As the rental market braces to once again feel the cold shoulder where Budget related housing initiatives are concerned, the latest research by Zero Deposit, the alternative to a tenancy deposit, has revealed the consequence of a homebuyer focussed Government, as privately rented homes as a proportion of all dwellings
Nathan Emerson, CEO Propertymark comments… Propertymark are extremely concerned to see reports within the news of a rumoured £300m attack on landlords within the budget, all at a time when many have already left the sector and many more are just about holding on. Just like traditional homeowners, inflation and
Estate and Letting Agents in the UK are being urged to check that they are signed up with an approved redress scheme that covers the full remit of their work. The warning follows a recent tribunal that penalised a business that was signed up to a redress scheme for its
As Mayor of London, Boris Johnson prepares to face stern competition for the top job, mayoral candidates went head-to-head at this week’s LandAid debate to discuss their plans for the London, in particular, its housing stock. Topics included affordable housing, the private rented sector (PRS), overseas investors and featured speakers
As property management goes, there are few businesses as broad and encompassing as Jones Lang LaSalle (JLL). Specialising in all things property, and offering a range of services to suit any and all property owners, the company has gained local, national and international esteem and continues to satisfy its clients
BDC 319 : Aug 2024
As the rental market braces to once again feel the cold shoulder where Budget related housing initiatives are concerned, the latest research by Zero Deposit, the alternative to a tenancy deposit, has revealed the consequence of a homebuyer focussed Government, as privately rented homes as a proportion of all dwellings have fallen to their lowest percentage in a decade. Zero Deposit analysed Gov data on dwellings stock levels*, looking at the level of privately rented properties available to tenants across the rental market in England and what proportion of total dwellings these homes accounted for, as well as how this level of supply has changed over the years. PRS stock has been increasing The latest figures show* that there are an estimated 4.9m privately rented homes found across England’s rental market. The good news is that this figure has been largely increasing over the years, up from 4.5m homes a decade ago (2013) and considerably higher than the £2.5m available in 2003. However, for many years, the nation’s tenants have been playing second fiddle to homeowners, with the Government launching initiative after initiative aimed at fuelling homebuyer demand, while largely ignoring private rental sector supply, causing the cost of renting to spiral to dizzying heights. Rents on the up In fact, previous research by Zero Deposit found that the average tenant across England is now paying £994 per month in rent, a cost that has climbed by 5% in the last year alone, 37% over the last decade, and is expected to increase by a further 16% by 2030. The latest figures from Zero Deposit highlight the long-term issue caused by the Government’s obsession with homeownership. Homeowner supply overtaking PRS stock supply In the last five years, the number of PRS dwellings found across England has crept up by just 2.4%. During the same period, the number of owner occupied dwellings has climbed by more than double that, up 5%. In the last year alone, PRS stock levels have increased by just 0.2% versus a 1.3% jump in owner occupied dwellings. PRS stock now accounts for lowest proportion of all dwellings in a decade As a result, privately rented properties now account for just 19.4% of all homes across England, the lowest proportion seen since 2013 when they accounted for 19.2% of the total market. What’s more, this proportion has largely been in decline since a peak of 20.3% in 2016. A regional analysis conducted by Zero Deposit shows that tenants in some regions are worse off than others. In fact, across both Yorkshire and the Humber (18.6%) and the South West (18.1%), the number of PRS homes as a proportion of all housing stock is currently at its lowest levels since 2011, while in the East of England (17.1%) and the North West (17%) its at its lowest since 2012. In fact, just two regions have seen the level of PRS stock available as a proportion of all housing climb steadily over the years – London and the North East. In the North East, privately rented homes now account for 17.8% of all dwellings, the highest percentage seen in the last 20 years. At 29.5% of total stock, London is home to the highest proportion of privately rented properties of all regions and has seen this percentage climb consistently over the years. However, unlike the North East which is home to the nation’s most affordable cost of renting, London is home to the highest average rent in England. Sam Reynolds, CEO of Zero Deposit commented: “We may have seen a consistent increase in the volume of privately rented homes reaching the market over the last two decades, but today’s market is dominated by a chronic undersupply of rental properties despite an overwhelming level of tenant demand. This market imbalance has been one of the key factors that have caused rents to spiral beyond the realms of affordability and it’s a clear indictment of multiple cabinets that this issue has continued to worsen. Over the last five years, in particular, the supply of owner occupied homes has increased at a far greater rate than privately rented properties and renters will be forgiven for thinking that the Government is more focussed on homeowners than the real issues facing tenants today. The sad reality is that we expect it will be more of the same in this week’s Budget, as we prepare for yet more ill-advised initiatives aimed at short-term benefits to win votes as we approach an election , rather than address the root causes for those struggling within the rental market who continue to be left out in the cold.” Data tables and sources Data tables and sources can be viewed online, here. Building, Design & Construction Magazine | The Choice of Industry Professionals
Nathan Emerson, CEO Propertymark comments… Propertymark are extremely concerned to see reports within the news of a rumoured £300m attack on landlords within the budget, all at a time when many have already left the sector and many more are just about holding on. Just like traditional homeowners, inflation and interest rates have hit landlords with force and there needs to be recognition from the UK Government that to provide high quality homes, whether they be short term lets or longer-term housing, the system must be workable. It is unacceptable there is constant aim being taking at landlords to the point the viability of the entire system is becoming seriously questionable for both existing landlords and future investors. Building, Design & Construction Magazine | The Choice of Industry Professionals
Estate and Letting Agents in the UK are being urged to check that they are signed up with an approved redress scheme that covers the full remit of their work. The warning follows a recent tribunal that penalised a business that was signed up to a redress scheme for its letting agency work but not for its property management work. In one of the first decisions of its kind, the Upper Tribunal* upheld a fine of £3000 against the business for its failure to belong to an approved redress scheme for property management. Its membership of the Property Ombudsman Scheme covered it for residential sales and lettings, commercial sales and lettings and some property management, but not for residential leasehold management. The decision has prompted National Trading Standards to issue guidance to Estate and Letting Agents across the country, focusing on agents ensuring their redress scheme covers all areas of their work, whether it’s sales, lettings or property management work. James Munro, Head of National Trading Standards Estate and Letting Agency Team, said: “We’re urging all estate and letting agents to double-check their redress scheme to ensure it covers the full breadth of their work. If you’re already signed up to a redress scheme, you may think your business is covered, but you should check that this covers the full breadth of your company’s activities. The recent tribunal decision shows businesses that are signed up to redress schemes for one area of their work but not for others may face hefty penalties in the courts.” Failure to be a member of a redress scheme, when legally required to do so, could result in a penalty notice being issued against the business. The two approved redress schemes are: Property Redress Scheme www.theprs.co.uk The Property Ombudsman www.tpos.co.uk Sean Hooker, Head of Redress at the Property Redress Scheme, said: “Whilst PRS membership covers most agents for all the work they do, they must tell us from the outset the areas they undertake work in so we can record this under their membership. Agents must also ensure that all their branches and offices are registered separately and the appropriate fee paid. If you are in any doubt whether you are fully compliant please contact us immediately” Katrine Sporle, Property Ombudsman, said: “TPO’s online membership and website provides detailed information about the categories of work TPO provides redress for, the options available, and clarity around the need to be registered for each category. Our membership team is on hand to give support and advice for new and existing members alike, so do please contact us if there is anything you are unsure about or need guidance on.” GUIDANCE FOR ESTATE AND LETTING AGENTS Make sure that your business is signed up with an approved redress scheme for the correct line of work (Sales, Lettings or Property Management Work). Review your existing terms of agreement/membership to ensure your redress scheme covers the full activities of the business. Check the terms of agreement/membership to confirm if your business is required to pay membership for individual branches. As of 1st April 2019, Letting and Property Management Agents in the private rented sector are required to belong to a Client Money Protection (CMP) scheme if holding client money. If you’re an Agent who is required to belong to a CMP scheme, you should be displaying a certificate of your membership at your premises and online. CMP schemes should all be providing certificates. If you’re having difficulty in obtaining a certificate, please contact CMPschemes@communities.gov.uk
As Mayor of London, Boris Johnson prepares to face stern competition for the top job, mayoral candidates went head-to-head at this week’s LandAid debate to discuss their plans for the London, in particular, its housing stock. Topics included affordable housing, the private rented sector (PRS), overseas investors and featured speakers from four of the UK’s main political parties. Somewhat predictably, Labour representative, Sadiq Khan, and Tory, Zac Goldsmith, were at loggerheads over what constitutes an “affordable home”. While Goldsmith expressed ambitions to tackle the consistent pricing-out of “average”, £34k-earning Londoners, Khan went further and was keen to stress the need for a London Living Rent and a structured calculation for house prices. Labour’s plans for Living Rent specific to London was the single policy dedicated to the rental sector. Delegates heard Khan provide details on the proposed rental rate which would be one third of average earnings in the area. The Conservatives, on the other hand, devoted attention to the housing crisis and suggested that the government needed to open more publicly-owned sites up for development. Goldsmith also added that transport infrastructure would have to be upgraded in line with any new development projects so as to join areas with the centre of the city. Caroline Pidgeon for the Liberal Democrats raised questions about foreign investment strategies, and insisted that overseas businesses ought to be taxed at a higher rate to discourage over-investment. In Green Party candidate, Sian Berry’s absence, Darren Johnson stood in to outline her plans for a not-for-profit company to shoulder all new development. The body would prioritise local and smaller developers in the hope to build affordable homes that were fit for purporse and beneficial to the local economy. All parties committed to building 50,000 new homes in the capital though they were hesistant to disclose just where they’ll find the land to do so. The LandAid debate was sponsored by Savills and attended by 350 representatives from some the UK’s largest contractors and property management companies.
As property management goes, there are few businesses as broad and encompassing as Jones Lang LaSalle (JLL). Specialising in all things property, and offering a range of services to suit any and all property owners, the company has gained local, national and international esteem and continues to satisfy its clients and, in turn, their tenants, with its winning formula of care and attention. Specialising in real estate services and investment management from the very beginning, JLL has enlarged and diversified both its ambitions and services to become much of a one-stop-shop in property and asset management. Made up of two distinct strands, its business-to-consumer arm and more recently established, business-to-business arm, the residential management team boasts a portfolio of over 3,000 properties across the UK and this figure continues to grow month on month. Within such a large portfolio of properties, lies a diverse range of clients and, thus, a resounding variation in expectation. JLL strives to understand each individual client’s needs from the outset, as Samuel Winnard, Head of London Residential Property Management at JLL, makes clear: “We’re not working to predetermined terms and conditions, we’re managing to different and individual expectations, and our philosophy involves getting to know landlords and what they require of us. We’ve acknowledged that landlords are increasing busy, and they don’t necessarily have the time to get to grips with their legal responsibilities in what is heavily-legislated sector. Our role is very much advisory and, with unrivalled understanding of the sector, we’re able to recommend approaches and strategies specific to each client.” The company extends this same emphasis on personalisation to tenants themselves; making a conscious effort to not only listen to, but incorporate the opinions of residents within its services. [premium_content level=”2″] For JLL, communication is paramount and, in a world where, as Winnard accurately describes it, “Everyone wants something done yesterday,” JLL is incredibly efficient and promotes positive relationships in order to best serve clients and tenants. JLL’s keen attention to both client and tenant is arguably most valuable when it comes to advising investors on the new wave of Private Rented Sector (PRS) schemes coming to the market. Having transitioned management of the a PRS block in East London in March 2015, the company has since increased the rental income of the scheme by approximately 20%, generating some £3m per annum. This comes as a result of JLL driving service improvements, implementing upgrades of communal spaces and the establishment of a cohesive, community feel through a variety of resident engagement exercises. As a further indication that JLL has the perfect mix of expertise for the PRS market the East London scheme has also seen void periods of less than one percent, and zero aged rent arrears Like most managing agents JLL, and their clients, rely upon third party contractors to deliver maintenance services and the company is incredibly discerning when selecting partners. “Anyone we work with is viewed as an extension of JLL,” explains Winnard. “It’s crucial that sub-contractors demonstrate they meet our expectations and can perform with the same diligence we do. We have long established relationships with a modest number of key sub-contractors who are trusted suppliers and have committed to our customer charter.” Not only adding value from an early stage, but maintaining a meticulous and attentive approach throughout the management of a property, JLL offers security on investment and a personal touch to asset management. Despite possessing global reach, the company has yet retained its bespoke, comprising service and, it’s with that, that JLL continues to have a strong foothold in the market. [/premium_content]
