Rents have risen across the UK but worries grow over economic fallout

Average rents have increased across the UK as a whole but with the uncertainty over the economy this trend may not continue.

In the lettings market index by HomeLet, it shows the average UK rent is £922, which is a 2.9% increase on the previous year.  If you remove London from the figures the average is £847, an increase of 6.8%.

Rents in London are actually continuing to fall, seeing a 3.9% decline in the past year.  Some of that is the effect of London tenants heading to the countryside.  It’s a similar trend nationwide but not to the same level as seen in London.

HomeLet chief executive Andy Halstead says: "We're seeing the value of the private rented sector's responsiveness and the crucial role it plays in supporting the changing needs for people across the UK.

“The data continues to show that demand remains exceptionally high in many areas. The needs of tenants have shifted throughout the pandemic, creating upward pressure on locations that offer more space, both inside and outside the property.” 

“Whilst rents are increasing, the expectation is that unemployment will increase further in the summer, undoubtedly leading to some tenants being unable to pay their rent. There are still millions of people on the government's furlough schemes, and many will need to move home. That's why I think it's essential that we continue to carry out checks on people who are on furlough whilst still offering rent protection for eligible tenants.”

“Whilst the broader economic outlook is uncertain, the private rented sector is exceptionally resilient. We're now seeing the optimism of the vaccine rollout, but safety must remain the priority. The industry is working more remotely, and things like online viewings will continue to play an essential part in the tenancy process.”

It’s a similar story in Manchester, which is included in the North West figures.  The average rent is £788, which is a 6.8% increase over the previous year.

The sustainability of rental prices will be tested in the coming months as furlough comes to an end amid wider economic uncertainty. 

Another one to keep an eye on.

If you have a large property or HMO, but with all the uncertainty in the market, eviction problems, potential licensing issues and ever-increasing regulations, you are considering your options, don’t hesitate to give us a call.  We specialise in these types of properties and can help you to evaluate your options.

Call 0161 850 5588 or email info@armisteadproperty.co.uk

Thanks for reading

Peter Armistead

Founder, Armistead Property

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Most landlords have doubts about staying in buy to let

A recent survey by comparison website Rentround found that 53% of landlords surveyed were uncertain about staying in the buy to let market.

A lot of that uncertainty stems from issues related to Covid-19 affecting tenancies and property prices, potential defaults after furlough ends as well future tax hikes targeted at landlords.

One of those tax hikes is a possible rise in Capital Gains Tax which I have written about previously here.

This is on top of the very real problems from coronavirus restrictions and an effective ban on evictions.  You can read more about the evictions mess for landlords and tenants here.

So, it comes as no surprise that many landlords are considering other options.  To date, we haven’t seen a growth in sales from landlords quitting the sector but many, I believe, are waiting to see what the next few months bring.

One area that has grown is guaranteed rent as landlords try to secure income levels but some agents have removed those products from their offerings with the uncertainty of the lockdowns and the end of furlough.

Another one to keep an eye on.

If you have a large property or HMO, but with all the uncertainty in the market, eviction problems, potential licensing issues and ever-increasing regulations, you are considering your options, don’t hesitate to give us a call.  We specialise in these types of properties and can help you to evaluate your options.

Call 0161 850 5588 or email info@armisteadproperty.co.uk

Thanks for reading

Peter Armistead

Founder, Armistead Property

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Legislation and Regulations that can hit Landlords with Unlimited Fines

For the last few decades, private rentals and especially Houses of Multiple Occupation (HMOs) have become more and more popular with a large increase in landlords.

But alongside that, we have seen a huge increase in the level of Legislation, Regulations and the introduction of Licensing by many councils across the UK and here in Manchester.

And breaching those rules can carry unlimited fines with civil penalties of up to £30,000 for each and every breach of the relevant Legislation, Regulation or Licence condition.

These are just a few examples of the breaches that Landlords and HMO Landlords could be fined for…

• No licence

• Wrong licence

• Unintentional HMO ( You’re liable even if you didn’t know)

• Breach of Management Regulations

• Breach of Right to Rent

• Breach of Planning

• And many, many more

And remember each breach could result in a separate £30,000 fine as well the potential to lose your “fit and proper person status” which would result in not being able to hold any licences to let property.

Let’s look at one of the breaches that has caught landlords out and that is an unintentional HMO.

In Manchester, for example, you need planning permission to let a house out to more than three or more unrelated people, if the house is not currently used as a house in Multiple Occupation. This comes under Article 4 Regulations.

So, what is an unintentional HMO?

You may have a single let property that is let under a standard contract to a single tenant or couple.

Your single let is then turned into what is legally an HMO without your knowledge (3 or more unrelated people living there).

You are then legally responsible for complying with ALL the HMO legislation such as; fire doors, closers, smoke alarms, maintenance, grass cut, nothing in common-ways and many other requirements.

So, if your property is then in an additional licensing area you could be liable for a civil penalty which as of today is up to £30,000 for non-compliance.

Many landlords that have been caught out by this, have appealed their fines as they were not aware and hadn’t authorised any change but I’m not aware of any that won those appeals.

Something to be aware of if you have a larger property you let or plan to let. If you are considering your options, don’t hesitate to give us a call.  We specialise in these types of properties and can help you to evaluate your options.

Call 0161 850 5588 or email info@armisteadproperty.co.uk

Thanks for reading

Peter Armistead



Founder, Armistead Property

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Evictions Mess for Landlords and Tenants

After a year of an effective ban on evictions, it appears the policy could cause further problems for tenants and landlords as the unintended consequences stack up.

The NRLA (National Residential Landlords Association) has said that research shows that approximately 840,000 tenants have built rent arrears since the restrictions began.

Some of these arrears are now approaching a level where tenants will simply be unable to afford to catchup even with payment plans.

With the current measures due to relaxed from June, it’s possible there will be a spike in evictions and with the damage to credit scores many landlords will be vary of accepting applications from those tenants.

Most landlords have been working with their tenants to help them as much as possible and as many as 60% have lost rental income and 39% said those losses were continuing to increase, a situation that cannot continue indefinitely.

To make matters worse for Landlords is the backlog in the courts.  With so few cases being heard it is estimated that the time to evict a tenant could increase by 6 months after the current restrictions come to an end.

Even if you are lucky enough to secure a hearing and are granted an enforcement order, there is a shortage of bailiffs to enforce it, meaning the losses for those landlords will continue to stack up.

At the moment the main exemption from the eviction ban is substantial rent arrears – 6 months or more – but with the system backed up and the potential relaxation on eviction rules in June the situation could go from bad to worse for many landlords.

If you have a large property or HMO, but with all the uncertainty in the market, eviction problems, potential licensing issues and ever-increasing regulations, you are considering your options, don’t hesitate to give us a call.  We specialise in these types of properties and can help you to evaluate your options.

Call 0161 850 5588 or email info@armisteadproperty.co.uk

Thanks for reading

Peter Armistead

Founder, Armistead Property

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Landlords Call for a change to EPCs

The National Residential Landlords Association is calling for a change to EPCs.  They are backing a report by MP’s that says the EPC evaluation is out of date and there are better measures to measure the energy efficiency of homes.

The current system has every property rated on a scale of A to G.  This must be shown to purchasers of properties and also to potential tenants of a rented property.

Rental properties have to achieve a rating of E or higher and currently, the government plans to increase this to a minimum of a C rating for all new tenancies from 2025 and expanding to existing tenancies from 2028.

This could cause a wealth of problems in the rental sector, especially for larger properties and HMO’s.  EPC’s have been described as outdated and fail to fully account for modern low carbon heating and other measures.

In the report by the all-party Environmental Audit Committee, they suggest replacing the current EPC Rating System with Building Renovation Passports using an approved standardised methodology.

This would allow landlords to have a clearer idea of what measures they would need to undertake in order to achieve the efficiency standards required.

The committee report also states that the government look to have underestimated the costs to hit the carbon target on homes by 2050.  It could potentially cost an extra £65 billion.

Currently, 19 million UK properties need energy efficiency upgrades to meet EPC band C and this could cost on average £18k per property.

The report calls on the government to set out how energy efficiency improvements can be achieved in properties in a cost-effective, practical and affordable way.

It also says that schemes such as Home Upgrade Grants, Social Housing Decarbonisation Fund and phase two of the Green Homes Grant Local Authority Delivery Scheme to be fully funded and rolled out.

And the social rented sector should be subject to the same standards as the private rented sector which has long been a bone of contention.

This could have a huge effect on Landlords in the private rented sector, especially those with larger properties as some of the potential costs could be eye-watering.

If you have a large property or HMO but with all the uncertainty in the market, potential licensing issues and ever-increasing regulations (such as energy efficiency) and you are considering your options, don’t hesitate to give us a call.  We specialise in these types of properties and can help you to evaluate your options.

Call 0161 850 5588 or email info@armisteadproperty.co.uk

Thanks for reading

Peter Armistead

Founder, Armistead Property

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Landlords: Tougher Fire Regulations in HMO’s and Blocks

The Home office has announced new measures to improve fire safety in HMO’s and blocks.  These measures could see Landlords and Agents facing unlimited fines for non-compliance.

The new regulations have resulted from a Fire Safety Consultation.  However, they will only apply to HMO’s and multiple tenancy premises. They will not apply to domestic properties.

It is believed the regulations will come into force in 2022 as part of Building Safety Legislation.

The regulations will require each building and HMO property to have a fire risk assessment and also detail how that information is recorded throughout the lifetime of the building.

Fire Minister Lord Greenhalgh says: “Everyone should be safe in the buildings where they live, stay or work.

“Our new measures will improve fire safety and help save lives but will also take firm action against those who fail in their duty to keep people safe.”

And Roy Wilsher, National Fire Chiefs Council Chair, adds: “We want to see safer buildings for residents and are committed to working constructively with the Home Office and other partners on the Grenfell Tower Inquiry recommendations and other key fire safety policy areas.”

The government has said the new measures will:

·         improve the quality of fire risk assessments and competence of those who complete them.

·         ensure vital fire safety information is preserved over the lifespan of all regulated buildings.

·         improve cooperation and coordination amongst people responsible for fire safety and making it easier to identify who they are.

·         strengthen enforcement action, with anyone impersonating or obstructing a fire inspector facing unlimited fines.

·         strengthen guidance issued under the Fire Safety Order so that failure to follow it may be considered in court proceedings as evidence of a breach or of compliance.

·         improve the engagement between Building Control Bodies and Fire Authorities in reviewing plans for building work.

·         require all new flats above 11 metres tall to install premises information boxes.

With the potential for unlimited fines any HMO or Block Landlord should ensure they take action to ensure compliance.

If you have a large property or HMO but with all the uncertainty in the market, potential licensing issues and ever-increasing regulations, you are considering your options, don’t hesitate to give us a call.  We specialise in these types of properties and can help you to evaluate your options.

Call 0161 850 5588 or email info@armisteadproperty.co.uk

Thanks for reading

Peter Armistead

Founder, Armistead Property

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Oxford Council’s Landlord Licensing Plan Could Affect You

Oxford Council, a labour controlled council, is expecting it’s new licensing scheme to be passed today (10th March)

The scheme has had mixed feedback from landlords and agents on one hand and the council and tenants on the other.

The council are hoping to renew an additional HMO Licensing scheme as well as bring in selective licensing to cover all privately rented homes in Oxford.

The scheme is that big that it will need government approval.

Licensing is spreading

Other councils throughout the UK are likely to be watching the outcome of the vote and implementation of the scheme as council licensing becomes seemingly more and more popular.

The council carried out a consultation on their plans for extending HMO Licensing and bringing in selective licensing for the rest of the cities rented accommodation.

72% supported renewing the HMO Scheme and more than two thirds also agreed with the introduction of selective licensing.

Around 50% of Oxford houses are privately rented.

Oxford Council Leading the charge

Oxford was the first council in England to bring in a scheme requiring all HMOs to be licenced in 2011, a move which other councils promptly followed.

Oxford Labour councillor Alex Hollingsworth says: “We recognise there are strong differences of opinion between landlords and agents on the one hand, and tenants, residents and organisational representatives on the other. However, there is broad consensus that there are issues in the private rented sector which do need addressing and we believe that licensing is the best way of doing this.”

And he continues: “Half of homes in Oxford are now privately rented, so bringing in licensing across the whole sector will help us to deliver on our plans to protect tenants, drive up standards and crack down on rogue landlords. A clear majority of tenants and residents agree with our approach and back our plans.

“But licensing isn’t just good for tenants and residents generally. Renewing additional HMO and licensing all privately rented homes will protect the majority of landlords and agents who do a good job. Tenants will have the confidence that they are responsible landlords and agents as rogue operators are driven out of the market.”

Only 30% of Landlords in favour

In the consultation, Landlords and agents had a different view on the implementation of the schemes.  Only a third of Landlords and Agents agreed with the idea of selective licensing with nearly two thirds opposed.

Failure to comply with the schemes can lead to landlords facing large fines which in the case of HMOs can be in excess of £100k and even being banned from being a landlord.

Always get expert advice and if you run into problems with a council, speak to a professional.

Your council could be watching.

If you have a large property or HMO but with all the uncertainty in the market and potential licensing issues, you are considering your options, don’t hesitate to give us a call.  We specialise in these types of properties and can help you to evaluate your options.

Call 0161 850 5588 or email info@armisteadproperty.co.uk

Thanks for reading

Peter Armistead

Founder, Armistead Property

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Budget 2021 - LANDLORDS

Budget 2021 - LANDLORDS

The Chancellor Rishi Sunak has been announcing his budget proposals.

Here’s a quick summary of the measures that could affect landlords.

 Stamp Duty Holiday

The Stamp Duty Holiday currently in force will be extended until June 30th on properties up to £500,000.  Then from July the Stamp Duty Holiday will continue until September 30th but with the upper limit being reduced to £250,000.

It is expected in October the Holiday relief on Stamp Duty will be removed.

Hopefully with the long extension it will remove some of the pressure on purchasing properties as the current Stamp Duty deadline has caused a backlog of applications and increased processing times.

Corporation Tax

For those landlords who have incorporated (as well as estate and letting agency businesses) there will be an increase in Corporation Tax from 19% to 25% in the new tax year starting April 2023.

There are further changes to be announced about how it will be applied. 

This could potentially affect a number of landlords as being incorporated has become more and more popular in the buy to let sector.

Capital Gains Tax

There has been no announcement in the budget on Capital Gains Tax.  I have written about the possibility of changes previously here.

There are rumours that there is to be an extensive consultation on changes but nothing concrete as yet.

Government Guaranteed Loans

As you may have seen in the press there were leaks that the government were looking at guaranteeing mortgage loans for buyers.

The chancellor confirmed that there will a guaranteed loan scheme that will come into effect next month (April 2021).

The government scheme will guarantee 95% mortgage loans on property purchases up to £600,000.  It is unlikely that this will apply to investment purchases.

Business Rates

There was some good news for Estate/Letting Agents and other business that there will be a 100% business rate holiday until June 30th and an approx. 66% relief after June.

 Here are a few of the other announcements:

•  Furlough to be extended until September 30th.

• More self-employed people will be eligible for help.

• £20 uplift in Universal Credit to be extended for another 6 months.

• Minimum wage to increase to £8.91 an hour from April.

• No changes to rates of income tax, national insurance or VAT. Although thresholds to be frozen.

• Personal income tax allowance to be frozen at £12,570 from 2022 to 2026.

• Higher rate income tax threshold to be frozen at £50,270 from 2022 to 2026.

• Apprenticeship grants to rise to £3,000.

• No rise this year in fuel or alcohol duties.

• Re-opening grants for non-essential businesses of up to £6,000 for most premises, and £18,000 in exceptional circumstances.

• Another £400m to help arts venues in England to reopen and £300m for professional sport and £25m for grassroots football to reopen.

• An additional £19m for domestic violence programmes and £40m for Thalidomide victims.

Not a great deal of good news for the landlord / buy to let sector.

If you have a large property or HMO but with all the uncertainty in the market, you are considering your options, don’t hesitate to give us a call.  We specialise in these types of properties and can help you to evaluate your options.

Call 0161 850 5588 or email info@armisteadproperty.co.uk

Thanks for reading

Peter Armistead

Founder, Armistead Property

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What can we expect in the property sector from the spring budget?

The chancellor is due to deliver the budget on March 3rd and there have been a number of rumours of what we can expect for the property sector.

The estimated cost of the pandemic by the end of 2021 is estimated to be more than £300 billion so tax rises are expected to feature.

There have been many rumours of a wealth tax (although there have been campaigns for this for years) and it would be a radical departure from previous conservative government policy.  The tax would be based on the total value of an individual’s property portfolio disproportionately hitting those with larger properties. 

Another of the rumours circulating is a possible rise in capital gains tax which I wrote about here. This could negatively impact the market, especially those looking to sell.

https://www.armisteadproperty.co.uk/news/landlords-fear-a-rise-in-capital-gains-tax

The other hot topic of discussion is whether or not the chancellor will extend the Stamp Duty Holiday. 

The deadline of March 31st is fast approaching and has caused a delay in completions due to an increase in applications and lenders requiring more checks and information from clients and brokers.

It’s been reported that the chancellor could be considering a 6 week extension to allow time to clear the backlog of existing applications.  Presumably, this extension would only apply to those who have started the process by the March 31st deadline.

Tax reforms are always controversial and this year that is complicated further with the pandemic and leaving the European Union. It’s highly likely that the property sector will be impacted by the Spring Budget, but we’ll have to wait and see just how much.

If you have a large property or HMO but with all the uncertainty in the market, you are considering your options, don’t hesitate to give us a call.  We specialise in these types of properties and can help you to evaluate your options.

Call 0161 850 5588 or email info@armisteadproperty.co.uk

Thanks for reading

 Peter Armistead

Founder, Armistead Property

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More Landlords are Relying on Mortgages for Buy to Lets

Investors and Landlords are relying more and more on mortgages for buy to lets, with the number of cash purchases falling.

The Stamp Duty Holiday deadline, coming up at the end of March 2021, has helped to fuel this with cash purchases falling to an all-time low.

In 2020 cash purchases by landlords fell to 52% from a high of 62% a few years earlier.

In part, this is due to new and small landlords taking advantage of the stamp duty holiday who rely more on mortgage finance.

This has also fuelled a delay in application processing with Mortgage Brokers reporting that lenders are requiring much more information than before, and some will struggle now to complete before the deadline.

Cash purchases on buy to let properties remain highest in the North East, North West and Wales where average prices are typically lower.

Whilst some have benefited from the Stamp Duty Holiday it still remains to be seen whether it has actually helped or simply manipulated the market.

Property prices have risen over £14,000 on average since the stamp duty holiday was announced but the typical saving in tax is only £4,500.

If you have a large property or HMO you currently let or just planned to let, but with all the uncertainty in the market, you are considering your options, don’t hesitate to give us a call.  We specialise in these types of properties and can help you to evaluate your options.

Call 0161 850 5588 or email info@armisteadproperty.co.uk

Thanks for reading

Peter Armistead

Founder, Armistead Property

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