Consultation launched on residential building safety in the UK

The British Government has launched a consultation on proposals to toughen rules on residential building safety, particularly strengthening fire testing for cladding

The consultation will look at restricting or banning the use of ‘desktop studies’ as a way of assessing the fire performance of external cladding systems and comes in the aftermath of the Grenfell Tower fire in London in which 71 people died.

Housing Secretary Sajid Javid said that the revisions come directly as a result of the recommendations made by Dame Judith Hackitt in her interim report from the review into building regulations and fire safety published last year.

He explained that the Government is also going further by asking whether ‘desktop studies’ should be used at all for construction products, wall systems (cladding) or for any other purpose.

If ‘desktop studies’ are deemed appropriate, the proposed changes include improving the transparency of assessments, enabling proper scrutiny of results and ensuring that the studies can only be carried out by properly accredited bodies that have the relevant expertise.

These proposals are subject to a full consultation that will end on 25 May 2018.

‘We have listened carefully to Dame Judith Hackitt and we are taking action to strengthen building regulations guidance, which could mean that the use of desktop studies are either significantly restricted or banned altogether,’ said Javid.

‘This demonstrates the tough measures we are prepared to take to make sure that cladding tests are as robust as possible and people are safe in their homes,’ he added.

https://www.propertywire.com/news/uk/consultation-launched-residential-building-safety-uk/

Build-to-rent: how developers are profiting from Generation Rent

More than £2bn was invested in purpose-built rental flats last year – but this is no way to solve the UK housing crisis

A flat in a large build-to-rent development in Wembley Park, London. Photograph: Sarah Lee for the Guardian

The number of UK residents renting privately has doubled over the

past decade, with some 20% of households (30% in London)

now in private rented accommodation. Into this growing gap

between social housing and home ownership the build-to-rent

model has given property developers a new way to profit from

Generation Rent.

In 2017, the burgeoning build-to-rent market, comprising purpose-built

blocks of rental homes, attracted £2.4bn in investment and is forecast

to grow by a further 180% over the next six years.

The attraction for large pension and insurance funds, such as Legal &

General, is clear. They have the capital to develop large blocks of flats,

which are let out and managed long term by a single company rather

 than being sold to individual landlords. This provides institutional

investors with a fairly stable, long-term income stream.

Build-to-rent company Fizzy Living, for example, boasts of providing a 

five-star service and promises to complement the “hectic lifestyles of

work-hard, play-hard professionals”.Tenants are typically offered longer

tenancies than for standard rental accommodation, with contracts of up

to three years or more, and other amenities, such as gyms, communal lounges

and cinema rooms.And for tenants, there’s a promise of a more streamlined

experience, with bespoke, high-quality management rather than an unreliable,

individual private landlord.

Because build-to-rent has the potential to increase the supply of homes

and improve conditions for renters, many in the property world, such as

investment firm Venn Partners and consultancy Lichfields, have touted it

as a way to solve the UK housing crisis. It has also received considerable

government support, including a £1bn build-to-rent fund.

But the benefits of build-to-rent come at a premium. One study found

that London’s new private rental “communities” were, on average, 11%

more expensive than rental properties nearby. In the Get Living development

at Elephant and Castle in south London, renting a one-bedroom flat costs 

£1,841 a month. As the company requires a household income of 30 times

 the rent, you’d need to earn almost £60,000 a year to qualify as a tenant. 

As the government latches on to the promise of build-to-rent in accelerating

housing supply, it seems likely that these schemes will be subject to

 less stringent requirements to provide affordable housing.

So, despite suggestions that build-to-rent will empower Generation Rent,

these high-spec products only really seem to be an answer for affluent young

professionals.

Meanwhile, a Shelter report in January found that half of families in

UK social housing are being ignored or refused help when they report

poor or unsafe conditions. Driven by the market for the market,

build-to-rent is just another so-called solution that continues to

allocate housing on the basis of wealth rather than social need.

https://www.theguardian.com/housing-network/2018/apr/11/
build-to-rent-developers-profiting-generation-rent

• Up to 10,000 agents could quit because of regulation - claim

Franchises giant Belvoir says there are over 10,000 potential acquisition targets which could be wanting a way out of the lettings and sales sectors because of increased regulation. 

In a statement accompanying its 2017 trading figures, Belvoir says these 10,000 comprise small to medium-sized independent lettings and sales agents - the latter being deterred by increasing regulation over the sales sector, and the former worried about the lettings fees ban being introduced next year.

So far Belvoir’s in-house acquisitions team has 73 of its franchisees registered with its assisted acquisitions programme plus 17 “opportunities under consideration.”

The firm says that in 2017 it saw a record number of portfolio acquisitions at a franchisee level under the programme.

“The board's target of doubling the number of transactions under this programme was significantly exceeded with 23 independent agencies being acquired [compared to nine in 2016]” the company says. In addition, Belvoir says it’s key to the firm’s financial well-being that its lettings agency franchisees can handle sales as well. In its report to the City yesterday - we carried the story here - it revealed that its main estate agency network, Newton Fallowell, achieved a 10 per cent growth in revenue from property sales whilst the lettings-biased networks, Belvoir and Northwood-branded offices, saw property sales increase by 47 per cent and seven per cent respectively.  

“The ability of our traditional lettings agents to be able to process property sales is critical to retaining the ongoing portfolio of managed properties, with most landlords looking first to sell through their lettings agent.  Where the new owner is a landlord buyer, there is a strong probability of retaining the vast majority of their properties under management” the report says.

https://www.lettingagenttoday.co.uk/breaking-news/2018/4/up-to-10-000-agencies-could-quit-because-of-regulation--claim

Research reveals older home owners are leading home moving growth in UK

Older home owners are an active group in the property market in the UK with a 46% rise in housing exchanges in the first quarter of 2018 compared to the same period in 2017, new research shows.

Transactions in this group are being fuelled by a combination of pension drawdown and equity retrieval as the baby boom generation accesses the wealth accumulated in their properties and pensions, according to the national home mover report from customer insights company TwentyCi.

Nearly one in every five exchanges were represented by a flat, up 10% year on year while detached homes have seen the greatest levels of decline with a fall of 12%. The report suggests that more families appear to be improving rather than moving.

The data also shows that over half of all exchanges in the first three months of 2018 were terraced and semi-detached houses, up nearly 17% year on year.

‘Nationally, property exchanges are up nearly 8% compared to the first quarter of 2017, suggesting a continued building of confidence, stability and momentum in the market,’ said the firm’s chief customer officer Colin Bradshaw.

‘Following the usual quarter four slowdown, the first quarter has seen 100,000 more properties come on to the market. However, year on year we’ve only seen a 1% increase in listings, implying conversion rates have increased,’ he added.

He pointed out that overall the report demonstrates a nationwide stability in the property market with the average house price remaining unchanged at £297,000 along with a 14% growth in households entering the house moving journey compared to the previous quarter.

London saw a 3% growth in exchanges quarter on quarter while property exchanges are up nearly 8% and the data shows that in the last year, Northampton, Edinburgh and Glasgow were the three fastest places to sell a property.

An increase in demand in the East Midlands and East of England is driving a growth in the average asking price of properties year on year of 4% and 5% respectively. While property prices at the upper end at £2 million plus are experiencing a decline in volumes year on year. All other price brands in between are seeing growth levels as high as 12%.

Estate agents are also now selling properties faster than a year ago. In the first quarter of 2018 it took an average of 76.8 days to sell a property, seven days faster than in the first quarter of 2017.

‘It is good to see stability coming into the market with prices remaining flat and some increase in activity. It should be noted that whilst we are getting a better shape on the future of Brexit there are many twists and turns ahead before we fully understand the post Brexit landscape,’ Bradshaw explained.

“It is also clear the demand for flats and apartments in cities and large towns is on the rise. We are also seeing a big movement in buyers aged 66 and over moving to semi-detached properties. This infers either an increase in downsizing to release equity which we would expect to trickle into the economy, or alternatively older couples splitting up,’ he added.

The research also shows that outside of London, all of the big cities have seen a large rise in the percentage of rental properties over the past year, and with Glasgow, Manchester and Leicester seeing the highest growth in rental prices, up by 6% over the past 12 months.

Edinburgh is the only big city that did not see a large increase in the percentage of rental properties in the last year. The average property price in the big cities remains relatively static with some small growth, although Sheffield saw a slight decline in asking prices in the last quarter and last year.

In London year on year, all areas have seen a growth in the proportion of rental listings, with the exception of West Central London. The hottest area was North London which saw a 12% increase in rentals available since last year.

https://www.propertywire.com/news/uk/research-reveals-older-home-owners-leading-home-moving-growth-uk/

Estate agents will have to be professionally qualified in future and reveal referral fees

Estate agents will in future have to hold a professional qualification and also be transparent about the referral fees they receive.

The National Trading Standards Estate Agency Team (NTSEAT) will be tasked with proactively monitoring the disclosure of referral fees, and the Government will also look more closely at the case for banning referral fees.

The measures were announced yesterday morning – just after midnight on Sunday, a timing cynics say is designed to put a housing minister on the Andrew Marr show.

Despite much rhetoric yesterday, the Government has, however, stopped short of trying to use the law to prevent fall-throughs.

There is to be no introduction of mandatory binding offers, and no legal clampdown on gazumping or gazundering, but agents will be encouraged to use voluntary “reservation agreements”.

There will now be “behavioural insight research” carried out into reservation agreements, with the aim of trialling them by the end of this year.

Home Information Packs will not be reintroduced – but the Government says: “Our long-term vision is of a system where all sellers provide search information up front”, and it also says it wants to explore the possibility of a ‘property log book’.

An industry group, to be formed by the housing minister, will look into all the proposals.

There is to be yet another consultation, this time specifically on the new mandatory qualification for estate agents, with housing secretary of state Sajid Javid seemingly convinced that someone’s ability to pass an exam will protect the public from rogues.

Under the raft of changes announced yesterday, managing agents and freeholders will also have to provide up-to-date leasehold information for a set fee and to an agreed timetable.

Industry regulator NTSEAT will be “strengthened” so that it can carry out more enforcement activity, including banning estate agents.

Local authorities will also be affected, with a new timeline of just ten days in which to turn round searches.

The announcement affecting sales and leasehold agents comes exactly one week after the one issued just after midnight on Easter Sunday, affecting letting agents.

While there is very little detail in the latest announcement, the Government said that according to its own research, over six out of ten buyers and sellers have experienced stress when moving house, and about a quarter of sellers would use a different estate agent in future.

It said that unnecessary financial and emotion stress contributed to over a quarter of sales falling through each year.

Javid said: “Buying a home is one of the biggest and most important purchases someone will make in their life.

“But for far too long buyers and sellers have been trapped in a stressful system full of delays and uncertainty.

“So we’re going to put the consumers back in the driving seat. We will require estate agents to hold a qualification so that people are no longer at risk from a minority of ‘rogue agents’ and can trust the process when buying or selling their home.”

The government statement also quoted NAEA boss Mark Hayward who said: “We particularly welcome the commitment to further regulation.

“We have long argued that estate agents should be recognised as professionals, this is an important step towards achieving this, and we look forward to working with the Government.

“Currently, anyone can practise as an estate agent. The changes set out will professionalise the sector, creating a more trustworthy and reliable industry which will be better held to account.”

Yesterday’s statement gave no details as to what the likely timeframe will be.

The announcement followed last autumn’s call for evidence into the home buying and selling process, and was accompanied by a summary of responses to that as well as the Government’s own response.

Over 1,200 responses were received, mostly (932) described as being from the public.

http://www.propertyindustryeye.com/estate-agents-will-have-to-be-professionally-qualified-in-future-and-reveal-referral-fees/

Generation rent: 

How the renters' deposit system could be made fairer for tenants and landlords

Having to raise weeks of rent in advance cripples young Londoners. Could insurance be the answer?

There aren’t many times I agree with the shouty Generation Rent tenants’ campaign group but I have some sympathy with its latest suggestion, that renters should be able to transfer some of their deposit from one property to another 

Landlords and letting agents have two options for protecting a deposit for the duration of a tenancy: they must either hand over the money to a custodial scheme, which refunds the deposit once the tenant has vacated the property, or they must buy insurance from a government-backed scheme to protect deposits they hold on to themselves. It’s free to use one of the custodial schemes but 60 per cent of letting agents and landlords prefer to keep their tenants’ deposits in their own accounts using the insurance-backed schemes, which charge £15-£26 per deposit.

Generation Rent says the most popular insurance-backed schemes should be scrapped, forcing us all to protect deposits using the custodial schemes, which it would like to see become “Personal Tenant Accounts”. I have some sympathy for this idea because I realise how difficult it must be for tenants, especially young renters and the low-waged, to raise enough cash for one deposit, let alone two.Tenants would be allowed to transfer “some” of their deposit to their new home once they’d paid their last month’s rent on their current property.

Also, I’ve heard plenty of stories of landlords and letting agents dragging their feet when it comes to returning deposits, with some not refunding the full amount until several weeks after the tenant has vacated.

However, I do have some concerns. Generation Rent hasn’t specified what percentage of the deposit would be transferred and, crucially, how much would be held back to cover any damage, excessive wear and tear, extra cleaning costs and things like rubbish disposal at a tenancy’s end. I have found that even the nicest, most diligent of tenants often fail to clean adequately when they leave, and nine times out of 10 they leave a pile of junk that I have to cart to the dump. Also, there’s very often a fair bit of minor damage, such as broken drawers, mould in bathrooms or stains on carpets.

I think a much better idea is the launch of affordable insurance premiums to replace tenants’ deposits altogether.I often don’t charge for this, but I think landlords will be understandably alarmed if there is any suggestion that not enough of the deposit will be left to cover such costs. There are a number of “zero deposit” insurance products on the market already, but the premiums are way too high for them to be realistic for most tenants. For instance, Dlighted’s premiums start at £129 per rental agreement, which is a lot for tenants on a tight budget, although it is one of the more affordable and most comprehensive policies for those renting more expensive properties. Insurer Munich Re has just launched a similar Zero Deposit Scheme, for which it charges one week’s rent to cover six week’s rental income. Again, I think this is too punchy for most tenants.

Property tech start-up flatfair offers a deposit-replacement tenants’ membership scheme, for which it also charges the equivalent of a week’s rent per tenancy agreement to provide 12 weeks’ cover. If only these deposit replacement schemes were cheaper, I think they could provide a real solution to the problem.

https://www.homesandproperty.co.uk/property-news/renting/how-the-renters-deposit-system-could-be-made-fairer-for-tenants-and-landlords-a119271.html

Chalet chic: new bungalows in popular London commuter locations for young families

Once associated with the elderly, single storey houses come with a freehold and without the high service charges of an apartment.

The bungalow is back.

Though associated with the elderly, who want to live on the flat, today's new bungalows are proving a hit with young people, reports developer Crest Nicholson.

Increasingly, younger family buyers want a space-efficient single storey house that is good for toddlers, comes without the high service charges of an apartment, and with the freedom of a freehold.

Such "chalet chic" is on sale at various commuter belt locations, including Elsenham Vale, in Essex, Headcorn in Kent, and Cedar's Park, Stowmarket, where two-bedroom bungalows cost from £245,000.
https://www.homesandproperty.co.uk/property-news/buying/new-bungalows-in-popular-london-commuter-locations-for-young-families-a119131.html