Welcome to our Spring Newsletter 2023!
Landlord Broadband welcomes you to the latest edition of our quarterly newsletter. We hope that you enjoy it. If the latest industry news, customer market updates, and new content interests you, then read on. Want more? You can check out our previous newsletter here.
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New reports indicate that from the 1st of April, the energy regulator will reduce the price cap from £4,279 to £3,294. Despite this, it is predicted that energy bills will still increase, costing an extra £500 per year. A confirmation by the supplier is expected within the week. Ultimately, the lessening of government support will see more households continue to struggle before the situation hopefully improves. (Sky News/Gov.UK).
The Queen’s Speech in 2022 indicated a commitment to ridding the private rented sector of ‘no-fault’ evictions. During this time of crisis, from homes, to energy, to the cost of living, the discourse around ‘no fault’ eviction has never been more prevalent. Meanwhile, landlords are fighting to protect their own rights and interests. This extremely nuanced situation will likely continue to produce polarising, yet necessary, conversations well up until and after a concrete decision is made.
The financial sector is changing for landlords! The government has recently announced a phased mandate of Making Tax Digital for ITSA and a delay to implement it moving from April 2024 to April 2026. This is supposed to be one of the most significant modifications to income tax reporting that has ever occurred. What changes will occur? Well, self-employed individuals and landlords who earn more than £50,000 a year will need to use MTD-compatible software to keep digital records starting in April 2026 and provide quarterly updates on their income and expenses to HMRC.
Continuing on, at the beginning of April 2027, anyone who earns between £30,000 and £50,000 will have to do this. The majority of people will be able to join willingly in advance, allowing them to manage their tax affairs more quickly and without making the usual mistakes. An examination of the requirements of smaller enterprises, particularly those with incomes below £30,000, has also been announced by the government. The evaluation will consider the best way for these smaller enterprises to fulfil their income tax responsibilities and how MTD for ITSA may be tailored to fit their needs. (Gov.UK/ Bennettbrooks).
In terms of technological advancements, it has been indicated that out of all the top property technology trends, artificial intelligence makes up the largest majority. The use of artificial intelligence to process data and find patterns in real time is extremely important for making inferences about the data. The ability to predict trends in the customer market is essential to providing customers with the properties that the desire. (StartUp Insights).
According to members of the community debating the issues of property technology, the implementation of such technology is sometimes hindered by a lack of awareness or an unwillingness to change. Furthermore, it has been debated whether further down the line, real estate agents are struggling to do their jobs due to these changes. (UK PropTech Association). As a result, we expect these conversations to result in a higher level of collaboration across the property market in the creation and implementation of property technology.
Houses in Multiple Occupations are declining in England, decreasing 2.4% yearly. In the space of two years, the HMO market will have shrunk by over 21,000 properties. (Mortgage Solutions). Specifically, the North East’s HMO stock declined by 15.8% whilst other regions were not as drastic. For example, the HMO stock decreased by 1.6% in the North West, and by 6.7% in the South East. On the contrary, some areas saw an increase most noticeably across the West Midlands with a 16.9 increase, and Yorkshire and the Humber by 11.2%.
This decline was due to tighter licensing rules introduced back in 2018 according to Jonathan Samuels, CEO of Octane Capital, stating there are “21,000 fewer HMOs available across England than there were just two years ago… While any attempts to raise living standards for the nation’s tenants should be welcomed, it’s imperative that we also incentivise investors to remain within the sector.” Going on to say that if this isn’t fulfilled the number of rental homes available will only decrease, increasing the cost of renting at the expense of renters across the country. (Property Reporter).
Build to Rent
Exciting news for Leeds within the build-to-rent (BTR) sector! 488 BTR homes are planned for a waterside site in Leeds, and a £108 million forward finance agreement has been reached for the project. The managing director at HUB, Damien Sharkey, expressed his excitement stating, “We are thrilled to have secured forward funding for our second developing in Leeds… Work has already started on site, and we look forward to delivering a scheme that will continue the transformation of this exciting area of Leeds.” Sharkey is feeling optimistic about the future of the BTR sector and hints towards further deals coming in the near future. Simon Ringer, partner and head of property funds at Bridges Fund Management, shares the enthusiasm saying this scheme along with their other existing schemes in Leeds will help “addressing the clear local demand for quality lower-cost housing and creating an attractive public realm that will benefit the whole community.” (Insider Media).
There are improvements that could be made in the BTR sector and could be inspired by the hospitality industry. In the hospitality industry, how a customer is treated is just as crucial as the service they are receiving something the BTR operators need to take note of. What can BTR specifically learn about providing exceptional service? Firstly, putting in place a long-term strategy and goals which are thoroughly researched and communicated clearly to all involved and how they are expected to fulfil them. Second, identifying areas that require improvement by listening to residents and gathering and assessing customer feedback. Thirdly, continuing to put the needs of the consumer first and making sure they are being listened to. A quick, efficient approach for resolving possible issues must be established if the business is to increase the quality of its services. (BTR News).
The purpose-built student accommodation (PBSA) sector is in high demand this quarter, especially in York! With 75% of PBSA already taken for the upcoming academic year, university students are having a difficult time finding accommodation while enrolled at the University of York and York St. John University (Property118). According to reports, York has one of the nation’s worst shortages of student housing (Yahoo). The Stripe Property Group examined the rental market for the top 50 UK universities and discovered York had the highest demand. Unipol, a student housing charity, announced that this current student housing shortage is the worst it’s been since the 1970s, claiming students have had to resort to sleeping in cars and sports halls (NewStart). Other universities experiencing this include the University of Bath, where 54% of PBSA beds have been filled, and the University of Strathclyde, where 73% of student rentals are occupied (Property188).
The efforts towards solving this crisis look promising. After approving hundreds of beds in other plans, it is advised that the York council’s planning committee approve a 210-bed project at Peppermill Court to address this shortage. As part of a £20 million initiative by 2025, York St. John University is also building Peppermill and advancing other projects on its grounds. This is occurring as the number of students is expected to rise from 7,500 in 2021–2022 to 9,000 in 2026 (NewStart).
The Welsh government opened up a consultation regarding landlords being required to obtain a license for providing short-term holiday lets; the results of which should be very interesting. (ShortTermRentalz). We expect that in the consultation, the grievances of locals regarding the loss of culture and available housing will far outweigh the voices of such short-term landlords who do not want to comply. The government has already been set on remedying some of the issues that such short-term lets have caused in Wales. Thus, we imagine such legislation and regulation will continue being implemented in the future.
Furthermore, certain councils in Wales, such as Carmarthenshire, are considering doubling council tax for second homes and empty/vacant properties. This has long been debated since the implementation of Wales’ three-pronged approach. Some councils such as Bridgend have postponed such meetings in order to do their due diligence on such a controversial topic. (Nation.Cymru). Others, such as Gwynedd have already decided to go ahead, with this rule being enforced from April of this year. (Wales Online). If such a measure is effective in decreasing the number of second and empty homes, this could possibly be implemented across Wales. We will be waiting to see the results.
In addition, some councils in England have decided to go ahead with the doubling of council tax. Bristol council in particular are set for April of 2024, with bills doubling after one year of vacancy instead of the current two. They hope to reduce the number of vacant properties so that they can be used by the local community. (ITVX). Overall, it seems that early pioneers of this new rule will bare the brunt of the frustration of second homeowners, and other councils are waiting in the wings to see how others fare before they themselves follow suit.
Alongside the cost-of-living crisis, the inability of many to heat their homes over this cold period has been a prevalent issue. Just prior to Christmas the Scottish government announced that they were going to make £200 million available for registered social landlords over the next five years. This is intended to be used to fund the purchase of zero emission heating to be installed in their existing properties. This has now been extended to March of 2024, with only £17 million of this fund having been currently allocated (Gov.Scot).
The Welsh Nest Scheme offers free advice and to those who are eligible, a heating improvement package that can improve heating and lower costs. Eligibility is for those who own or rent a home, have inefficient heating, and they or another household member receives a means tested benefit or “has a chronic respiratory, circulatory or mental health condition and an income below defined thresholds” (EnergySavingTrust.org). While the heating improvement aspect of the scheme is not currently available to councils or housing associations, it seemingly is in place to aid vulnerable members of society. The effectiveness of the Nest Scheme is yet to be determined. (Gov.Wales).
In England, a £400 heating discount offered to households. However, this was not initially offered to housing association residents until it was argued in Parliament. In October the Energy Bill Relief Scheme was extended to housing associations and fixed contracts signed from December 2021. Then, in December it was announced that those on heat networks will have access to funding from February 2023. (National Housing Federation). With the focus shifting from decarbonising heating homes to simply having the ability to heat homes, the aim of net zero is seeming to drift further and further away.
Heating is not the only crisis affecting social homes across the UK. After the death of two-year old Awaab Ishak from a prolonged exposure to mould, a report has exposed that around 160,000 social homes suffer from mould and damp to a “notable” degree. With regulators clamping down on such an issue, registered social landlords are being held accountable for the conditions in which their tenants live. The Chief Executive of RSH, Fiona MacGregor, stated that “We expect all providers to continue to look at how they can improve the way they identify and address damp and mould.” Currently, according to the Housing Ombudsman for England, only 35% of social housing landlords have policies regarding damp and mould. We expect that this statistic will only increase in the coming years as social housing landlords will be expected to have effective measures in place to deal with such issues in the future. A higher level of accountability has certainly been set. (Gov.UK).
Should You Provide Internet in Student Accommodation?
Our latest piece of video content explores the question of whether or not landlords should provide internet in student accommodation. Watch it down below to find out what we think!
24 Student Flats
3 Rented Flats
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Thank You for Reading!
We hope you enjoyed this latest edition of our quarterly newsletter. We hope to see you next season!
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