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 you find this edition informative and a useful check-in. We look forward to hearing from you in the future.
What’s going on in our Industry?
Throughout the year 2019, we have watched the property market be constantly affected by the uncertainty of Brexit.
Legal: Over the last quarter, it has been revealed that a recent Court of Appeals case has highlighted that taking action to recover rent without an expert understanding or advice can be fraught with risks for landlords, Walker Morris’ team have commented on this, “The ability to forfeit a lease and recover possession is a landlord’s ultimate remedy. However, the law of forfeiture is complex and can involve significant traps for the unwary. This case, therefore, makes essential reading for landlords who wish to preserve and protect the right to forfeit.” But what does it mean to forfeit? – It is the landlord’s right to bring the lease to an end early when a tenant is in breach of its obligations, including non-payment of rent. A landlord can waive a right to forfeit by unequivocally confirming the existence of the lease and communicating this confirmation to the tenant.
Technology: In recent months, Property Technology (PropTech) has been discussed in both positive and negative lights. Bernard Carr, a contributor to Forbes, has most recently discussed a number of technological trends that are disrupting the Real Estate sector. One of these technologies is named “Big Data”, which is about gathering sensitive data and historical documents to protect all building types. This data can range from fire safety to telecommunications which will then be translated into proactive maintenance. Including information like this available for tenants allows for the discovery of a possible issue with the equipment before anything happens, and a plus side of this allows the landlord and tenants to stay happy! You can read more about technologies that are disrupting the real estate industry here.
Financial: An article published in late 2019 by PlaceTech discussed the Future of Real Estate Finance – One of the major financial developments within the real estate sector is the growth of bridge lending. Gross annual lending in this space hit £5.6bn in Q2 2019, according to the West One Bridging Index (WOBI). That has been a steady rise from just £1.7bn in Q2 2013. LendInvest, for example, was launched as a direct response to a shortage of short-term loans around the time of the financial crisis. Among its products, it offers up to 75% LTV on bridging loans of up to 18 months. It also covers other areas banks are wary of considering, including development finance. But technology isn’t the only thing. In current years, numerous cryptocurrencies have tried to tokenise real property: essentially selling blocks of buildings to investors. But none of these have taken off, and part of the trouble is the absence of regulations in the crypto market.
What are we working on?
Letting Agents: Since our previous newsletter, Letting Agents have continued to scramble to regain stability following last year’s letting fee ban, and the loss of income which therefore affected the majority of agents. It could be argued there has been a lack of morale among letting agents in a couple of months, with one survey finding that 10% of agents have lost one-third of their revenue after the ban, with as little as 15% who have found alternate sources of income to bridge the gap and prevent any losses. It’s important however to recognise there are positives within the sector as well! Propertymark has been regularly in the news for their charity fundraiser “The great agent sleepout” where over 100 agents have slept rough for a night in order to raise over £66,000 for homeless charity Centrepoint. Technological developments continue to be the place of optimism for letting agents, with new apps and property portals launching this year in a hope to give the industry the boost it needs!
Landlords: Since the beginning of the year, many changes have been proposed for landlords. One of the main changes being the abolition of Section 21, which is a legislation that allows landlords the right to give ‘no-fault evictions’. Landlords throughout the country have widely opposed this change in legislation (NLA). In January, the Government blocked Liverpool’s controversial selective licensing scheme, as there was insufficient evidence of there being a low demand for housing in the city, which was just one of the criteria for the implementation of the scheme (RLA). The MHCLG announced that it has plans to dedicate £112 Million to address the problem of rough sleeping in the UK (NLA), and the government has issued mandatory five-year electrical safety checks, which will be enforced from July 2020, and will undoubtedly help to ensure the safety of tenants in private rental properties. On a positive note, however, the housing secretary has proposed the idea that responsible tenants should be allowed pets in rental properties (The Negotiator), as only 7% of rental properties are currently advertised as animal-friendly. Regarding the NLA and RLA merger, the two companies are still operating as separate entities, but are still planning to merge in 2020, collectively representing over 80,000 landlords(NRLA)!
Serviced accommodation: This quarter has focused heavily on the growth of co-living, with many providers incorporating more flexible, shorter-term offers alongside the longer-term options. A recently published report shows that we have seen a ‘noticeable rise in serviced accommodation, be it aparthotels, serviced apartments or co-living developments’ but rather than this leading to an erosion of the traditional hotel market share, hotels are learning from these models and co-opting them.
Furthermore, Booking.com has announced a year-long partnership with Google nest in order to build a more connected and seamless trip experience for travellers and hosts. This partnership will encompass offers and incentives for Booking.com customers as well as enhancements for partners that will facilitate a premium expense for guests.
Housing Associations: Prevailing news topics for housing associations this quarter have concerned: data protection and technology within the social housing sector and inaccessibility to the UK housing market.
Increasing inaccessibility to homeownership has become evident; recent data from the Office of National Statistics (ONS) showed that just half of 35 to 44-year-olds had a mortgage in 2017, compared to over two-thirds in 1997. Furthermore, the average age of first-time buyers in the UK increased to 33 last year.
Awareness of cyber-security issues were raised following a £1million cyber scam on a housing association in England. Following the scam, the social housing sector was claimed to be targeted by cyber-criminals on an almost daily basis. Digitalisation and the increase in cyber-security issues it induces highlights the importance of GDPR compliance within the housing industry; the 2016 GDPR regulations introduced significant sanctions for breaches of data protection and will live on in UK legislation after Brexit. All landlords must understand that data cannot be processed without a clear legal basis and subject to consent (in an employment setting this is even harder to come by, as the power imbalance makes it difficult to ensure employee consent was freely given). Data must, moreover, be stored securely and kept for no longer than necessary.
New Developments: 2019 proved to be a difficult time for the construction sector as the political uncertainty created great difficulty for businesses when planning for the future. Overall, the year saw each month decline in output, and the developers of housing faced an exceeding amount of pressure. However, at the start of February, it was announced that the Build to Rent (BTR) sector had undergone rapid growth across the country, the 2019 total was up by 57% on 2018’s figures. The BTR approach is said to be a new take on the housing sector, as service is seen as a core part of the offer rather than a premium, allowing residents a hassle-free experience from the start of the experience, up until they terminate their tenancy. In a recent survey conducted by British Property Federation and Savills, it has been revealed that there are now 152,071 homes of this type in the UK, of which 40,181 are complete, 35,415 under construction and 75,475 in planning.
New propositions: 2019 saw the launch of our Smart Property Management service. We are currently exploring a developing product range of smart devices that are new to the market. Therefore, our current focus is on the portfolio managed smart heating controls. However, watch this space for new products as we test and add them to our range! Smart homes are only getting smarter due to IoT (Internet of Things) devices and machine learning becoming more advanced. We expect the future to see WiFi technology transforming from smart homes into high-speed smart cities. Our portfolio smart heating solution has been available from 1st November so if you include heating bills in the rental package and want more predictable costs and savings to your bottom line then please get in touch.
Meet the team? – Lauren Rose
Meet marketing team member Lauren Rose, our Landlord aficionado and Facebook advertising expert. Here’s what she gets up to when she’s not teaching us new data about Facebook adverts. “Hi! I’m Lauren, I’m part of the marketing team and currently manage the Landlords side of the business. Since starting at Landlord Broadband, I’ve really enjoyed developing my social media marketing skills, as well as learning new things about the field in general, alongside studying Marketing at the University of York. When I’m not working and/or studying, I love to cycle, hike, and try new and original places to eat and drink!”
That’s it from us, we hope you enjoyed our newsletter,
(The champions of Wi-Fi friendly accommodation)
Fun Fact: Wi-Fi has been around for quite some time! Those of us old enough to remember dial-up internet may think that WiFi is a new technology. In fact, WiFi has been around since September 1990! It will be 30 years old this year. Feel old yet?