April was another busy month in the world of letting agents and in particular news concerning the Private Rented Sector (PRS). In partnership with Letting Agent Today, we have put together a summary of the biggest stories from the lettings world in the last month, from rent controls to heat regulations.
As polling day approached, housing policies from the respective parties were high up the news agenda and of course of particular interest to the nation’s letting agents and landlords.
When it comes to property and housing, the rental sector has arguably received the highest level of attention in the run-up to the election. This month the Labour party hit the headlines when it reiterated its series of rental policies.
The party wants to introduce rent controls to better regulate the PRS. They are calling for a cap on rents so they cannot rise by more than inflation, secure three year tenancies and a ban on letting agent fees charged to tenants. They also want to reprimand rogue landlords by cutting buy-to-let tax relief for those whose properties fail to adhere to basic standards.
Conservative housing minister Brandon Lewis insists rent controls don’t work, arguing they force up rents and destroy investment in housing. However, housing pressure group Generation Rent thinks differently. It has welcomed the idea of a rent cap but remains wary about the various loopholes that would exist if Labour implemented their proposals.
The Conservatives’ key housing policy is the extension of the Right to Buy scheme to housing association tenants, which David Cameron says could give an additional 1.3m Britons the opportunity to buy their home at a discount. One of the Tories’ other key housing policies is the Starter Homes scheme, which will allow first-time buyers under the age of 40 to purchase one of 100,000 properties at 20% below the market rate.
Meanwhile the Liberal Democrats, like the Labour party, have put the proposal for a mansion tax at the heart of their housing campaign. The party’s other policies include the building of 300,000 new homes a year and an increased provision of Rent to Own homes.
Moving away from the election, the Residential Landlords Association (RLA) has warned that some agents and landlords might have to inform the National Measurement and Regulation Office (NMRO) about their property heating systems by the end of 2015.
Usually, the RLA says, anything that could be labelled as a communal heating system would require landlords to provide details to the NMRO. This would usually only affect landlords of institutions such as university halls and nursing homes, but it may now impact on HMO and bedsit landlords (and the agents acting on their behalf). If it does, they would have to send notification of their ‘heating network’ to the suitable authorities.
In other news, two separate surveys have offered an interesting insight into the workings of the lettings industry. In the first, conducted on behalf of removal firm Kiwi Movers, it was revealed that the majority of private sector tenants surveyed who have rented a property in the last five years say they didn’t get their full deposit back when moving out.
Only 20% of respondents said they got their deposit back without any issues, while the other 80% said they had experienced some degree of trouble when trying to reclaim their money. Tenants in London were the least likely to get their deposit back in full, according to the research.
The other study, commissioned by Property Let by Us and based on our own rental index data, found that letting property is the main source of income for 40% of landlords. The study, which surveyed 500 landlords, discovered that just over a third have full-time jobs while another 5% are part-time. Retirees and full-time landlords make up the rest.
While the sample is perhaps too small to draw too many conclusions, it would appear to suggest that buy-to-let is still very attractive to investors – not just as a second income, but as a sole income as well. This comes as rental yields continue to grow, with 20% of landlords in the survey experiencing annual rental yields of between 15 and 30%.
Other stories which caused a stir this month included the Property Ombudsman’s annual figures, which showed a 42 per cent rise in referrals, Wirral Council’s decision to introduce a selective landlord licensing scheme and Glasgow Council’s announcement that it is introducing spot checks on HMO properties.
That’s it for April. Next month we of course await the outcome of the general election to see how it affects letting agents. May is also the month in which agents must officially meet transparency rules when it comes to disclosing their fees.