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 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?
During the last quarter we have seen several significant changes in property technology (PropTech), super-prime rental, and the economy; amidst the seemingly ever-changing Brexit deadline, currently scheduled for the 31st October 2019.
Legal: Whether you’re a staunch remainer or avid Brexiteer, there is no denying that the uncertainty around Brexit is causing property market jitters. The result of the ongoing Conservative party leadership contest will heavily influence the outcome of Brexit, making it a pivotal moment for the future of the economy and housing market. There have been numerous MP votes against the UK leaving the EU without a deal, but currently a no-deal Brexit remains the default position. In September 2018, Bank of England governor Mark Carney warned that leaving the EU without a deal could send house prices tumbling by a third, and in February this year he added that UK growth would be ‘guaranteed’ to fall in the event of a no-deal Brexit.
Technology: There’s been a lot of talk about how PropTech can address the ‘pain points’ property professionals face on a daily basis. The battle to work smarter and be freed up to deliver value-added activity is one of the largest PropTech areas. Real estate businesses and tenants alike are embracing digital transformation to disrupt and improve the way residential and commercial property is bought, sold, rented, designed, built and managed.
Financial: Interest rates have remained at 0.75%, the highest level since March 2009 and wages rose at an annual pace of 3.4% in the three months to April. The UK economy has reached a “zero output gap” meaning it is growing at its maximum sustainable pace. However, high rents are making young people less mobile and therefore the number of young people in private rented accommodation who moved for a new job has almost halved in 20 years. Despite the higher wages available, financial incentives for moving are lower, researchers say. Pay gains are being swallowed up by high housing costs. Private rents have risen by almost 90% in the UK’s highest-paying local authority areas, while rents have increased by just over 70% among the lowest-paying local authority areas.
What are we working on?
Letting Agents : Some 30 months after being announced the Tenant Fee Ban finally comes into effect on the first of June this year. There appears to be little change and comfort in letting agents’ minds over what this means for their sector. They are still just as confused, tense and worried as they were months ago – with continuing concerns over how the ban will affect their income and ability to compete. ARLA continues to hold many seminars and meetings in order to help prepare letting agents for the impending ban by offering explanation and information on how to navigate the process. Looking to the future, although the atmosphere is turbulent at the moment in the letting agent sector, the support showed within the community suggests much promise for brighter things to come.
Landlords : Activity in London’s super prime rental market continues to grow as more people opt to rent rather than buy property in the capital, amidst political turmoil. The number of tenancies agreed above £5,000 per week in London during the first four months of the year hit a record-high of 41, despite it being a traditionally less active time for the rental market.The uncertain political situation also explains why we are seeing the re-emergence of super-prime tenancies with ‘option to purchase’ clauses written into the contract, so renters can effectively ‘try before they buy’.
Serviced accommodation: Average daily rates within the serviced accommodation sector remain moderately consistent at £86.58 in February 2019. As for room occupancy rates, the result for the sector was 73% in February 2019. In terms of room occupancy rate by destination type, it is evident that cities and large towns have the highest demand for serviced accommodation with a 74% occupancy rate. In line with this, data has been released regarding the growth of Airbnb in major UK cities, leading to fears of “hollowed out communities”. Noted cities are London and Edinburgh; London’s Airbnb market has quadrupled since 2015, likewise, listings in Edinburgh have doubled since 2016. However, Airbnb state to have led the way with “clear and proportionate” rules. In regard to legislation within the sector: Visit England have recently launched the tenth edition of ‘The Pink Book’ – serviced accommodation providers can access this resource online to ensure they are compliant with regulations from food hygiene to alcohol licenses and health and safety.
Housing Association: We have seen Housing associations becoming more vulnerable than ever to market fluctuations with the Brexit leaving date edging ever closer. London Assembly have called Sadiq Khan and the government to push ahead with housing first, using independent stable housing as a platform to enable individuals with complex needs to move away from homelessness. Despite being knee deep in a leadership crisis, Housing Minister Kit Malthouse announced that £142m will be invested into infrastructure to help ‘deliver the homes the country needs’. With up to 8,500 properties promised, the results are hotly anticipated.
Propositions: In the propositions department we are growing closer to the delivery of smart property management devices which will allow landlords and property organisations to save energy by remotely managing their portfolio. We plan to deliver these products in the next few months and we are very excited about their potential to allow landlords to systemise their businesses and curb excessive energy usage. In our final round of testing we have confirmed their ability to reduce gas consumption in the home with minimal impact on the tenant experience. So far, our innovative products can: remotely monitor and control a property portfolio, limit excessive energy use by tenants and guests and automatically disable heating and hot water during non-occupancy periods.
Meet the team? – Isabella Lee
Meet marketing team member Isabella, our LinkedIn Ads aficionado and SEO expert (she gets keywords to the top of google quicker than you can say ‘what’s the WiFi passcode?’) : Here’s what she get’s up to when she’s not analysing data and testing campaigns. “I am a second year student at the University of York and have been working for Landlord Broadband alongside my Business Management degree. Other than social listening and utilising data insight platforms to make sure we have the best targeting I am also responsible for SEO (Search Engine Optimisation).
This September I am going on work placement, and will be working in digital marketing and strategy at British Airways. I’m really looking forward to being able to apply what I have learnt here to new larger projects, and extend my digital marketing knowledge. As well as studying for my degree, I am also President of the University of York’s Business Management and Accounting society, and work on my own e-commerce business. Studying, working, and socialising take up most of my time, but when it doesn’t, I love to cook and travel the world. I’ve just come back from Thailand where I have been remote working for LLB. The best of both worlds!
That’s it from us, we hope you enjoyed our newsletter,
(The champions of Wi-Fi friendly accommodation)
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Fun Fact: You are the Wi-Fi blocker! Water is a great signal blocker. Seeing as you’re made up of 75% water, if you’re sitting between your router and your computer, your body can significantly lower the strength of your WiFi signal!