an expectation rather than an option in some sectors) mean that property prices in the region are likely to remain on an upward trajectory in excess of the national average for at least the mid-term, making investment the recommended advice for our landlords.
What this report means for Wirral tenants
Affordability of rent is an issue throughout the UK and while the North West has some of the lowest rental costs as a percentage of income, there is still hope to be found for renters in the region in the projected flattening of rental prices which will come as a result of increased demand for city centre property. As we reach (hopefully) the end of lockdown measures, demand for city centre property has seen an increase – this will reduce upward pressure on rents in the more rural Wirral region, and therefore a stabilising of rent as demand and supply begin to reach more manageable levels.
Whether you’re new to the property sector or an old hand, it can be difficult to keep up to date with the constantly changing sector – but if you’d like a little help staying on top of things and reducing the stress of managing a property portfolio, you can Contact Us to see what we can do for you.
New CGI Images from Wirral Waters and Great News for Eco Friendly Landlords
With the promised launch of the first homes to take place at Wirral Waters in the summer, and with Wirral Council pushing for the peninsula to become one of the greenest places in the UK, there are a couple of stories that are likely to be of interest to those invested in the local property market.
The press was given a tour of the Peel L&P and Urban Splash East Float development about ten days ago, with fresh CGI depictions of the development’s potential look accompanying a tour around the newly laid foundations of what is looking like a fantastic mix of housing options (with the initial collaboration set to deliver 347 homes).
The development, which is likely to improve the general north bank area, turning a brownfield site into an attractive modern space will give the location and the waterfront a facelift. With developments like these – as we’ve mentioned in previous coverage of the subject – tending to have a knock-on effect on the surrounding area (especially with the job creation set to be central to the Peel L&P project and maritime resurgence predicted as a consequence), we expect to see an increase in demand in the surrounding areas.
We make sure we’re up to date on these – and all other developments with Wirral property markets, because we believe the best decisions are always the best informed ones. You can keep up to date with the latest news every week here on our blog.
Energy efficiency grants
Grants of up to £10K are available for the owners and residents of older Wirral properties can check their eligibility for the Green Grants here. With more energy efficient housing one of the main focuses of the current council’s plans, this scheme will provide grants for such improvements as insulation, solar panels and more.
The grants will depend on an in-depth survey of the property’s needs, as well as the provision of an up-to-date energy performance certificate (EPC) and the resident’s household income. Applications are set to be accepted to the 30th of September 2021 and grants must be spent by the end of the year (Friday 31st December).
Not only are energy efficient homes better for the environment, they are also cheaper to run for tenants and, with more and more tenants looking for environmentally friendly property and less expensive utility bills, they are also good for landlords.
While, for the most part, tenants will need to apply for the grants themselves – landlords can, with a tenant’s permission, apply for the grants on their behalf. If you’d like some help arranging the various visits and getting the paperwork in order, you can always speak to one of our experts to see how we can help manage the process.
What this means for Wirral landlords
The Wirral has been an incredible investment for landlords for at least a decade, but especially in the last couple of years, and the developments taking place and planned for the near future are likely to have an effect on property portfolios as Wirral becomes a more desirable and populous location.
At Wirral Homes, we believe that the peninsula is not only a fantastic place to live, but also that it’s getting better all the time. If you’d like us to be your experts on the local property market, Contact Us today to see what we can do for you.
HomeLet’s April 2021 ‘Rental Index Report’ Analysed
With North West rental prices now averaging £791, the region has seen the sixth largest increase in rental costs in the UK and places as the fifth most expensive region to rent. This places the North West firmly in the middle of the pack – but with the end of the pandemic in sight, it will be interesting to see how things progress in the coming months.
What the report shows
The report offers the following five key takeaways:
- The average rent in the UK is now at a record high of £996 – the fifth month in a row that the average price has increased.
- When London is excluded, the average rent in the UK is now £853, showing an increase of 0.7% on last month, and an increase of 6.2% on last year.
- Nine of the twelve regions monitored by HomeLet showed a MOM increase in rental values between March 2021 and April 2021, with the North East seeing the largest increase of 2.4%.
- Eleven of the twelve regions monitored by HomeLet showed a YOY increase in rental values between April 2020 and April 2021, with the South West seeing the largest increase at 8.6%.
- However, rents in London continue to fall YOY, showing a 5.3% drop between April 2020 and April 2021 – the eleventh decrease in annual variance in subsequent months.
From the perspective of a Wirral landlord or tenant, what will be the most interesting is that – as with reports on the sale and purchase of property, the rental market too sees a shift between the city centre and the suburbs and from the suburbs to satellite towns and rural areas – with the increases almost flipped on their head from pre-pandemic norms.
In addition to being around the middle of the pack when it comes to increases and rental prices, the North West also rates as the second lowest (after the North East) in terms of rental costs to income ratio – meaning that, for the most part, the North West remains an excellent place to rent and work.
A note of caution
The report does, however, the report also offers some words of warning from HomeLet’s group CEO Andy Halstead who states:
The tone of much of Halstead’s message is somewhat downbeat, but while much of it deals with issues caused by the possible removal of section 21, the above quote is the real issue raised. There are a lot of people and businesses for whom and which the furlough scheme has proven a vital lifeline and, once it is withdrawn, there are likely to be job losses and a shock to the economy.
Unless this problem is addressed at its source by government – with a slower phased withdrawal of furlough or the assurance of backing for small businesses, there will be a knock-on effect on all sectors including the property market.
What this means for Wirral landlords
In short, the present situation makes the need for good landlord insurance – which offers cover for missed payments – even more plain. While we always advise our landlords to make sure they are covered by insurance, there should be a huge push to make sure that properties are covered for the losses that could follow one or more tenants in one or more properties losing their job as a direct effect of the end of furlough.
Need help keeping up with the latest news and changes to market conditions? Contact Us to see how we can help take the stress out of managing your property portfolio.
Are Landlords Growing in Confidence Heading Into Q2 of 2021?
Research by mortgage provider Paragon and BVA BDRC indicates that a larger proportion of landlords are looking to expand their property portfolio than at the same point last year, but with Wirral property commanding significantly higher prices than versus the same period, it’s understandable that there are some landlords considering letting one or more properties go.
With two of the North West’s largest increases year-on-year (according to Rightmove), it would be surprising if some Wirral landlords weren’t looking to sell one or two properties to invest the funds in the rest of their portfolio but, with yields high, the property market represents an interesting dilemma for landlords.
What does the Paragon and BVA BDRC research say?
The raw data doesn’t seem to be available anywhere, but the press release states that ‘almost 900’ landlords were surveyed, with 19% of all respondents stating an intention to invest – of which landlords with larger property portfolios more likely to add to their portfolio (around 30% of landlords with more than 10 properties).
Richard Rowntree, Managing Director for Mortgages at Paragon, stated:
The press release also states that less than a fifth of the landlords surveyed have expressed an intention to sell.
With a good representative sample size, but no information on how the sampling was performed across the various regions of the UK, we can’t really determine for definite how accurate the survey is – but it’s certainly better than many. As such, we think it represents a pretty good indication of the general feeling in the industry.
What does this mean for Wirral landlords?
Wirral landlords – like those in many of the rural and suburban areas of the UK – have experienced the last year somewhat differently to those in urban and city centre areas. As mentioned, the value of property has increased substantially more than in many other areas of the UK, and yields are higher than average and improving, so it’s no wonder some landlords may be in a quandary.
In our opinion, investment in Wirral is a hugely attractive prospect at the moment, and we would advise landlords managing a property portfolio to take this into account when calculating their prospects. The improved value may open up options for refinancing – releasing equity from the increased value of the portfolio in order to expand it. While the same increase in value will have obviously impacted purchase as well as sales prices, for landlords, there is a lot more room for manoeuvre in picking up a ‘fixer-upper’ if the portfolio will support such a property or properties while they are renovated.
There is a lot of regeneration work being planned in and around some of the historically lesser invested in areas of Wirral – and that could allow savvy investors to reap major rewards in the mid-term for those with a good knowledge of the area.
Want to discuss the possibilities on offer, or looking for a local expert to help you to manage and grow your Wirral property portfolio? Why not Contact Us today to see what we can do to help you get the most out of your portfolio?
May 11th Could See the End of Section 21 Notices
The government’s agenda for the next session of parliament will be set out in the Queen’s speech, and it is widely rumoured that part of that agenda will include the bill which has been a hot-button topic for both landlords and charities representing renters.
What is the Renter Reform Bill?
Announced in the Queen’s Speech on 19th December 2019, the Renter Reform Bill was described as: ‘[new] measures [which] will be brought forward to protect tenants and to improve building safety.’ This was followed by a consultation titled ‘A new deal for renting: resetting the balance of rights and responsibilities between landlords and tenants’ which included a proposed end to section 21 evictions, but with a strengthening of section 8 eviction processes; and another called ‘Tenancy deposit reform: a call for evidence’ which looked ‘at whether improvements can be made to deposit protection to the benefit of tenants and landlords.’ Overall, the bill is intended to improve outcomes for tenants and landlords as well as address issues with shorthold tenancies – with a possible removal of the ability of landlords to grant them in future.
What does this mean for landlords?
For the vast majority of landlords, the bill will be of no great concern as it aims to clamp down on unfair practices and poor conditions. While the possible end of shorthold tenancies and the removal of the section 21 notice has been met with some opposition, the aim is to provide good tenants with the housing security they need to prosper. In addition, there is no mention of any end to rental increases, so landlords can still expect to implement fair rental increases over the course of a tenancy, ensuring that neither party loses out.
What does this mean for tenants?
For tenants, the end of section 21 – the ‘no fault’ eviction – should be welcome news. While it has been the norm for many tenants to move regularly, this proposal will allow families greater housing security and the reduction in stress and upheaval that can result from having to move house every few years. In addition, charities such as Shelter are pushing for further measures to end unfair practices, stating:
What this means for Wirral
Wirral has been attempting to combat problem landlords for years now, with selective landlord licensing in areas that have been a problem historically, so landlords in the region will be well aware of the expectations that local government has of landlords in terms of the living conditions that tenants should be able to expect, and while it may seem to be better news for tenants than landlords, the proposed changes should be seen as an opportunity to secure long-term tenants that will respect the property and provide a secure rental income for years rather than months.
At Wirral Homes, we always attempt to provide secure housing for tenants and long term, profitable contracts for our landlords. We believe that it’s possible for both parties to be treated fairly and with respect and that this bill will simply legislate the practices of the excellent landlords we work with, and provide the kind of housing security that Wirral tenants need to make the region a better and more successful place for everyone.
Want help negotiating changing legislation – or just looking for a letting agent to help take the stress out of managing a property portfolio? Why not Contact Us to see what we can do for you?
Birkenhead 2040 Framework Consultation Open for Contributions
Confirmed projects are set to be joined by several others in a bid to transform the town, the area is set to become a very different place to live and work. 2040 Framework, which boasts of an intention to offer residents the ‘connectivity of city living in harmony with nature’ is now welcoming contributions for an initial 8-week consultation period set to end on the 19th of May 2021, with the option to add comments on an interactive map.
Things are heating up with plenty of regeneration projects across Wirral, but there are few as ambitious as the transformation planned for Birkenhead – which council leader Janette Williamson states will be “the most transformational proposals for the town since the 1947 Town Plan”. With the Eureka! Mersey, Science and Discovery Centre set to open in 2022, the removal of the town centre flyovers set to begin, and development underway at Wirral Waters, fears that the regeneration could face further delays should be allayed for now.
The 2040 Framework itself is a hugely impressive document with ambitious plans to create a low carbon, nature filled town and a host of new infrastructure, commercial and residential areas.
The vision for the Birkenhead of 2040 is laid out in three statements:
- Birkenhead has grown into a thriving urban community on the left bank of the river Mersey.
- Chosen as home by families and entrepreneurs alike, drawn by the unique and historic waterfront environment and iconic design. A place of creativity, innovation and fun, a place to put down roots.
- Birkenhead has the connectivity of city-living but in harmony with nature. A place with room to breathe and space to grow.
With such wide-ranging changes necessary to bring this vision to life – including work on transport links and huge changes to the town to turn it into the low carbon town of the future, it will please a lot of people that have been disappointed by previous plans that a section of the document is dedicated to learning from ‘challenges [which have] hampered previous regeneration efforts.’ These include:
- A new delivery model which the document claims is ‘a game-changer for delivery – a dedicated, bespoke approach which can adopt the necessary 20-year time horizon, and assemble the skills required for truly transformational change.’
- High quality early delivery which intends to use the developments already in progress to drive further change.
- A strong partnership approach to place-making which has seen various partnerships established with Homes England and Liverpool City Region Combined Authority to prepare joint business cases and secure funding.
- Investment in low-carbon infrastructure including a district heating system that will benefit old and new residential and commercial areas and a commitment to ‘attractive walking and cycling routes throughout the town’.
With residents now free to make comments on the interactive map, there is now the option to bring the community’s ideas to the attention of the council by highlighting one of three things:
- Asset – somewhere in Birkenhead that I think is beautiful.
- Opportunity – somewhere in Birkenhead which we should make more of.
- Change – somewhere in Birkenhead that needs to change.
While engagement with the consultation has been sparse, so far, hopefully the people of Birkenhead and Wirral in general will be inspired by the ambitious plans to put forward their ideas and help return Birkenhead to the iconic status it held in the past.
The online home of the consultation can be found here – and we hope that landlords and tenants alike, both of whom will benefit hugely from such plans to restore and improve the beauty and industry of Birkenhead for all.
At Wirral Homes, we like to keep our fingers on the pulse of the local property market – and you can be sure that extend the same commitment to our landlords and tenants. Contact Us today to see whether we can help you to find a home or let one.
What Wirral Landlords Need to Know About New Tax Rules for 2021
Whether you are letting out a single room or a property portfolio, there are changes that will have some impact on how you manage your next set of tax returns. For that reason, we’ve decided to put together some information to help you prepare for the changes that took effect last week or that require prompt action.
What is a tax year?
Starting from the 6th of April each year and ending on the 5th of April the following year, a ‘tax year’ is the twelve-month period which is used to calculate an individual’s or businesses owed tax amounts. A new tax year also represents the renewal of various tax allowances.
What are the main changes for 2021/22?
The new tax year always brings changes for landlords but, after a difficult year for many, keeping up with various announcements can prove to be tough to do. However, the main things landlords will need to be aware of are as follows:
Capital gains tax allowance
2021 has continued to be a seller’s market and, as a result, some landlords have looked to capitalise on substantial increases in the value of property in some areas to raise money to invest elsewhere in their portfolio. The new tax year brings with it a new capital gains tax allowance, and while the rate of capital gains tax is subject to conversations at the governmental level at the moment, present levels for the disposal of residential property remain at 28% for higher rate and 18% for basic rate.
The new tax year will see no changes to the allowance either, with annual exemption remaining £12,300 for an individually owned property (rising to a pooled £24,600 for joint owned properties with a partner).
Making Tax Digital rules
It is the government’s stated ambition is to make the UK one of the more digitally advanced tax administrations. The ‘Making Tax Digital (MTD)’ programme is a core part of that, and makes fundamental changes to how the tax system works.
Landlords with property income above £10,000 annually will need to follow the new MTD rules for Income Tax from the start of their next accounting period after the 6th of April 2023, though
landlords can choose to get ahead of this change by using software to keep business records and send income tax updates to HMRC rather than filling in a self-assessment return.
Mortgage interest tax credit
Following the removal of mortgage interest tax relief in April of 2020, landlords will be looking to familiarise themselves with a new tax credit scheme for the first time this year. The tax credit is the equivalent of 20% of mortgage interest for the year. You can find out more about this 20% relief from Which which has compiled an extensive report on the details and impacts of the change.
Property income allowance
As with the capital gains tax allowance, the £1,000 allowance that landlords are permitted to receive before incurring tax is also renewed as of the 6th of April. Although the amount may not be life-changing, it is always worth ensuring that you are taking advantage of all of the available allowances when calculating your finances for the year – and this allowance also doubles for properties owned jointly with a partner.
Rent a Room scheme
For landlords that earn their money renting furnished accommodation on a long-term basis, the Rent a Room scheme allows untaxed earnings of up to £7,500. This allowance applies to resident landlords, and those running a bed and breakfast or guest house.
However, in this instance, if the income is shared with a partner or someone else, the allowance is halved to £3,750.
At Wirral Homes, we believe it’s our responsibility to ensure we’re up to date on any legislation that may impact our landlords or tenants – and it’s something we take very seriously. If you’d like to talk to us about how we can take the stress out of your property portfolio, or property search, Contact Us today.
Zoopla’s March 2021 Property Market Report Digested
Unsurprisingly, the extended stamp duty holiday and news of a replacement scheme has had a big impact on the demand for, and consequently the price of property throughout the UK, with the Wirral seeing the second highest growth after Wales for the year to February.
The main statistic from this month’s report is the predicted 1% growth for the year 2021. While the last year has seen huge growth powered by seismic changes to the way we live and work, the end to various support measures combined with an end to lockdown and eventual end of the stamp duty holiday look likely to combine to halt the growth – though not to reverse the trend entirely.
For the time being, however, the report features the growth to February which – for the North West – has reached 5.4% overall.
This may be at least partially, the report theorises, due to the proportion of property in the area which falls below the tapered stamp duty threshold that will be in place for much of the rest of the year.
The report puts it as follows:
“As such, we expect continued upwards pressure on pricing in the North and Midlands as demand, which we had expected to be sustained even if the stamp duty holiday ended, is now further encouraged by the continued savings on offer.“
However, the report continues to state that ‘the data signals that the ‘reassessment of home’ among existing homeowners is set to continue, resulting in a search for space – inside or out, or looking to live in a different location.’ Gráinne Gilmore, Head of Research at Zoopla summarised as follows:
“The search for space is driving continued demand for family homes, putting more upwards pressure on pricing for houses than for flats. Houses are also selling more quickly.”
While the forecast for 2021 overall is not as optimistic as could be hoped, the unprecedented growth of property value during what is essentially a slow boiling recession, and the fact that there is growth predicted at all is impressive.
Zoopla sums up the trends from February as follows:
- Demand spikes after Budget while new supply still lags
- The post-pandemic ‘search for space’ means average time to sell for houses falls to 42 days, some 20 days less than flats
- The ‘search for space’ is also putting more upwards pressure on price growth for houses, up +4.9% year on year, compared to flats, up +1.9% year on year
- Annual price growth at +4.1% in February, up from +1.8% growth a year ago
- Manchester, Liverpool, Leeds & Nottingham leading on city price growth, rising at more than 5% year on year
- Markets in North well positioned to take advantage of tapered stamp duty extension, with 70%+ of available supply priced at up to £250,000
All this means that landlords in the Wirral area find themselves in a position where growing their portfolio of properties may be expensive. However, using current equity to improve existing properties may represent an ideal opportunity to capitalise on the increased value of their properties and unlock the potential for higher rental values can come as a result.
At Wirral Homes, we feel it’s vital to stay up to date with trends both locally and nationally in order to give our landlords the best advice we can. Want to discuss how to maximise the return of your property portfolio? Contact Us today.
Four Years On – What’s Happening with New Ferry Regeneration?
With plans to use Compulsory Purchase Orders approved earlier this month set to end an ongoing impasse, and outline permissions granted in September of 2020, the area may be on the verge of seeing some much needed progress – though the completion of the project may still be some years off.
The local council, which has been granted £1.3 Mn to complete purchases of the outstanding properties, has stated that it hopes to find a developer to work with on the regeneration of the three sites as quickly as possible. The statement from Anita Leech, chair of the council’s economy, regeneration and Development Committee reads:
“Residents and businesses in New Ferry are quite rightly desperate for this transformation to take place as soon as possible.
“They have made their views known through a number of consultations and have played a significant part in helping shape and design the plans that we are looking to take forward.
“It has been a highly complex process, however, with much of the land needed in private ownership.
“The council has made steady progress, through an investment of more than £1.3 million, on acquiring pockets of land across the three sites and now is the time for us to conclude the purchase of the remaining land.
“This is essential to avoid any delays in appointing a development partner to bring these much-needed regeneration plans to fruition as quickly as possible.”
While CPOs are not the way many would have hoped for the process to move on, progress has been needed for the site which many have felt has been neglected by local and national government. With outlines already approved, there are early indications of what the area may look like eventually, but further information and designs likely won’t appear until after the council has found a development partner.
Across the three sites, initial proposals include building 79 new residential units – which includes a mix of two and three-bedroom houses, as well as one and two-bedroom apartments – as well as planning consent for more than 1,000 m2 of retail floorspace.
While the wait continues – at least in the short-term – for observable progress on these new developments, residents have also been pleased to see the return of artist Paul Curtis to the area to take the total number of his murals to 12 over the coming weeks. The artist has stated:
“It took 18 months to get phase one started because some people were against it but thankfully the reception to that has been all positive, and the people who were against it initially are now all for it.”
The murals, which have brought a wonderful splash of colour to the area, will see Curtis in his grey Cherry Picker return to New Ferry for the continuation of the project which he hopes can have an impact. Along with the developments on the area affected by the explosion, the murals – he hopes – ‘send a message that something is starting to happen now. It has lifted the mood a little bit.’
With money available for the area – in addition to the funds available for the CPOs, there has been a further £3.2 Mn awarded to New Ferry as part of a larger regeneration fund – and the final hurdles seemingly overcome in taking ownership of the three sites for the purposes of regeneration, we can hope that we’ll start to see some real progress coming soon – especially as the wider area is set to experience sweeping changes over the coming years.
This has obvious implications for residents and landlords in the area – New Ferry has faced some hard times since the event in 2017, and that has led to it becoming a less attractive place both to rent and let properties. However, both landlords and renters alike can take great encouragement that there appears to be a much-needed sea change on the way.
Looking to take your next steps in the Wirral property market, or need advice from local experts? Contact Us today to see how Wirral Homes can help.
Is the Wirral Set for a Maritime Property Boom?
While there are, of course, confounding factors – including general growth in the UK economy, according to the data available on the UK land registry site, the period of 1994 to 2011 saw property prices outperform inflation by a considerable margin.
Reasons to be cheerful?
As the nation gears up for the end of the strictest lockdowns, there are several things that could prove to be major positives for the Wirral over the coming years – and many of them involve a reinvigoration of the region’s relationship with the sea.
From the investment in marine engineering and the building of a Maritime Knowledge Hub to help compliment the nearby Marine Engineering College and help to locally train the next generation of maritime expertise, to the recent announcement around free port status (both of which we’ve covered previously), the sea may once again prove to be a source of riches for Merseyside – and from the perspective of our audience, could prove to be a boon for the local property market.
This is not only a matter of import and export, however, or even of industry – there are plans which, if well executed, could boost tourism for the riverside, and even a number of environmental projects (including the 2019 decision to stop using pesticides on Hoylake beach which has led to the area becoming a haven for wildlife and praise from renowned naturalist David Attenborough).
All of this is likely to prove beneficial for property owners in the region – but, evidence suggests, the freeport status could supercharge the increasing value of Wirral property.
What is a free port?
Allowing goods to move via the UK without tariffs, freeports aim to boost local economies by increasing their attractiveness to transport companies which need to make stops for refuelling and supply between the exporting and importing nations. This is intended to increase the through flow for these free ports and, therefore, increase employment in everything from the service to engineering sectors. While there is mixed evidence as to the effectiveness of previous freeports, one thing that did improve during the period of 1984 and 2011 (when the Merseyside region was last designated a freeport) was property value.
Wirral property price boom?
While the data available from the land registry only dates back as far as 1994 and therefore only the last 17 years of the freeport’s tenure, what can be seen is that the average property value (using sale value) increased at a rate which massively outperformed inflation – with a cumulative 0.6% increase per month average (or 7.2% per year) which exceeded inflation by 4.3%. This, even when prices are adjusted for inflation, equates to a 90% increase in property values during the period.
If we take the years between 2012 and 2020 (for which we can attain figures), the performance of the Wirral property market – which averaged a 1.1% above inflation increase (at 3.36% per year) has still grown strongly, but nowhere near as well – even with the 2020 boost brought on by the global pandemic which skews the figures slightly.
Will this growth be repeated?
While it’s impossible to predict the future, the stars seem to aligning for a Wirral maritime renaissance and, combined with a predicted, albeit Brexit hampered, post pandemic economic recovery, the various construction projects and likely decentralisation of many previously office based jobs, the Wirral looks set to experience a huge regeneration over the next decade and that can only mean good things both for the local property market and the local population, which can hopefully look forward to some good times ahead.
Looking to invest in the Wirral property market, but not sure how or where to start? Looking for some help managing your growing property portfolio? Why not Contact Us today? Wirral Homes are your experts on the Wirral.
Wirral Regeneration Takes Next Steps
Although plans in various forms have been circulating for some time, decisions on the removal of two Birkenhead flyovers and a new announcement on Wirral Waters seems to indicate that the region’s regeneration is set to see real progress over the next couple of years.
Where is regeneration set to take place?
Following the cancellation of a £30 Mn regeneration plan in 2016, a more ambitious proposal was put forward by Wirral Council. While there have been plenty of false starts, the regeneration of Birkenhead looks set to begin. With projects such as the Urban Splash and Peel L&P project set to begin delivering 350 homes to the East Float area shortly, and the approval of the removal of two flyovers in the Birkenhead Central/Hind Street area along with £8 Mn in funding announced by the Liverpool City Regions Metro Mayor, Steve Rotheram.
Rotheram also added:
When it is finished, this project should help to breathe new life into the area, create hundreds of affordable homes for local people and bring communities closer together.
What does the plan involve?
Rather than a single plan for regeneration, the proposals include several developments with a number of different partners. While the East Float project will feature a joint £60 Mn project between Urban Splash and Peel L&P, it is only a part of the wider Peel development of the waterfront, while the Birkenhead Central Gateway project has yet to announce official partners.
However, while we may not know all there is to know about the various regeneration projects, we do know that the Birkenhead Central Gateway project is set to make use of the expanded Hind Street brownfield site in order to create an area of commercial and housing development that will potentially deliver hundreds of new family homes. The Peel L&P project, however, which has been announced and re-announced for what feels like a decade or more, has been busy laying the groundwork for a hugely ambitious 300-acre waterfront redevelopment which is set to begin in earnest between now and 2025 at which point they expect five key locations to be completed.
What does this mean for investors in the Wirral’s property market?
The Wirral has received a host of exciting news in the last week – with the Liverpool City Region being granted freeport status at the latest budget announcement, the announcement that the Urban Splash and Peel project is to start taking shape this year, and the latest approval for the removal of the Birkenhead flyovers. Along with an extension to the stamp duty, this news should encourage anyone in two minds about investing in the area to take the plunge.
The regeneration plans, which are aiming to markedly improve the look and feel of the Birkenhead and Seacombe area as well as the health and happiness of residents mean that investment should see handsome returns as the changes begin to take place.
2020/21 has proven to be a perfect storm for the improvement of the Wirral property market as a whole, with the pandemic allowing former city dwellers to seek homes further from the city as home working became a permanent option for many as well as Brexit, for all its many possible downsides, appearing to prompt massive investment in the nation’s too long overlooked shipping and maritime industries.
All of this contributes to the huge potential that the Wirral and specifically, in this case, for lettings in Birkenhead and Seacombe areas have to provide fantastic returns – as the local area experiences a boom in industry, tourism and commerce over the next five years.
Interested in taking your next steps in the Wirral property market? Why not Contact Us to see how we can help?
Zoopla’s Latest UK Rental Market Report Digested
Zoopla terms the dropping city rental prices ‘The City Halo Effect’ as commuter towns make up for lost central revenue. One offered example given in the report was Birmingham which saw a 3.4% drop while surrounding Bromsgrove, Sandwell and Wolverhampton rose by an average of 5.3%.
As we’ve pointed out in our trends piece and previous coverage of recent housing market reports, there are both pandemic and more general factors underlying the changes taking place in the rental market. While rental demand has increased outside of London, the general rental stock has diminished – leading to shorter periods between lets.
While this is clearly troubling news for landlords in the nation’s capital, landlords in the rural and commuter towns of the Wirral will be pleased to note that there are falling periods between lets, a rise in demand for property and a resultant increase in rental value as renters compete for the available property.
What consensus seems to have been reached, both in this and several other reports commissioned over the last 12 months, is that tenants are looking to increase the amount of space they have at their disposal both in and out of doors and houses with additional rooms for home working and with gardens have seen a huge spike in interest – above and beyond even the general growth in these ‘halo’ areas.
Another facet of the increased rental demand mentioned in the Zoopla report is the withdrawal of many high-risk and first-time-buyer mortgages available on the market which will likely result in a boost to the rental market until some of these products return – though with the economic outlook for the UK still uncertain for at least the remainder of 2021, it is likely to be a slow process.
What this Means for Wirral Landlords
In short, the latest Zoopla report is an optimistic one for landlords with property portfolios with a large rural or commuter town element – the shift that many industries have made to more flexible work and work from home has meant that property in the Wirral is worth more and in greater demand from tenants.
However, while there is competition for properties, there is also a weight of expectation coming from the populations moving out from their city centre apartments and houses. The reasons they’re looking for properties in places like the Wirral, rather than in Liverpool, Manchester and Chester is that they want a well presented and spacious garden, they want rooms which can be easily adapted into a home office, and they want to know what their commute will be on those occasions when they need to head in to the office.
For that reason, landlords should be ensuring that their gardens are in prime condition ready for their close-up, and that the descriptions that accompany their properties on listing sites are written with the requirements of a new breed of renter in mind while still catering to the existing local market. You’ll also need to be on top of the local transport connections, as renters new to the area from nearby cities are likely to have a lot of questions!
Whether you’re new to the business of letting property, or have been involved in letting for years, the last eighteen months will have thrown up some unique problems and opportunities. Why not Contact Us today to see how our experts can help you adapt to a rapidly changing landscape.
February 2021 Market Reports Digested
In order to ensure that we’re offering the best advice and the most up-to-date information to both tenants and landlords, we stay up to date – but in the interest of transparency, we’re going to try and make sure you can be too.
Headline changes for the North West
The main figures of import for landlords and tenants are, no doubt, those of most interest to our audience, so we’ll deal with those first.
Annual change in house prices
Rightmove – 7% (3.3% UK Average)
Zoopla – 5.4% increase (4.3% UK average)
Annual change in rental prices
Rightmove – none given
Zoopla – 1.8% (-0.5% UK average)
In essence, this is reflective of a host of trends – some of which we pointed out in our 2021 trends post – including the race to beat the return of stamp duty and the increased popularity of commuter towns and villages as working from home, home schooling and other Covid-19 changes have altered people’s priorities around housing.
However, with the end to the stamp duty holiday approaching quickly and economic instability looming on the horizon, it remains to be seen what the government will do to prevent a housing crash – with some experts predicting an extension to the holiday will be announced in an effort to stave of such an event while the country deals with the economic uncertainty surrounding Brexit.
So, while it’s likely we could see a shift in the desirability of the sub-£250,000 market if the holiday is ended, we may see a slow-down and overall price fall until either an announcement is made or the holiday ends. Either way, this is unlikely to impact rental values which have been pushed up by other forces and may have a more prolonged upward trajectory until the rental market settles post-vaccine roll-out.
A northern surge?
According to Zoopla, there was a surge of more than 6% across areas of the north which they suspect is, at least in part, due to the perceived affordability of property in the north combined with the decentralisation of some types of employment.
A city slump?
However, despite the increasing value of property in the north, the cities of the north are still seeing drops in rental value as the same circumstances that are driving the house prices up make city centre living – and the connected lack of space – less desirable.
There is a full treatment of the rental market expected soon from Zoopla, so we’ll have a closer look then if we can, but the message from both the Zoopla and Rightmove data seems to be one of cautious optimism. With a debate on extending the stamp duty holiday ending in a deferral to the chancellor’s spring budget (not a definitive dismissal), there is a potential for the present housing boom to continue into the summer.
Unfortunately, as with so much this year, we won’t have answers to many of our questions until the summer (or March 3rd in the case of the stamp duty holiday). As such, the approach of Zoopla and Rightmove to defer to cautious optimism appears to be the sensible one.
Need your property valued, potential rental value estimated or want to discuss the state of the property market with one of our experts? Why not Contact Us today?
Landlords Using new ‘Model Tenancy Agreement’ Will No Longer be Able to Blanket Ban Tenant Pet Ownership
While the present rules won’t end pet-free letting, Andrew Rosindell MP is determined to see the rules become law – so landlords will need to familiarise themselves with the new rules as soon as possible, or that they are working with agents that are.
It has been almost standard practice for decades for landlords to place a blanket ban on pets – in fact, government research found that only 7% of private landlords advertise properties as pet friendly, leading housing minister Christopher Pincher to state that:
“It can’t be right that only a tiny fraction of landlords advertise pet friendly properties and in some cases people have had to give up their beloved pets in order to find somewhere to live.”
What does this mean for landlords?
While there is no rule that completely forbids landlords from keeping their properties pet free, the new guidance does mean that landlords must supply a valid reason for refusing pets within 28 days of a written request from a tenant. The guidance in the updated ‘Model Tenancy Agreement’ is as follows:
“Clause C3.5 prohibits a landlord from exercising a blanket ban on pets. A responsible pet owner will be aware of their responsibilities in making best efforts to ensure their pet does not cause a nuisance to neighbouring households or undue damage to the Property. A landlord should take steps to accommodate written requests from responsible tenants with pets. They should only turn down a request in writing within a 28 day period if there is good reason to do so, such as large pets in smaller properties or flats, or otherwise properties where having a pet could be impractical. Landlord consent is therefore the default position unless otherwise specified in writing by a landlord. If consent is given on the condition that additional deposit is paid by the tenant, the total deposit must not breach the deposit cap introduced under the Tenant Fees Act 2019 and must be protected in an authorised tenancy deposit scheme.”
As can be seen in the above section, there are provisions for landlords to ensure that their investment is taken care of through increased deposit amounts (within the standard deposit cap), as well as grounds for reasonable objection – in cases where they believe the pet would cause undue nuisance for neighbours, or is too large for the property, for example. However, the sentence to be aware of here is that ‘consent is therefore the default position unless otherwise specified in writing by a landlord’. This means that landlords wishing to maintain a property as a pet free let will need to ensure that they have a good reason and are prompt with their responses.
This does not prevent a landlord seeking to hold tenants financially accountable for damage caused by their tenant’s pets – and it may, therefore, be in the interests of landlords to stipulate that tenants with pets will face deductions to cover the cost of deep cleaning a property to ensure that it can still be let if the next tenant were to have pet allergies.
While there have been no changes to the underlying legislation – meaning that, should you draft your own legal documents, you can still ban tenants from owning pets, this does look like a first rather than final step in the process, so it may be that landlords will need to consider how they would respond to a legal change and begin to act as though the law has changed instead of having to react later on.
Are you currently using the Mode Tenancy Agreement and want help to update the document going forward, or looking for other legal advice? Our team of experts can help. Contact Us today to see what we can do for you.
Wirral.co.uk is Live – Home of Your Experts on the Wirral
Our challenge? To create a website that would serve both landlords and prospective tenants – enabling both to learn all they may need about the Wirral and to pair them with their perfect match to help make for happy, long-term tenancies. We think we may have done it!
Built from the knowledge we’ve accrued throughout our years of experience in the lettings industry, Wirral.co.uk is a hub not only for the promotion of the property we have available, but also of our industry and local knowledge, with a breakdown of property prices and possible yields, a comprehensive list of and description of our many services and in-depth location guides to help tenant and landlord alike discover the Wirral.
We have attempted to include a little of everything – while Zoopla is a fantastic outlet for us, especially with our premium package allowing for increased exposure, it primarily acts as a search engine for those people who know what they want. While there is an art in ensuring that your property captures their attention, prospective tenants that aren’t sure need that little bit more help – and that’s why we’ve put together more than 40’000 words of in-depth local knowledge on the main areas of the Wirral. We know we can sell your property to a tenant, but now we can sell the Wirral, too.
As we enter a new year, we’re expecting big things from 2021 – and we hope you’ll sign up for our newsletter to keep up to date on what it brings.
We’re really proud of how we’ve managed to distil our years of experience into the new site – but we’re not done! We want to hear from you if you think we’ve missed something that you desperately need. Whether you want to offer some feedback, or would like to harness our expert knowledge, Contact Us today!
House Prices in the UK Up by More Than £13000
The Guardian, among other news outlets, carried reports today which highlight the 2020 boom in property prices as a direct consequence of the global pandemic.
Covid-19 sparked a “race for space” among householders fleeing cities and searching out bigger homes. A tentative recovery in the market after lockdown ended morphed into a raging boom after the chancellor cut stamp duty in England and Northern Ireland until 31 March 2021. Wales and Scotland followed suit, although the cuts were not as generous. In England and Northern Ireland, buyers have been able to save £10,000 on a £400,000 property and £15,000 on one costing £500,000.Patrick Collinson – The Guardian, 20th December 2020
This shift in how we feel about our homes – which has led many to prioritise space over convenience – is also, likely, linked to the rise in work from home, with employees able to risk leaving the big city for larger properties elsewhere. This has also led to a massive increase in sales and rises above the 7.6% average in commuter towns.
Getting away from the hustle and bustle has proven so popular in fact, that ‘detached’, ‘rural’ and ‘secluded’ have risen to become the fourth, fifth and sixth most searched for terms.
Also adding to these trends has been a similar boom in buy-to-let sales. According to a separate report carried by The Guardian on the 14th of December, landlords made up 15% of all property sales in November – no doubt as a result of the soon to end stamp duty holiday.
With the stamp duty holiday set to end on the 31st March 2021, however, there may be more in the pipeline – though missing the March deadline could see landlords paying an additional thousand pounds if their sales are delayed past the cut off.
With plenty of people still listing their properties for sale despite the Christmas holiday, there are still bargains to be had and prizes to be won for savvy investors, however, provided they are able to get their deals completed quickly!
Find out how 2020 may have impacted your property portfolio – and what you need to do to maximise its potential. Contact Us today!
Wirral Letting Agents by Social Media Following
It may not be the most important part of a tenant’s discovery process when looking for a new place to call home, but traditional letting agencies are behind the times if they don’t understand that social media needs to be taken seriously.
When it comes to finding a property, tenants begin their search online – and that means letting agents need to be as visible as possible both on search engine results pages and on social media. That’s why Wirral Homes has spent its time building an audience that can help you find your property’s next tenant.
One of the things our experienced team has worked on since Wirral Homes was created is building our following on Facebook – a visual platform that we have found works well for property. The results are as follows:
|Rank||Letting Agent||Facebook Followers|
|5||Jones and Chapman||902|
|8||Martin & Co||318|
|10||Market Street Homes||204|
While we are not naïve enough to believe that a letting agents work is done when they top a table of social media followers, we use this to illustrate the change of approach to social media that Wirral Homes represents. Our lives are increasingly lived online – especially throughout the last year – and the lettings industry has remained, in large parts, restrained by a traditional approach.
While a board outside the house and an advert on sites like Zoopla are incredibly important, there is huge untapped potential in social media for letting agents – and that is potential we intend to tap. How many times have you seen something interesting online and tagged a friend? Who would be the first to know if you were moving and what you were looking for in a new property? A social media following does not end with the number given, it’s a network of the friends of each follower – each a potential recommendation for one of the properties we’re letting at the time.
By focusing on building a social media presence while we built this website, we were not seeking to replace traditional approaches, but looking to supplement them. In ensuring we achieve maximum exposure of the property portfolios we manage, we also minimise the time properties spend vacant – and that, in the end, is one of the letting agent’s most important jobs.
For more information on how we’re approaching letting, or to speak to us about the services we offer, Contact Us today!