Greetings Humans of Landlord Broadband,
Thank you for subscribing to our quarterly newsletter which aims to keep you updated on what we have been getting up to, and what has been moving and shaking in our industry. We hope that you find this edition informative and a useful check-in. We look forward to hearing from you in the future!
What is Happening in our Industry?
A break-down of this quarter in the property industry, by virtue of technological, legal and financial analysis.
“Even as COVID-19 shifts priorities in real estate, PropTech continues to remake the market”. There has been optimism expressed about the resilience of PropTech during COVID-19 and predictions about the state of the housing market, for example: virtual reality will become more widespread due to the decrease in commuting (MIT Sloan School of Management).
Furthermore, the pandemic has put the rental market in the spotlight and standing out from the crowd has never been more important – technology is pivotal in this (Property Week). Landlords and developers need to utilise technology in the most effective ways – for landlords this may involve adopting tech-enabled property management services to improve responsiveness and accessibility for tenants, property technology features such as smart heating or smart key management and of course, reliable Wi-Fi infrastructures that are able to meet the growing internet demands of tenants.
In the previous quarter of the year, the legalities of the real estate sector continue to be monitored by the government to the best interest to both the landlord and tenant. The code of practice for commercial property relationships that has been published has had an impact on the use of forfeiture and encourages an understanding and honest relationship to act reasonably. As seen in many other aspects of society, rules and guidelines are constantly watched and changed in an attempt to move forward. There are no current announcements or updates regarding student housing for the next academic year – this is something to keep an eye out for.
The financial climate this quarter has delivered both positives and negatives to the property market. Due to the Stamp Duty holiday (which runs until March 2021), people have rushed to buy and sell houses, causing the average UK house price to rise to £230,000, a 6.5% growth on last year (Financial Times). Building on this, Landlords made up 15% of November house sales, which shows that the buy-to-let market is benefitting heavily from the Stamp Duty Holiday (The Guardian). Looking forward into 2021, we are yet to see the impact of Brexit after its completion, which could cause hardships for some landlords due to new EU immigration restrictions. Students may be a saving grace in this regard; university starts were deferred due to the pandemic, causing a potential influx of new students and an increase in privately rented housing next year. Another positive coming from the world of finance this year is the Governments’ injection of funds into the property market: £12 billion has been given to the Affordable Homes Scheme, to build 180,000 new homes, and £450 million has been given to the Home Building Fund, to support small developers (Property Investor Today).
Despite the many challenges we have faced this year, it seems that the property sector can look to 2021 with a positive view.
What is Happening in Our Customer Markets?
What a year! 2020 has been unprecedented in many aspects and it is safe to say that the UK property industry has faced both its difficulties and successes. Each of our customer markets have been impacted by the Covid-19 pandemic in different ways, and we at Landlord Broadband have done everything we can do to support them in #KeepingPeopleConnected.
2020 has definitely been a landmark year for landlords. Many landlords have supported their tenants throughout the year and have faced financial challenges by doing so – “Landlords have gone above and beyond to keep tenants in their homes in the dark days of the pandemic, but they need help. To that end we will be continuing to campaign for a comprehensive financial package from the Government to support the sector and allow tenants to pay off rent arrears built as a result of the pandemic” (Ben Beadle, NRLA Chief Executive). Despite this hardship, national statistics disclose that private rental prices grew by 1.4% in England, 1.6% in Wales and 0.8% in Scotland in the 12 months to October 2020 (ONS).
Furthermore, landlords have been subject to the dynamic nature of government regulations this year, notably regulations regarding evictions. The current guidelines on eviction notice periods are still effected by COVID-19; with a minimum notice period of 3 months if given between 26th March 2020 and 28th August 2020, and a minimum notice period of 6 months if given on or after 29th August 2020 (Gov.uk). Another important regulation update this quarter is the Government’s publication of the latest How to Rent guide. The new version incorporates recent legislative changes such as Minimum Energy Efficiency Standards, the Tenant Fees Act and electrical checks. Landlords are required to provide tenants with the latest version of the How to Rent guide at the start of any new tenancy or renewal – or forfeit the right to rely on a section 21 eviction notice (LandlordZONE).
Letting agents have faced some challenging statistics this quarter. A major industry poll has revealed that nearly 57% of landlords are less likely to use a letting agent during the next 12 months, with 27% undecided; the extra costs and additional taxes faced by many landlords recently are driving more of them to use online self-management platforms such as Howsy and Rentr to run properties and tenancies (LandlordZONE). Despite this, letting agents have been kept busy due to the increased demand within the housing market – fuelled by a search for space and more desirable locations, the pandemic and its lockdowns have released latent demand for housing with more focus than ever before on the size and quality of homes (Estate Agent Today).
The pandemic and its lockdowns have clearly had devastating impacts on UK tourism; Visit Britain’s latest statistics for inbound tourism to the UK in 2020, as of December 11th, is a decline of 76% in visits to 9.7 million and a decline of 80% in spending to £5.7 billion. Alongside this, the home sharing economy has also declined since last year, seeing 2019’s 58.1 million users drop almost 60% to 23.3 million users in 2020, 73% held by Airbnb listings (The ASAP). However, things are looking up – the 2021 forecasts for inbound tourism is 16.9 million visits, up 73% on 2020 but only 41% of the 2019 level; and £9.0 billion to be spent by inbound tourists, up 59% on 2020 but only 32% of the 2019 level (Visit Britain).
Throughout the quarter, housing associations have continued to support the vulnerable and adapt to different government guidelines. Perhaps the biggest thing to come from this sector is that the government have said that bailiffs must halt evictions during the lockdown periods to avoid the potential danger to those involved at this uncertain time. The secretary of state for housing has also launched a new £15m scheme to house the clinically vulnerable rough sleepers during the COVID-19 winter. These are both positive actions that will cause more to be safe and a further need for our continued support in offering multi-room broadband for those that call the housing association they are accommodated in home.
Furthermore, some social landlords have indicated a lack of trust between occupants and landlords, which may be a growing problem as bailiffs are unable to evict those not paying. This is definitely something to keep an eye on to see if our services can address this trust issue by allowing more to feel comfortable in their homes.
Purpose-Built Student Accommodation (PBSA)
Despite challenges inevitably created due to COVID, the PBSA market is still going strong. In fact, the sector has grown by a net increase of 2.6% in 2020! A new obstacle that the industry has had to face has inevitably been keeping up with the increasing technological demands of students. With lectures and seminars being undertaken online, the need for a good Wi-Fi connection is vital (that’s where we come in!). This is also alongside the possibility for digital check in options, self-service parcel collection and more, in order to reduce contact and streamline processes.
An exciting development in the PropTech Industry is the new booking platform for PBSA, called Housemates. This allows students to view and book accommodation online, and only charges Agents 20% of the first month’s rent, which is considerably less than charges found in standard routes to market. However, despite losses due to COVID contract cancellations, 2021 looks positive for the PBSA sector. There is an expectation for university applications to rise, and subsequently, a higher need for accommodation. This means that a variety of PBSA projects are planned to go ahead in a range of University cities next year and beyond!
Meet the Team at Landlord Broadband – Ft. Jason Mitchell
Introducing the newest team member at Landlord Broadband, marketing assistant Jason Mitchell: “Hi, I’m Jason! I work in the marketing team at Landlord Broadband and am currently studying Business & Management at the University of York. I’m originally from King’s Lynn, a town in West Norfolk and I’m 22 years old. I’m a big Liverpool FC fan and enjoy playing or watching most sports but especially football, rugby, athletics and F1! I’m the second oldest of 5 kids and I have a goal to set foot on every continent, currently at 3/7.”
That is it from us, we hope you enjoyed our newsletter,
Landlord Broadband (the champions of Wi-Fi friendly accommodation).
Fun Fact: 7.5% of adults in the UK have never used the Internet. This number shrinks by about 1% every year (Visual Oak).