Greetings Humans of Landlord Broadband,
Thank you for subscribing to our quarterly newsletter. We aim to keep you updated on what we have been getting up to, and what has been moving and shaking in our industry. Landlord Broadband hopes 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. Now adding to the effects of Brexit, the property market has fallen victim to the effects of the Coronavirus.
As reported by the National Law Review, the legalities in the real estate sector currently surround the tax landscape for international investors investing in the UK. Over the last few years, the UK tax rules for overseas investors in UK real estate have seen dramatic changes. In this GT Alert, we highlight some of the changes and some of the steps that may be considered to potentially mitigate their impact. What has become clear, is the importance of having the right structure in place to suit the particular investor(s). Now is the time to take action. Whether it be reviewing existing structures to make sure that they are still fit for purpose, considering whether pre-sale planning steps should be taken to minimise the potential for a price chip by a future buyer or considering the best structure to use for new investment. Read the full article here.
For some time, technology has played a major role in real estate, with various tools and tech platforms designed to streamline our business and make it easier for us and our clients. The coronavirus pandemic has changed life more than any of us could have predicted. Real estate professionals across the country are adjusting to a new way of doing business. Many have found the answer in technology. Unfortunately, it might be some time until real estate can operate as it once did. For many, learning and investing in technology is now the answer. RIS Media reported that Video, virtual tours and even virtual reality (VR) tools have been critical in the last few months for real estate pros who are unable to show a home in person. Agents can continue to work with their clients, show them listings and close deals, avoiding unnecessary exposure to others. This keeps both the agent and the client safe during the job. There are many different VR and 3D tour companies, which provide agents with the opportunity to show properties. These technologies also give clients the chance to purchase a home while respecting social distancing . Google Street View and Matterport are two excellent tools for the early stages of the buying or leasing process. The technology has quickly advanced to give clients an incredible experience while truly exploring a property from the safety of their own home. This technology was gaining momentum before the coronavirus pandemic, but it has now become a mainstay for the real estate transaction process. Read the full article here.
According to Appleby, landlords announcing rent collection results following the June quarter day have been taking over the financial news. This is not optimistic reading, with current data suggesting around 38% of commercial rents in the UK has been collected. Shopping centres and retail portfolios have been hit especially hard. In addition, a number of landlords will be at serious risk of breaching financial covenants in their debt facilities. It has already been announced by the UK government that the moratorium on rent enforcement mechanisms has been extended to 30 September 2020. This means that landlords are unable to take action to bring in new tenants whose business might be more profitable. With this moratorium now extending past the September quarter date, landlords may struggle to implement changes to increase rent collections for the remainder of the summer. Read the full article here.
What are we working on?
It has no doubt been trying times for all our customer sectors, however when looking on the situation in a positive light letting agents have simply adapted to a new style of working. Online viewings, originally thought to be temporary, are becoming a preference of many potential tenants. It is a method of property showing which is likely to continue after the pandemic. This helps to reduce agents time spent travelling back and forth to properties, as well as quickly funneling out tenants whose interest may be less serious. Another positive sign for the industry is that properties aren’t sitting on the market as long. There is no expectation that demand will slow down any time soon.
Landlords have been praised by many tenants throughout lockdown. Many reports have suggested the majority of tenants who had faced financial hardship and reached out to their landlords for a rent reduction have received positive responses. It’s also thought that rental debt is significantly lower than originally thought. But not for those landlords who are struggling with non-paying tenants. The eviction ban (introduced in March) is finally due to end on August 23rd. The government states that there will be no further extensions. Another development for landlords is that universal credit launched their online service for landlords to apply to receive direct rental payments from a tenant’s claim. This is particularly good peace of mind for landlords who have tenants who have perhaps fallen on hard times in the short term as a result of the pandemic.
The last quarter saw the serviced accommodation market giants (Airbnb and Booking.com) suffer globally from the effects of the Coronavirus. In May it was announced that Airbnb planned on making a quarter of their global workforce redundant. This not only includes the transportation and Airbnb studios. There is also the more niche section of Airbnb ‘upmarket’ hotels and Lux initiatives that will also face reduction. Airbnb plans to make redundancies in one of their most important headquarters, Dublin. There will be approximately 190 job cuts. The job cuts are due to Covid-19 and because of the plummeting stock prices. The company predicted an excess of $40bm in flotation due to the rental income from properties. This meant that staff were in a position to earn a potentially large bonus. However, due to the halt on travel, the company’s external income plummeted. Subsequently, their stock prices have seen a significant drop.
Throughout this unprecedented quarter, housing associations have had to adapt to how they operate. They have done this in order to support vulnerable people and ensure that residents can self-isolate. Despite financial impacts deriving from the government eviction-ban guidelines, housing associations continue to demonstrate benefaction. It has been great to see housing associations go the extra mile to ensure the safety and wellbeing of their tenants! A great example of this is the #MoreThanHomes Campaign. The national housing sectors foodbank initiative aims to raise £1 million for the Trussell Trust.
Amidst all the uncertainty within this quarter, one thing has become certain within the sector: the importance of digital inclusion. Access to the internet and digital technologies has proven paramount to keeping people connected throughout the COVID-19 lockdown. For further information on digital inclusion strategies for housing association landlords, we have published a news article. For further guidance, the National Housing Federation has released a collection of resources for housing associations in regard to responding to coronavirus.
In the last quarter, new developments were put on pause due to the outbreak of the coronavirus. The construction industry has been facing a booming start to the easing of lockdown rules. There are also questions surrounding the help-to-buy restrictions. People are wondering whether it will affect the price of new-build properties. The Guardian states that “Whether the regional price caps will make a difference to the price of new-build properties outside the help-to-buy scheme is anybody’s guess. But if developers are feeling squeezed by the limits on what they can charge first-time buyers, it may be that they seek to reconsider the prices of properties excluded from the new help-to-buy scheme. So, while the price of property suitable for first-time buyers may well come down in most of England, the cost of other new-build property may not, and it could even rise”.
Meet the team? – Milly Jackson
Meet business development and marketing team member Milly Jackson, our Housing Association aficionado and LinkedIn advertising expert. Here’s what she gets up to when she’s not teaching us new data about LinkedIn adverts. “Hi, I’m Milly, a penultimate year Business and Management student at the University of York. Alongside my studies, I work part-time within the marketing team at Landlord Broadband; I am responsible for managing marketing towards the Housing Associations customer market. Additionally, I have recently undertaken a Business Development role within the company, in which I manage and communicate with new enquirers to help them discover their optimum broadband solution. If not studying, marketing or supporting business development; you will find me cooking, baking and enjoying time with my family and friends!”
That’s it from us, we hope you enjoyed our newsletter,
(The champions of Wi-Fi friendly accommodation)
Fun Fact: The first Wi-Fi logo designed by Inter brand was based on the Chinese symbol of yin-yang. This refers to the existence of dual forces in harmony.