Rents up, Voids Down and Green is Good
Build to Rent
At the beginning of the month a report from non-profit company Million Homes, Million Lives, claimed that ‘Half of Britain could be renting within 30 years’, and called for changes to encourage institutional investors to invest in long-term property portfolios. The Government also continued its push for a bigger private rented sector as it published a short-list of developments in areas including London, Manchester, Liverpool and Kirklees, which could benefit from a share of the £1 billion Build to Rent fund to deliver homes specifically for private rent.
Rents Up, Voids Down
This positivity for the rental market is also reflected in the increasing rents that landlords are achieving for their properties, with Scotland being reported as the area best performing in Britain with the biggest percentage increases in advertised rents in both a monthly and yearly comparison reaching £695 per month, a growth of £20 (2.84%) from January and £28 (3.96%) when compared to the same time last year.
Landlords are also reporting that the incidence of void periods are falling, which is good news for the wider private rented sector, and that it isn’t just the incidence of voids that are decreasing; the duration of the average void period is falling too, according to research by BDRC Continental commissioned by Paragon Mortgages.
Green is Good
With just four years to go until the Energy Act 2011 comes into force, I’m sure that many landlords were sweating on how to fund costly energy efficiency improvements to ensure their properties meet EU environmental standards which require accommodation to be rated E or higher on Energy Performance Certificates. The news that the government is extending Green Deal finance to landlords and tenants in England, Wales and Scotland has, not surprisingly, been welcomed by lettings bodies.
Additional regulations will be made in April 2016 compelling a residential landlord not to unreasonably refuse a request from a tenant for consent to the making of relevant energy efficient improvements to the property, the news that tenants themselves will now be able to take advantage of Green Deal finance is particularly welcome. After all, if a landlord fails to comply, the tenant will be able to apply to a court and seek payment of a sum of money as a result.
And finally, this month we have also seen renewed calls for regulation in the industry from Deposit Schemes, MP’s and SafeAgent. After the sudden closure of two more letting agents, leaving landlords and tenants out of pocket, Kevin Firth, of the Deposit Protection Service, said that the only solution is to regulate the industry and that letting agents, should be required to have compulsory client money protection.
So just how should the lettings industry be regulated, ‘Liberal Democrat MP Julian Huppert wants to see full regulation of letting agents, and local authorities freely able to introduce licensing of all landlords – indeed, his private member’s Bill calls for just that.’ SAFEagent says that even with the likelihood of the government introducing secondary legislation making it mandatory for letting agents to belong to an ombudsman scheme, this probably will not cover client money protection and therefore may not address issues of financial protection for tenants and landlords.
No doubt there will be further calls for regulation this year particularly if the industry grows as predicted.