They're nearly here - new S21 notices come into effect on Monday

Changes to the Section 21 Notice come into force for letting agents and landlords on Monday. 

This will require all Assured Shorthold Tenancies, regardless of their start date, to comply with guidelines as to when and how a landlord can serve a Section 21 Notice, which enables them to terminate a tenancy agreement.

When issuing a Section 21 Notice, landlords and agents will now be required to use Form 6A. 

The form combines the two previous types of notices into a single notice for both periodic and fixed-term tenancies. 

Now the Association of Residential Letting Agents has put out a final warning that agents and landlords should stop using their existing notices next Monday.

In addition, ARLA is reminding the industry that under the Deregulation Act 2015, landlords and agents wishing to issue their tenants with a Section 21 notice should:

- ensure they have shared the ‘How To Rent’ guide with tenants;

- ensure the property has an up to date Gas Safety Certificate and the tenants have seen it;

- publish the property’s Energy Performance Certificate (except when the property isn’t required to have one);

- inform tenants which scheme their deposit is protected in;

- and where the property is licensed, provide a copy of the licence to all of the tenants.

To help members and non-members, ARLA Propertymark is offering a dedicated course on ending residential tenancies, which will aim to help letting agents understand the changes to the Section 21 notices, and what it means in practice. 

“When the changes come into effect, it’s important agents are executing effective Section 21 notices when necessary. There is a legal question over whether the additional documents need to be served on pre-October 2015 tenancies, but it’s very unlikely that a judge would throw out a case on the basis that an agent has provided the tenant with too much information. A test case before the courts is probably required to determine exactly what needs to be served for these tenancies” explains David Cox, ARLA’s chief executive.

“Therefore, we think that the safest course of action for letting agents is to serve all the documentation when issuing a Section 21 notice. The Deregulation Act 2015 makes the will of Parliament clear – these documents should be served – so it’s easier to comply with the spirit of the law rather than rely on a potential legal technicality.

“These changes highlight so clearly that the current system is a mess which must be simplified and improved. We call on the government to bring forward its promised ‘Call for Evidence’ on a new Housing Court and work with us to build a system fit for today’s private rented sector.”

https://www.lettingagenttoday.co.uk/breaking-news/2018/9/theyre-nearly-here--new-s21-notices-come-into-effect-on-monday

Rents rising across most of England, down in London, the North East and Wales

Private sector rents across England and Wales increased by 2.6% in the 12 months to August 2018, hitting an average of £861 per month, the latest research shows.

However, London, the North East and Wales all recorded a fall in average rents while the South West had the fastest rising rents, according to the index from Your Move.

Across all regions, on a non-seasonally adjusted basis, the average property let for £912 in August, with the regions outperforming London with the biggest annual fall of 1.4%, taking the average rent in the capital to £1,271.

While London remains by far the most expensive place to rent in the country, there are some parts of London which offer much cheaper rents than others. When broken down into London Travelcard Zones, those in the more central areas of Zone 2 pay an average of £1,876 a month while those in the suburbs pay much less. The average rent in Zone 5 is £1,124 a month while in Zone 6 this figure is £1,251.

The data also shows that in the North East the average rent fell 0.7% year on year to £535 while in Wales the average rent fell marginally by 0.1% to £588.

The biggest rise was 4.1% in the South West to an average of £686, followed by the East Midlands with a rise of 2.7% year on year to £656. The South West was also the strongest month on month rise at 0.5%.

The index shows that yields for landlords were unchanged in each of the 10 regions covered but these figures varied on a regional basis with properties in Northern regions showing a higher percentage return than those located in Southern areas.

In the North East there was a yield of 5% in the year to August while in the North West it was 4.8%. London landlords saw the smallest percentage returns, recording 3.2% during August while the average across England and Wales was 4.4% in August, the same as in both June and July.

‘Regionally, the lettings market remains strong, with demand in the core market of two and three bed properties remaining high. However, there’s no denying that challenges still remain in London where pressure on rents has continued once again,’ said Martyn Alderton, national lettings director at Your Move.

‘It appears that there is less rental stock available this year compared to the same time last year. Whilst this could be the result of tenants staying in their rental properties longer or of landlords choosing to exit the market in light of recent legislative changes, it is also true that properties are letting more quickly than they were a year ago giving the impression of fewer properties available to rent,’ he pointed out.

‘In our experience, demand has not slowed, and when a suitable property comes to market, it is soon let. It’s this tenant demand that invariably affects rental prices, more so in some regions than others. The South West of England once again saw rent growth outstrip all other regions, buoyed by the popularity of its rural areas and the attractive city of Bristol,’ he explained.

‘Tenant finances and landlord returns have also remained steady, which suggests that landlords and tenants have reached a happy equilibrium on rents. Even for landlords in London, some areas of the capital city are still performing strongly,’ he added.

https://www.propertywire.com/news/uk/deadline-for-lettings-agent-registration-in-scotland-is-just-a-few-days-away/

Annual price growth in Scotland at 3.9% is almost double that in England and Wales

Property prices in Scotland increased by 3.9% in the 12 months to July 2018, more than double the rate of growth recorded in England and Wales, the latest index data shows.

The average price is now £181,075 and Edinburgh and Glasgow accounted for a third of Scotland’s increase on a weight adjusted basis, according to the Your Move index.

However, on a monthly basis, prices in Scotland fell for a third consecutive month in July, dropping 0.4% but the index report says that while price growth has slowed in Scotland, the market continues to be supported by low interest rates and more affordable housing than most regions in the UK.

A breakdown of the figures show that prices in Edinburgh were up 4.6% annually to a average of £266,614, while growth in Glasgow was 4.1% to £159,700.

But overall growth was led by the Shetland Islands, at 14.6%, with increases across all property types, but particularly in detached properties. On the mainland, prices in West Dunbartonshire, which has direct trains to both Glasgow and Edinburgh, have increased 12.6%, boosted by sales of high value properties over £300,000.

West Lothian, another major contributor to the market, meanwhile, has also recorded double digit annual growth, with prices up 12%.

On a monthly basis, increases are led by Stirling, with prices up 3.7% in July to £208,077. It was one of two areas to set a new peak price in the month, with Renfrewshire the other. Prices there increased 1.4% in the month and are up 8.5% annually to reach £156,619.

When it comes to prices falls, the biggest are in East Ayrshire, the second cheapest area in Scotland, which has seen prices drop 3.1% annually, while the second biggest drop is in East Renfrewshire, the second most expensive area in the country where prices fell by 1.3%.

‘The market in Scotland is holding on. While everything is notably slower, almost all areas continue to show annual growth, and drops still remain modest,’ said Christine Campbell, Your Move managing director in Scotland.

https://www.propertywire.com/news/uk/annual-price-growth-in-scotland-at-3-9-is-almost-double-that-in-england-and-wales/

More affordable homes to be built in one of London’s most expensive locations

The London borough of Kensington and Chelsea has some of the most expensive properties in the UK but a new development of affordable homes has been approved.

The Mayor of London Sadiq Khan has taken over the Notting Hill Gate scheme and doubled the amount of affordable housing being built to 35%.

Under the new plans some two thirds of new affordable homes will be available at social rent levels, others capped below the London Living Rent level.

The application to redevelop Newcombe House in Kensington and Chelsea was refused by the local council in March, before the Mayor took over the application later that month. The borough has consistently failed to meet targets for new and affordable homes. Khan pointed out that last year no affordable homes were given planning permission by the council.

Through his takeover, the Mayor has secured amendments to the plans that increase the level of affordable housing from 17 to 35%.

The development will also include a medical centre, step-free access to the nearby Notting Hill Gate underground station and a new public square with permanent pedestrian and cycle access.

‘Since taking office, I’ve been clear I will use all the levers at my disposal to increase the supply of council, social rented, and other genuinely affordable homes that Londoners need across the capital,’ said Khan.

‘Having considering all the evidence available to me, and following hard work by my planning team to increase the level of affordable housing, I have decided to grant permission for this development,’ he explained.

‘What’s more, the development will also include important new step-free access to Notting Hill Gate station, a major improvement benefitting local residents and visitors coming to enjoy this vibrant and exciting part of the capital,’ he pointed out.

‘London’s housing crisis won’t be solved overnight but I hope this will send a clear message that I expect developments to include more genuinely affordable housing and other benefits for local people,’ he added.

https://www.propertywire.com/news/uk/more-affordable-homes-to-be-built-in-one-of-londons-most-expensive-locations/

Rent-to-rent firm says London lettings market led by Tech hubs

Rent-to-rent operator Residently says area with high volumes of tech company employees are leading the lettings market’s growth in London.

The firm provides landlords with long-term guaranteed income in return for their properties being put into Residently’s portfolio of rental properties across the capital; tenants enjoy additional services including cleaning, laundry and storage, and can move around the Residently network.

Now the firm says growth in the capital is strongest across tech centres such as Shoreditch, King’s Cross, Hammersmith, White City, Soho and Battersea.

Soho has seen the strongest growth of all London’s tech hubs, with rents increasing by 26 per cent over the last year according to the firm, while Shoreditch experienced far smaller growth of just 1.7 per cent over the same period. Hammersmith - where Disney, General Electric, L’Oreal and Fox TV have bases - have seen values rise by 8.0 per cent.

“People no longer want to slog across London to reach their office, meaning the quality of housing in areas surrounding tech headquarters has continued to improve as workers relocate to be near work” says Residently’s chief operating officer Trevor Stunden. 

“Gone are the days of a job for life or a home forever. People no longer necessarily want to purchase a property in the capital, especially if they work for a start-up, or international tech firm that could take them abroad at any time.”

He says London now employs more people in the technology, media and telecoms sectors than it does in finance, adding that the rise in collaborative and creative co-working spaces has also contributed to the success of these hubs, acting as a ripple effect on the wider local environment. 

In particular, this “tech ripple” has transformed a number of downmarket locations across London into places where people really want to live, as well as work, says the firm.

“Our flexible contracts are suited to modern day renters, not locking them into lengthy commitments. A huge benefit of our network of properties is that our residents can move between our properties seamlessly within a single agreement. We plan to expand to all major tech-hubs in the coming years enabling this to happen internationally” he concludes.

https://www.lettingagenttoday.co.uk/breaking-news/2018/9/rent-to-rent-firm-says-london-lettings-market-is-led-by-tech-hubs

Report reveals what tenants need to know before renting inShare

As the number of tenants looking for a new home in Britain has increased every month since May, letting agents have released a new report revealing the kind of things they need to know.

It points out that tenants can switch their utility bills, just like those who own their own home but they should double check their tenancy agreement to see if there is a clause which means they need to inform their landlord of the change.

Landlords usually aren’t happy for tenants to start redecorating their properties but according to the report from the Association of Residential Letting Agents (ARLA) there’s no harm in asking.

It explains that tenants need to seek permission to install extra shelving, hang things off the walls, or anything which could damage the property and also need to ask to paint anything, or replace the units.

ARLA advises that tenants with a pet should be upfront about it when they’re looking for a property. Some landlords won’t allow them at all, but many will be fine with pets, although they may ask for a higher deposit to cover any potential damage. Tenants need to make sure any extra deposit is clearly stated in their contract.

It explains smoking cannabis is not permitted and the drug is illegal in the UK, and there will probably be consequences for anyone caught smoking it behind closed doors. There’s usually a specific clause in rental contracts which says tenants must not consume illegal substances in the property, and subject to the landlord’s consent, many contracts prohibit any smoking in the property at all.

Although it is legal to run a business from a residential property, a tenant must ask a landlord’s for permission. This is because the landlord might need to inform their mortgage provider, as well as getting permission from the freeholder if the property is in a block of flats.

A landlord would probably also need to update their insurance, and make sure they are not breaking any licensing conditions the local authority has placed on the property too. General wear and tear could also be an issue if the business wasn’t just desk based, and they need to make sure the business wouldn’t disturb neighbours if people are coming and going throughout the day.

‘Finding a rental property can be a stressful task, especially if you’re unfamiliar with all the clauses in your tenancy agreement, but it can also be really exciting. The most important thing to remember is that once you sign the tenancy agreement and move in, you’re still bound by it,’ said Peter Savage, ARLA president.

‘While most landlords are very willing to negotiate, these discussions do need to take place and you should never assume your landlord won’t mind without some sort of commitment in writing. Letting agents can help you both with understanding the small print in your contract and by helping you negotiate directly with the landlord,’ he added.

https://www.propertywire.com/news/uk/report-reveals-tenants-need-know-renting/

Property market is solid across most of the UK, latest index survey shows

The residential property market in the UK is experiencing diverse regional variations but overall it is solid in many parts of the country, according to the latest surveyor survey report.

Robust price growth and solid sales activity is reported across Scotland and Northern Ireland while London, parts of the South Est and East Anglia are more sluggish, the August survey by the Royal Institution of Chartered Surveyors (RTCS).

Overall, new instructions have dropped further across the UK as a whole and sales expectations suggest activity is likely to remain stronger away from the south of England.

In Northern Ireland, sales growth was again solid in August and 48% more respondents to the RICS survey saw a rise in prices which marks 60 consecutive months of an increase. In Scotland, 36% more respondents have seen a rise in prices, with the reading averaging +35% in the first seven months of the year.

Near term sales expectations suggest both of these markets will continue to see positive momentum through the remainder of the year, says the RICS report.

Alongside this, prices continue to increase firmly across the North West, the Midlands and Yorkshire and Humberside. The offsetting impact on the headline figure is provided by weakness in London and the South East, leading the headline figure to signal no change in prices over the period as far as the national market is concerned.

Looking at sales activity, in which regions again differ, the newly agreed sales net balance nationally saw 10% more respondents recording a fall rather than rise in August, which represents the most negative reading in five months.

Regionally, after a sharp fall in activity at the end of last year, current sales trends are stabilising in London, but momentum is still slipping across East Anglia and the wider South East while sales in August were solid across Northern Ireland and Scotland, but also in the South West.

‘While a combination of a lack of stock and some level of uncertainty, both relating to the interest rate outlook and Brexit, has had an impact on activity, the overall picture in these areas is still encouraging,’ said Simon Rubinsohn, RICS chief economist.

‘The story in London and the South East is, as has been widely recognised, rather more challenging but it is important that this is not seen as being indicative of the wider market,’ he added.

He pointed out, that going forward, near term sales expectations suggest this regional divergence will persist, with the market remaining relatively stronger away from the South of England, with market activity in the South West predicted to drop back.

The survey has previously reported the lack of supply in the housing market as one of the main impediments to activity, and the latest results continue to show that the average inventory of unsold stock on estate agents’ books is still close to historic lows and the report explained that this is not aided by 15% of respondents seeing a fall in new instructions over the month, pointing to a decline in the supply of fresh stock coming on to the market.

Demand wise, interest from new buyers nationally remains flat, showing a slightly more cautious approach from property purchasers. This is somewhat unsurprising in the wake of the Bank of England’s decision to increase interest rates in August alongside the broader political and economic uncertainty. Even so, buyer appetite is still reportedly strong in Northern Ireland and Yorkshire and Humberside.

In the lettings market, the latest numbers point to a further decline in fresh rental stock in August, a trend that has been emerging on the back of tax changes on buy to let properties, while tenant demand continues to rise firmly.

RICS says that rents are therefore expected to rise at a faster rate than house prices in the medium term, with average rental growth projections standing at around 3% per annum over the next five years whilst prices are projected to rise by around 2% on the same basis.

Russell Quirk, chief executive of Emoov, pointed out that sales are stabilising in London while both sales and price growth remain very strong in other regions. ‘These areas will continue to carry their weaker counterparts as we approach the end of 2018,’ he said.

‘In addition, wage inflation is now at parity with house price growth and this should spur a renewed level of buyer demand. This in turn will lift the historically low stock levels that are contributing to a muted market performance as home sellers emerge from their Brexit boltholes with a better chance of achieving a higher sold price,’ he added.

According to Adam Male, director of lettings at Urban, the index shows that the buy to let sector continues to suffer. ‘A further decline in rental stocks is a direct consequence of landlords exiting the sector, a sector that was already in desperate need of more rental stock to meet demand, not less,’ he said.

‘Rising rents may be welcomed by landlords with the resolve to jump through the latest lot of legislative hoops rather than throwing in the towel, but a 3% hike will be hard for those already struggling with current rental affordability,’ he explained.

‘While the short term forecast looks positive for the sales market, there are challenges ahead for the rental sector due to the strain of growing demand and dwindling stock,’ he added.

https://www.propertywire.com/news/uk/mortgage-rates-rising-buy-let-landlords-new-tracker-suggests/

New £1 billion fund announced for building new homes in England

The Government and Barclays have announced a £1 billion housing development fund to help deliver thousands of new homes across England.

Under the agreement loans ranging from £5 million to £100 million, which will be competitively priced, will be available for developers and house builders who are able to demonstrate the necessary experience and track record to undertake and complete their proposed project.

Funding is open to new clients as well as existing Barclays clients, and will put greater emphasis on diversifying the housing market, as at present almost two thirds of homes are built by just 10 companies.

A key priority of The Housing Delivery Fund is to support small and medium sized businesses to develop homes for rent or sale including social housing, retirement living and the private rented sector, whilst also supporting innovation in the model of delivery such as brownfield land and urban regeneration projects.

‘There is a vital need to build more good quality homes across the country. This £1 billion fund is about helping to do exactly that by showing firms in the business of house building that the right finance is available for projects that help meet this urgent need,’ said John McFarlane, Barclays’ chairman.

Housing Secretary James Brokenshire said that it will see Barclays in partnership with Homes England also help to see more design and innovation introduced to new home building.

‘It is a further important step by giving smaller builders access to the finance they need to get housing developments off the ground. This is a fantastic opportunity to not only get more homes built but also promote new and innovative approaches to construction and design that exist across the housing market,’ he added.

According to Sir E Lister, chairman of Homes England, the organisation will play a more active role in the housing market and do things differently to increase the pace, scale and quality of delivering new homes.

‘The Housing Delivery Fund demonstrates Barclays’ commitment to the residential sector and will provide a new funding stream for SME developers to help progress sites and deliver more affordable homes across England,’ he said.

Brokenshire added that it will move towards the target of 300,000 new homes being built a year by the mid-2020s and that with 217,000 homes built last year, England has seen the biggest increase in housing supply for almost a decade.

https://www.propertywire.com/news/uk/new-1-billion-fund-announced-building-new-homes-england/

Latest lender index suggest British residential property market is stable

House prices in the UK increased by 3.7% year on year in August compared and were also up month on month by 0.1%, the latest lender index shows.

The data from the Halifax also reveals that on quarterly basis prices rose by 1.9%, taking the average price of a home to £229,958.

Russell Galley, managing director of the Halifax, pointed out that the annual rate of growth increased from 3.3% in July. ‘While the pace of employment growth has recently slowed, a low unemployment rate and a gradual pickup in wage growth are helping to support household finances,’ he said.

‘This has been accompanied by interest rates still remaining at a historically low rate and a stable, yet constrained, supply of new homes onto the market further supporting house prices,’ he added.

The figures are a sign of stability in the housing market, according to Russell Quirk, chief executive officer of Emoov. ‘We’ve seen prices maintain an upward trend since May now and although only marginal in August, this is widely expected and actually quite impressive for what is usually a very slow time of year for property transactions,’ he explained.

‘These latest figures suggest that the market is yet to lose its resolve and in fact, we should see market activity pick up significantly from now until Christmas bringing prices with it,’ he added.

But Kevin Roberts, director of the Legal & General Mortgage Club, a lack of adequate housing stock continues to impact the market, limiting the options for those looking to move onto and up the housing ladder or even downsize.

‘The result is that borrowers are being forced to rely on others, such as the Bank of Mum and Dad, which funds one in every four housing transactions. If we are to create a housing market that is fair and accessible for everyone, Government and industry must work together to deliver the additional 300,000 houses that we desperately need each year,’ he pointed out.

The stability is helpful as Britain moves ever closer to the date in March next year when the country leaves the European Union, according to James Newbery, investment manager at property investment platform British Pearl.

‘A fourth consecutive month of growth shows that Britain’s housing market is still on relatively robust ground. Annual growth continues to tick over reassuringly and these figures prove that the market is far from teetering on the edge,’ he said.

‘Investors are holding steadfast and are taking advantage of a market underpinned by a lack of stock, growing household incomes and a solid labour market. And despite the Government’s tightening grip on buy to let and painfully low transaction levels, we are still to see a sudden rise in stock availability due to landlords abandoning their portfolios,’ he explained.

‘The future direction of the market remains an unknown, but this latest data from the Halifax shows there is no immediate reason to abandon ship,’ he added.

https://www.propertywire.com/news/uk/latest-lender-index-suggest-british-residential-property-market-stable/

Call for planning change to help housing associations built more homes

Planning rules should be relaxed to allow housing associations to build more affordable homes in the UK, a new report suggests.

They are currently beset by planning and funding issues and this is having a detrimental effect on their ability to build what is needed, according to a survey from Gowling WLG.

It found that 96% of surveyed housing associations will make savings in the next 12 months and 76% are undertaking commercial build to sell housing development activities to generate funding.

It also found that 92% of housing associations consider themselves ‘under pressure’ to cut costs in line with Government funding decreases and austerity targets, whilst 96% say they plan to tighten expenditure in the next year.

In addition, 68% believe planning inflexibility impedes their ability to build, while 62% think leniency surrounding their Section 106 obligations would help them develop commercially successful schemes.

‘Our findings show that the appetite and potential for housing associations to build more homes is there, but the research also suggests that, for most, significant steps need to be taken to allow them to make a really meaningful impact,’ said Jacqueline Knox, partner and social housing expert at Gowling WLG,.

‘Planning reform that helps housing associations to make the most of their potential influence in the build to sell market and by doing so to cross-subsidise their affordable housing schemes, could be a significant contributor to delivering more social housing.

‘In light of these findings, relaxing of planning obligations for not for profit housing associations at a national level could provide a feasible option to unshackling prohibitive restrictions on housing associations,’ she explained.

The firm says that changes that would have a significant impact could include improved access to planning officers, changes to speed of planning consent, relaxation or abolition of Section 106 obligations, prioritised access to public land and financial support for brownfield remediation works.

‘It may seem counter-intuitive that relaxing planning for housing associations could enable them to better fulfil their social objectives, but without a dramatic sea change in the public funding of housing associations, facilitating successful commercial profit-making functions is likely to be key to driving further investment in affordable housing,’ Knox added.

https://www.propertywire.com/news/uk/call-planning-change-help-housing-associations-built-homes/

UK house prices record biggest month-on-month fall in six years

UK house prices have had their biggest monthly fall for six years, lopping more than £2,200 off the typical price tag, according to Nationwide.

The average property value fell by 0.5% – or £73 a day – in August, the biggest month-on-month decline since July 2012, Britain’s biggest building society said. In July, house prices increased by 0.7% month on month.

The fall takes the annual rate of house price growth down to 2%, though this is still above the 1% increase that Nationwide is pencilling in for 2018 overall. The average house price is now £214,745.

The decline is likely to have been driven by falling prices in London, which is in the grip of a slowdown. Earlier this month, Office for National Statistics data showed prices in the capital were falling at their fastest annual ratesince the depths of the financial crisis.

Nationwide’s chief economist, Robert Gardner, said that despite its slower pace, annual house price growth remained within a fairly narrow range of about 2% to 3% over the past 12 months. This suggested there was little change in the balance between demand and supply in the market, he said.

“Looking further ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rates,” Gardner said.

He added that subdued economic activity and pressure on household budgets were likely to continue to exert “a modest drag” on house price growth and market activity this year, though borrowing costs were likely to remain low.

Howard Archer, the chief economic adviser at EY Item Club, said the decline showed that increases in the months to August were “a false dawn for house prices”.

“We suspect that any meaningful housing market upturn will remain elusive over the coming months,” he said. “The fundamentals for house buyers are likely to remain challenging, and they will not be helped by the Bank of England hiking interest rates.”

Some estate agents said that while London prices might be in the doldrums, the outlook in parts of the north of England was more positive.

Sam Mitchell, the chief executive of the estate agent Housesimple.com, said: “Walk into an estate agents in Liverpool or Manchester and they will tell you something entirely different from an agent in the capital. Properties are flying out the door, many at near asking price, and there’s a real appetite to buy.”

However, he said the picture was “far more challenging” in London, with large swathes of the capital still out of reach for people on middle and low incomes.

Jonathan Samuels of the property lender Octane Capital said there was “a blanket of uncertainty” over the market.

“While the employment market remains strong, stubbornly high inflation, the potential for another rate rise, overstretched household finances and the growing possibility of a no-deal Brexit are seeding serious doubt in the minds of prospective buyers,” he said.

“A Brexit no deal could hit prices in the capital, especially at the higher end, like a sledgehammer.”

https://www.theguardian.com/business/2018/aug/31/uk-house-prices-record-biggest-month-on-month-fall-in-six-years