UK Rental Market Update: Insights into the Current Landscape

Welcome to our Property Market blog, where we provide you with comprehensive insights into the current trends shaping the UK housing market. In this edition, we'll dive into key headlines of the current Rental Market - including supply and demand dynamics, challenges faced by investors, rental growth versus earnings, and regional snapshots. Let's explore the latest findings!

 

- Annual rental inflation for new lets in the UK remains high at an average of 11%, slightly down from 12.3% in mid-2022.

- Rental growth continues to outpace earnings growth, raising concerns about affordability for renters.

- The demand for rental properties remains significantly higher than the five-year average, while the supply of privately rented homes in Great Britain has seen a minimal 1% increase over five years.

 

Supply and Demand Imbalance:

- The stock of homes available for rent is 33% below the five-year average, highlighting the significant supply and demand imbalance.

- According to the recent ARLA Propertymark Report, the demand for rental properties recorded by member agents in April 2023 was 24% higher than the previous year, further exacerbating the supply shortage.

- Factors such as rapid growth in overseas students and high net immigration contribute to sustained demand for rental properties. This follows the Government shake-up of Visa rules in 2021 to help attract more skilled workers to the UK.

 

Challenges for Investors:

- The number of privately rented homes has only increased by 1% since 2016, as new investment is offset by properties leaving the rental sector.

- Tax changes, growing regulations, higher borrowing costs, and tighter lending criteria have prompted landlords to reassess their portfolios and investment strategies.

- Mortgage rates have increased, impacting the equity or deposit levels required for new buy-to-let purchases, along with stricter lending criteria and stress tests.

 

Rental Growth and Existing Tenancies:

- Existing tenancies have seen rental increases at an average of 4.4%, significantly lower than the market average for new tenancies.

- Landlords are encouraged to review their rents periodically, especially considering challenges such as tax changes and higher mortgage rates, as rent increases can positively impact investments.

 

Breakdown of the Private Rental Market:

- The core private rented sector, comprising long-term lets, accounts for 66% of the market, offering lower hassle and workload.

- Sub-sectors such as holiday and short lets or HMOs may provide higher yields but come with additional costs, workload, and regulations.

 

Regional Snapshot:

- In the West Midlands region, average rents have seen a year-on-year increase of just under 10%, with Birmingham ranking among the top five cities for rental growth.

- Manchester, Edinburgh, Glasgow, and Nottingham also demonstrate strong growth in rental prices.

 

Conclusion:

The UK rental market continues to experience robust demand, outpacing earnings growth and raising concerns about affordability. The supply shortage persists, presenting challenges for both tenants and landlords. Investors face changing dynamics, including higher mortgage rates and stricter lending criteria. Regular rent reviews are encouraged to ensure investments remain financially viable.

Thank you for reading our Rental Market Update blog. If you are a landlord or property investor and would like some advice or to share your views, please contact me anytime...

 

Ali Durrant MARLA

Director of Concentric Sales & Lettings 

ali@concentricproperty.co.uk

UK Sales Market Update

Welcome to our Property Market blog, where we provide you with insightful information on the latest trends in the housing market. In this edition, we'll focus on the sales market, highlighting key statistics and offering valuable insights for both buyers and sellers.

 

1. Transaction Stats:

In January 2023, there was a 10% reduction in property sales recorded year on year, while new home purchases saw a 9% rise in completions. Mortgage approvals experienced a significant 46% reduction, with gross lending down approximately 7%. The decrease in mortgage approvals from the second half of the previous year largely explains the significant difference in lending statistics.

 

2. Buyer Demand:

According to the latest ARLA Housing Insight Report, there was a 30% fall in the number of prospective buyers registered across member branches in April 2023 compared to April 2022. Additionally, member branches reported a 70% increase in properties available for sale year-on-year. These figures indicate a drop in buyer demand, likely influenced by higher mortgage rates and economic challenges affecting affordability.

 

3. Market Activity and Pricing:

Rightmove reported that agreed sales numbers are currently just 3% behind the pre-pandemic market of 2019. The average price of properties coming to the market experienced a 1.8% month-on-month increase in May, reflecting robust activity levels and confidence. Sales agreed in May showed positive growth, and the level of negotiation from the asking price to the sale agreed price remained steady at around 3%.

 

4. Mortgage Rates and Affordability:

Despite an increase in the Bank of England base rate, mortgage rates have remained steady. The average 5-year fixed rate with a 15% deposit is now 4.56%, significantly lower than the 5.89% recorded last October. This decrease in mortgage rates contributes to maintaining home mover confidence in the market outlook.

 

5. House Price Growth and Market Activity:

The Zoopla house price index reveals a year-on-year price growth of 1.9%, the lowest in recent times compared to the 9.6% recorded a year ago. Prices have fallen by an average of 1.3% in the last 6 months due to higher mortgage rates and rising living costs. However, buyer confidence has improved, resulting in an increase in sales agreed, primarily driven by falling mortgage rates during the Spring.

 

Regional Property Price Movements:

The West Midlands region has seen year-on-year price growth of 3.5%, surpassing the national average of 1.9%. Birmingham ranks second among major cities, with a growth rate of 3.8%, just behind Nottingham at 3.9%. These figures indicate a significant difference compared to last April when the year-on-year price increase approached 10%.

 

The Outlook for the Sales Market:

Market activity in the UK sales market remains comparable to pre-pandemic levels. However, predictions suggest that mortgage rates may increase in the second half of the year, impacting affordability and pricing. It is anticipated that the year-end may see approximately 20% fewer transactions than the previous year. Sensible and realistic pricing is crucial for sellers, while buyers should not be discouraged as long as the numbers align. As the year progresses, increased stock levels may provide negotiation opportunities.

 

Conclusion:

The UK sales market demonstrates resilience, with activity levels approaching pre-pandemic norms. Understanding market dynamics, considering pricing strategies, and staying updated on mortgage rate changes are vital for both buyers and sellers. Seek professional advice and remain adaptable to navigate the ever-evolving property market successfully.

Thank you for reading

The Minimum Energy Efficiency Standards You Must Comply With As A Landlord

As landlords, there are so many different laws, regulations, and standards that you need to comply with to avoid penalties. Plus, new legislation is constantly being added, further increasing the complexity of this space. Here at Concentric Sales and Lettings, we’re here to help guide you through the maze of rules and get you the information you need to stay safe, compliant, and up-to-date. 

Speaking of compliance, does your property/tenancy have an EPC rating of “E” or above? As a landlord, are you confident that your properties are compliant with the minimum energy efficiency standards (MEES)? In this article, we dive into what these energy efficiency requirements mean for you. 

What Are MEES?

Minimum Energy Efficiency Standards (MEES) first came into force in 2018. The standards focus on the energy efficiency of your property. Energy efficiency refers to the ability to use less energy to get the same amount of work done. With a higher energy efficiency rating, your property means that less energy is wasted and also can reduce energy costs for your property. 

What Does This Mean For You As A Landlord? 

The main MEES requirement for landlords is that any property that you own and rent out needs to have an energy rating of “E” or above. If your property falls below an “E” rating and you are not in receipt of an exemption, you are illegally renting out your property and could be subject to fines and penalties. The government expects landlords to spend a maximum of £3,500 to ensure that their properties are compliant. 

What If My Property Cannot Be Made Compliant? 

In the case that you are renting out a property that is not and cannot be made compliant, then we would recommend you head over to the government website and see if your property falls into one of the categories that are exempted from the energy efficiency requirements. 

You must be prepared to meet these standards. There is talk within the industry that the MEES will be higher in 2025 than it is now. It is currently being proposed that landlords’ properties will have to be a “C” rating or above. This could have a huge effect on many landlords. Fortunately, various funding opportunities are available to you as landlords and tenants right now and maybe more in the future too. We recommend seeking out that funding so that you can offset the costs that may accrue as a result of bringing your property into compliance. 

The EPC Requirement

Part of the MEES is the EPC requirement. The term “EPC” is short for energy performance certificate. It is part of the government’s rating scheme to describe the energy efficiency of buildings and properties. The ratings range from “A” (very efficient) down to “G” (inefficient). The EPC rating is how you as a landlord prove that your property complies with MEES. Providing a tenant with a valid EPC before the start of the tenancy is required under the Deregulation Act of 2015. Failure to provide them with a valid EPC would restrict your ability to serve a valid notice on them for possession of the property should the need arise. So although this piece of legislation may not seem that important, you need to ensure that you comply. 

The Penalties For Failure To Comply With This Piece Of Legislation Are Hefty, With A Maximum Fine Of £5000 Per Property

The size of this fine depends on the time that you let the property non-compliantly. EPCs are valid for ten years and, on average, cost less than £100. This means that for less than £10 per year, you could avoid that penalty and ensure that your property complies with the MEES regulations. Fortunately, it is also easy to get an EPC as there are EPC assessors in your area that can be found online and can carry out the job for you to ensure that your property is compliant and safe. It’s important to remember that funding is available at the moment for both landlords and tenants, so please be sure that you are researching any local funding within your area to improve the energy efficiency of your property. This will also help you to prepare yourself for the even higher requirements that may be coming in 2025. 

Always Remain Compliant

We hope you’ve found this post informative and enlightening. If you want to learn more, check out our YouTube channel, where we help keep you up-to-date on the latest and most important legislation for the private rented sector. There are over 170 pieces of legislation that you as a landlord need to comply with. That’s why we offer a free, quarterly webinar hosted by our very own Dawn Bennett, where you can get more details on all these different kinds of legislation. We’d love to see you there! 

Landlords- Selective Licensing Is Returning to Liverpool April 2022 - Are You Prepared?

Are you a landlord in Liverpool? 

If so, are you aware that in April 2022, selective licensing is returning to the borough? 

Today, we’re going to talk about what this change in legislation means, and the steps you can take to ensure that you remain compliant. Here at Concentric, our goal is to help landlords succeed by providing practical guidance surrounding each legislation update as well as helpful advice regarding overall best practices for landlords.  

What is Selective Licensing?

Selective licensing simply means that the city council has decided that they are going to selectively license a specific area. Thus, selective licensing in Liverpool means that the Liverpool City Council has agreed to selectively license a group of postal codes within the borough. In order to determine if this impacts you, you’ll need to see if you own any properties that fall within the range of postal codes that are covered by this new legislation. If you are a landlord in this area and you have a property from a one-bedroom flat all the way to an HMO, you may need a special license in order to continue letting that property.

What Does This Mean to You as a Landlord?

Now, we’re going to talk about what you need to do when selective licensing comes into place in Liverpool. Practically, this means that any property you rent that falls within the impacted area will need a special license as of April 2022 in order to be compliantly let. So, you’ll have to head to the Liverpool City Council and file applications, when the process is opened, for these licenses. There will be a cost element to this. You’re going to need to pay a fee to the Liverpool City Council in order to make the application for the license. Selective licensing is going to continue within Liverpool for the next 5 years until 2027.

Official guidance around the new law is still evolving, so we don’t yet know what the cost of licensing will actually be when selective licensing is rolled out. However, through experience with past licensing programs, we do know that there are many ways to secure discounts and reduce the licensing fee. This can be done by maintaining a good EPC rating, using accredited agents, and through other strategies. We recommend keeping an eye out for further updates on the Liverpool Government website. This is also the place to be when the application process opens for selective licensing. If you need help, contact us and we can help you with licensing applications.

How Do You Stay Compliant?

As of the time of this writing, the details of what will be specifically required to be compliant with this new legislation are not known, but we do know the general standards that have to be met in order to be compliant. There are a number of ways you can take care of your properties and ensure that you are always remaining compliant with the law. We’ve listed a few of them here:

  1. Have a valid gas certificate

  2. Have a valid electricity certificate
  3. Ensure that your EPC ratings are at ‘E’ or above
  4. Have your smoke alarms and carbon monoxide detectors tested
  5. Ensure that your property is fit for habitation

By following these main steps, you can be confident that your property is already a long way towards full compliance. Previously, when the Liverpool City Council enacted selective licensing, they added some additional requirements. This was in 2015. They required things like changes to the tenancy agreements to incorporate anti-social behavior clauses as well as adequate refuse management at properties. Thus, additional requirements may also be a part of the new selective licensing law.

It’s important to remember that the purpose of selective licensing is to regenerate areas and make the private rented sector the best that it can be. If landlords take good care of their properties and ensure that their tenants use the property responsibly, you’re ahead of the curve.

Licensing in the Private Renting Sector is Serious

Most landlords are probably already aware of the importance of remaining in compliance with all of the relevant laws. The penalties for not doing so can be immense. Failure to comply with selective, additional, or mandatory licensing as a private landlord can result in penalties up to £30,000. If your property falls under the category of selective licensing after April 1st of 2022, and you are not in possession of the correct license, your rights to gain possession of your property could be negatively impacted.

We hope we’ve answered some of your questions about this important new legislation. If you’re a landlord in the Liverpool area and would like some additional information, please contact us and we will be happy to help you in any way we can, also we are running a live webinar on this topic, which you can register for HERE.

What's The Wolverhampton Rental Property Market Doing Right Now In 2022?

The landlords in Wolverhampton really started to embrace Lettings in 1990 after the change to the Housing Act in 1988, which introduced the Assured Shorthold Tenancy that we all operate under today, so what’s changed this year?

At that time, the Private Rented Sector was sitting at just 7% (7% of all properties being privately rented), but since then the market has grown fast.

Currently, 21% of the total housing stock is privately rented, which has come around due to an astounding level of growth, but in the last 2 years, this seems to have taken growth to an entirely new level.

We have seen masses of investors wanting to buy in the area, rents rocketing in price, and properties prices increasing to an unprecedented rate.

So, what does all this mean for Landlords in the PRS now?

As you can imagine we get asked a lot of questions daily, so we decided to answer the most common questions and put them here for you.

We also decided to look at our stats over the last 2 years (2020 and 2021) and interview Ali Durrant, our Branch Manager on the ground in our Wolverhampton branch on what he has seen over the last 24 months and in particular the beginning of this year (2022).

Here are our findings on the Lettings Market in Wolverhampton in 2022...

 

Where are the biggest demand areas in Wolverhampton from tenants right now?

We are seeing the biggest demand we have ever seen in history for rental property, in January, we were getting upwards of 50 pre-applications per property, it was crazy! So much so we had to build an automation system to deal with the hundreds and hundreds of tenant calls coming inbound to the office every day, it was chaos!

With that in mind, it seems any property right now rents fast, but if we had to select the best areas (the most commonly asked for areas) it seems North and East Wolverhampton is winning (2022), being the WV10 and WV11 postcodes (Oxley and Wednesfield).

It’s also worth mentioning the close follow-up areas being asked for are Penn, Bilston, and Willenhall too.

 

What type of property is there a shortage of right now?

In these strange times, there is a shortage of all types of property at the moment, which means it really is a landlord’s market, but there does appear to be more flats and smaller properties on the market than the larger 3 and 4-bed homes.

This is probably due to our experience of lockdowns. Many tenants are looking for that little extra space now than they would have probably accepted before because we all craved more space in the lockdowns of 2020 and 2021.

 

Which area is attracting investors right now?

It seems a real mixed bag right now, probably due to the level of activity being higher than we are used to seeing. HMO investors are trying to find pockets where article 4 isn’t in operation and are picking up already active HMOs near the hospital (WV11).

We also have people looking for the cheaper areas to buy to try to maximise cash flow, as well as quite a few more professional type investors that are looking to opt for more quality professional areas, which would normally attract higher capital appreciation.

 

How much have the average rents gone up in the last 2 years?

Properties in the UK (outside of London) have on average gone up by 12.6% year on year, and we are certainly able to confirm this increase and in some cases more. We have had a lot of landlords reviewing their rents, albeit some may have not been reviewed for a couple of years, with some increasing by as much as £200 per month (25% increase). In some cases, 

our system shows rents have increased for us locally by nearly 15% over the last 12 months on average.

 

How much have property prices gone up in your market?

The average property price in the West Midlands region is £262k. The average price of a property, however, has increased by £23.4k (10%) over the last twelve months. The average price of an established property is £261k. A point to note; the average price of a newly built property here is £301k.

 

Is there a market for furnished or all unfurnished now?

We tend to find that with smaller properties, yes furnished still works as long as the furnishings are of good quality, however, for the larger properties (2 bedrooms or above), normally unfurnished is preferred.

 

What’s the most asked for feature in properties now by tenants?

Generally, the most common thing people seem to want now other than more space is en-suites in HMOs, they seem to have become an essential item, and as a result, are actually becoming very difficult to let without these, and for single lets, parking and/or driveways go a long way too.

 

What would you buy now if you were buying Ali? 

I would buy a 3 bedroom home in an average to the above-average area, such as WV6, WV4, or WV8. We see high rent return in these areas, longer tenancies with families, which means fewer voids and less maintenance. With that in mind, I would also consider a modern 2-bed flat within a couple of miles of the hospital subject to lease, etc to get into the contracted NHS worker market.

 

Are the landlords that are buying 1-time landlords or multiple investors?

We seem to be getting a lot of portfolio buyers at the moment, adding to their existing portfolio and seeking opportunities from the older 20-year landlords that are selling now due to their mortgages expiring and retiring.

 

What gives the best return in your area?

We find modern 2-bed flats can be picked up for a good purchase price at the moment as the bulk of demand is in freehold, you need to be aware of shortening or expiring lease terms or have a plan/allowance for that, but it does mean better purchase prices can be negotiated

Also, there are a lot of 3-bed semis that generate £800 - £900pcm which can still be picked up for around £175,000 in mid-range areas, giving around a 6% gross yield, easy solid rental units, longer-term tenants, and decent capital appreciation too, so good all-rounders which should stand the test of time.

If you have any queries, want to discuss anything in this article, or want to discuss buying property, just email me at wolverhampton@concentricproperty.co.uk  

Alternatively, you can schedule a complimentary call with me here.

Electrical Certificates – why every landlord should have them

The risks

Imagine if you picked up the phone in the middle of the night to be told that there was a fire at your rented property. As horrific as that news would be, one of the first things that the fire department, the police, and the insurance company would check is whether or not the electrics and electrical appliances within the premises were safe, or whether they could have been the cause of the fire.

And if that were the case, who do you think liability would automatically be with?

If you fail to produce a valid electrical certificate, it could very well be you, the landlord. That would mean that not only do you risk prosecution, but it’s highly unlikely that your insurance would payout.

But, if you have a valid, up to date certificate from a qualified electrician, then you have proof that you have done everything you can to ensure that the electrics in that property are safe. In that case, liability would no longer lie with you as the landlord, but with the electrician, as the question would be whether he had completed the work properly, or with the tenant, who has a responsibility to take care of the property while he or she lives there.

Is it law to have an electrical certificate for my property?

It will be, as right now Government are in processing a law which will mean that all rented properties will have to have electrical checks every 5 years. However, until that time, most agencies are recommending that their landlords get ahead of the game and make sure that all new tenancies start with a valid and up to date electrical certificate, before the tenant moves in.

That’s because, under the Consumer Protection Act Section 37 and Section 19, you have a responsibility to guarantee that your property is safe and fit for tenants to live in. And having an electrical certificate is part of that responsibility.

What will the new law mean for landlords?

Landlords will be required to have electrics checked in their properties every 5 years. This is mandatory, and must be carried out by a qualified electrician. This will be phased in over 24 months; in the first year, all new private tenancies will be affected, and in the second year, all existing private tenancies will also have to adhere.

If a property has recently had an electrical installation condition report (EICR) and has a valid certificate, then the property will not be required to have an inspection until 5 years has lapsed since the date of issue.

What will the required checks include?

The new legislation will require 5 mandatory recommended electrical safety features, which are:

What’s the difference between an EICR and a PAT test?

When we talk about getting an electrical certificate for your property, we’re really talking about the EICR – this is a test carried out by a qualified electrician, and tests the infrastructure of the properties electrics. As detailed above, this includes the wiring, units, plug sockets and switches etc.

A PAT test is really there for the appliances within that property. That would be anything that you include as portable appliances in the property, which might be things like a fridge or freezer, electric oven, dishwasher etc. It’s not mandatory for you to have a PAT test, but some landlords like to get one if they do include these appliances, as again, it provides an extra layer of cover if anything should happen.

In conclusion

While it’s not law to provide an electrical certificate at the time of writing, it’s highly recommended that you obtain one. It’s a small price to pay for peace of mind that your property is safe, and that you won’t be held accountable if something should go wrong.

The Government will be changing the law on this soon, so get ahead and make sure that you’re properties are protected, if not on existing properties, but on all of your new tenancies going forward.

If you are looking to keep all your properties safe by staying compliant with current legislation, click HERE to download our FREE compliance checklist.

How To Get Better Tenants

Who is your perfect tenant?

Let’s think about how we define our perfect tenant. It might differ from landlord to landlord and will depend on what’s important to you. You’ll also consider the type of property you own and the area you’re in – for example, is it a HMO? Are you located in a city centre full of professionals? Or is it an area popular with families?

The type of person you are able to target will determine how you categorise them, such as:

Nice to meet you

The best way to get a feel for a prospective tenant is to actually meet them. As humans, we have an in-built ability to make hundreds of judgments based on seeing and talking to another human being, so what better way to get an idea of whether a person is right for your property?

This creates the opportunity to ask them questions about their situation, such as their reasons for moving, past rental situations, their jobs, and even their hobbies. It’s a great way to get a feel for who they are in a more natural and less formal way.

Don’t make promises at this stage, though. It’s perfectly ok for you to tell them that you’re not ready to make a decision yet and that you’ll be in touch, especially if you’re not getting a good vibe from them. You don’t have to take the first tenant you meet – in fact, you probably shouldn’t.

Check them out

Make sure that you do all the proper checks. Having a credit check, verifying their income, and immigration checks, will all determine whether they are the right tenant for you, and whether they can afford to pay their rent. However, be careful not to discriminate – letting things like race or colour, religion, or even benefit claims cloud your judgement is a big mistake, and as well as being unfair, is illegal.

Something else you might consider; using Google. Many people use social media, whether that’s Facebook, Twitter, or Instagram, and it’s surprising what you can find out about a person just by searching their name. It’s a useful tool if you want to make sure that the person applying to rent your property is right for you, as you can often get a good feel for their background, friends and opinions, which could all give you an indication of how they will be as a tenant.

Go with your gut

Above all, trust your instincts. If you want better tenants, it really is worth making the effort to meet them, talk to them, and don’t be afraid to do a bit of basic research into their background. Ask questions, and take the time to get a real feel for who they are. And be brave enough to admit if you don’t like them – there’s absolutely nothing wrong with admitting they are not a good fit for you, and looking for someone who is. So many landlords are in such a rush to get someone into their property that they just sign up the first person who takes an interest – and then have regrets when they create problems in not maintaining the property, or worse still causing damage or complaints.

Hopefully, this post has given you a little bit more confidence to go out there and seek out your perfect tenant. Making that little bit of extra effort can save you so much heartache in the long term.

Section 11 Repairing Obligations – what you need to know

Statutory Implied Terms

Firstly, what are the obligations of the landlord under the Landlord and Tenant Act? The official line states that:

“The landlord [is] to maintain the structure and exterior of the property, including installations for the supply of water, gas and, electricity, heating systems, drainage, and sanitary appliances.”

In simple terms, this means that if anything you as the landlord have provided as part of the tenancy, it is your obligation to keep it in good working order throughout the duration of the tenancy.

If we look a little deeper, the statement implies that the installations are ‘maintained’, which tells us that they must indeed be in proper working order before the start of the tenancy. It’s important that anything that isn’t in good repair is dealt with before the tenant moves in, otherwise, the landlord can be deemed in breach of Section 11, and therefore can be prosecuted.

So, what is included, and what do we mean by installations?

Maintenance of the structure and exterior is quite self-explanatory; by this, we would include the brickwork and external structure, roof, drains and gutters, and windows and doors, etc. It is expected that the property is structurally sound, will not be subject to leaks or damp caused by damage to brickwork or roof damage, and is secure, with adequately fitted doors and windows etc.

With regards to installations, you should include in this anything that is included in the property as part of the agreement. That includes any appliances which are already in the property when the tenant moves in. It also includes all and any water or gas pipes, electrical wiring, water tanks, boilers, radiators, and other space heating installations such as vents for under-floor heating, baths and sinks, and sanitary ware.

 

Supplied appliances

If you have provided appliances to the tenant as part of the tenancy, i.e. they are not gifted or provided as a goodwill gesture, then these must also be kept in good repair as part of the agreement. These might include:

As a landlord, it is not under your responsibility to repair items that belong to and were brought into the property by the tenant. Make sure that any items you have provided are included in your tenancy agreement, and are listed on your inventory. It is also important that you can prove the condition of provided appliances in your inventory, so that your tenants cannot claim for damages for which they are responsible.

 

Advertising the property and the Consumer Protection Act

Something you’ll want to consider when you’re advertising the property is what you’re including in the tenancy. If, in your photographs, you have shown the property with white good, and you are not intending to include them, you must state that in your advert, and make it clear whether you are willing to gift those items, or whether they will be removed before the tenant moves in.

 

Tenancy Issues

Something we’ve seen come up and have frequently been asked about is whether the landlord’s responsibility under Section 11 changes if the tenant is behind on their rent, or is under dispute for some other reason.

The answer is absolutely not. Regardless of any issues with the tenant, you as the landlord are still under obligation to make good any repairs to the structure and installations included within your property.

You must also get the permission of the tenant to gain entry to the property to make any necessary repairs. While we know that when a tenancy is under dispute, this can sometimes be difficult, but remember that if you don’t have permission to enter from the tenant, then you can be liable for trespass.

In all circumstances, the tenants right to privacy in their home should be respected.

If the health of your property is a concern, you can download our FREE compliance check download here.

Electrical Certificates – Why Every Landlord Should Have Them

As a landlord, you might be aware that there will be a change in the law with regards to electrical checks in all rented properties. That’s not compulsory as yet; however, we would urge all landlords to be ahead of the game and make sure that regular electrical checks are carried out on properties, and especially on new tenancies. Here’s why.

The risks

Imagine if you picked up the phone in the middle of the night to be told that there was a fire at your rented property. As horrific as that news would be, one of the first things that the fire department, the police, and the insurance company would check is whether or not the electrics and electrical appliances within the premises were safe, or whether they could have been the cause of the fire.

And if that were the case, who do you think liability would automatically be with?

If you fail to produce a valid electrical certificate, it could very well be you, the landlord. That would mean that not only do you risk prosecution, but it’s highly unlikely that your insurance would pay out.

But, if you have a valid, up to date certificate from a qualified electrician, then you have proof that you have done everything you can to ensure that the electrics in that property are safe. In that case, liability would no longer lie with you as the landlord, but with the electrician, as the question would be whether he had completed the work properly, or with the tenant, who has a responsibility to take care of the property while he or she lives there.

Is it law to have an electrical certificate for my property?

It will be, as right now Government are in processing a law which will mean that all rented properties will have to have electrical checks every 5 years. However, until that time, most agencies are recommending that their landlords get ahead of the game and make sure that all new tenancies start with a valid and up to date electrical certificate, before the tenant moves in.

That’s because, under the Consumer Protection Act Section 37 and Section 19, you have a responsibility to guarantee that your property is safe and fit for tenants to live in. And having an electrical certificate is part of that responsibility.

What will the new law mean for landlords?

Landlords will be required to have electrics checked in their properties every 5 years. This is mandatory, and must be carried out by a qualified electrician. This will be phased in over 24 months; in the first year, all new private tenancies will be affected, and in the second year, all existing private tenancies will also have to adhere.

If a property has recently had an electrical installation condition report (EICR) and has a valid certificate, then the property will not be required to have an inspection until 5 years has lapsed since the date of issue.

What will the required checks include?

The new legislation will require 5 mandatory recommended electrical safety features, which are:

What’s the difference between an EICR and a PAT test?

When we talk about getting an electrical certificate for your property, we’re really talking about the EICR – this is a test carried out by a qualified electrician, and tests the infrastructure of the properties electrics. As detailed above, this includes the wiring, units, plug sockets and switches etc.

A PAT test is really there for the appliances within that property. That would be anything that you include as portable appliances in the property, which might be things like a fridge or freezer, electric oven, dishwasher etc. It’s not mandatory for you to have a PAT test, but some landlords like to get one if they do include these appliances, as again, it provides an extra layer of cover if anything should happen.

In conclusion

While it’s not law to provide an electrical certificate at the time of writing, it’s highly recommended that you obtain one. It’s a small price to pay for peace of mind that your property is safe, and that you won’t be held accountable if something should go wrong.

The Government will be changing the law on this soon, so get ahead and make sure that you’re properties are protected, if not on existing properties, but on all of your new tenancies going forward.

Rent arrears - what landlords need to know

Being a good landlord means having to deal with problems as they arise, whether it’s appliances that have stopped working, issues with neighbours or the tricky situation of handling rent arrears. You may have vetted your tenants thoroughly and to the correct procedure, but it’s not always a guarantee that they’ll pay on time. Sometimes, a tenant will hit hard times – they may lose their job, go through a major life change, or simply have a tough month with expenses - and you need a strategy to deal with rent arrears when they happen.

Whether you’re an independent or working through a letting agency, you should have a ‘process’ – a fair, regular system for dealing with arrears that you stick to for every tenant. A predetermined system proves that you treat all your tenants equally, which should help you especially if you ever face allegations of harassment. It also helps you gather evidence in a chronological order for court cases should it get to that stage.

On that topic, first things first - do not harass! Any threatening language or behaviour towards the tenant or their family and friends, even passive-aggressive acts such as cutting off supplies, will hurt your relationship with them and come back to haunt you if you have to take them to court. You have a duty to maintain your property and be professional – keep focus on the tenant’s side of the agreement, not yours.

Here’s what every strong rent arrears management system should have:

  1. An entry for guarantors. You should always secure a guarantor if you feel an application is weak. If a guarantor is secured, include them in all rent arrears communications as though they are a tenant. They are owed the same information so give it to them.
  2. A tenancy agreement that puts responsibility with the tenant on rent payments. You should definitely look into getting a tenancy agreement that asks for rent advances, especially if a guarantor is not an option. Most tenancy agreements will put responsibility of rent advances on the tenant, not you – make sure this is the case.
  3. A commencement date of the rent deadline. The account technically enters arrears on the day the payment is due if it is not received.
  4. Communications that are made one week, two weeks and three weeks after the account is in arrears, giving a polite call and letter that increases in severity each time. The letter acts as evidence of you attempting to collect rent, while the call enables you to get an immediate response. Keep records of the response you receive. Don't solely rely on emails – they are too informal and can be forwarded and distributed online beyond your control.

Once a tenant has passed through this system, you enter week four of arrears and you are now owed 2 months’ rent. At this stage, you have a right to repossess and you must prepare your paperwork. To bring the case to court, you must send a Section 8 notice citing grounds 8, 10, 11 to the tenant, along with a notice that you will commence court action in 14 days, with two days allowed for service.

Whether you have go to court with a tenant or not, chasing rent arrears can be a difficult process, both personally and professionally. This system is simple, legally compliant, neutral and effective for keeping record of arrears that can be easily referred to. At Concentric, we specialise in helping landlords in difficult circumstances, so if you would like some guidance please contact your local branch who can talk you through your concerns and the services we offer.