Welcome to our Summer Newsletter 2021!
This is Landlord Broadband’s quarterly newsletter, Summer 2021 edition. If you would like to know the latest industry news for our customer markets, then read on. If you missed our last newsletter, click here.
As we all know, the pandemic has interrupted the usual way of running businesses. The dependence on digital tools during the pandemic cannot be overstated. We have all relied on laptops, computers, mobile phones, remote networks and more to do our jobs. Without these, many of us may have had to put our health at risk or potentially face unemployment.
According to Property Week’s Power of Proptech survey, 79% of participants credited technology with helping to maintain productivity within businesses. In the same survey, 85% of companies stated that they are looking to invest in homeworking and digital meeting tools. (Property Week). Remote working could be the new normal.
The finance world has remained as busy as ever this quarter. Currently, at the forefront of news is the cladding crisis. Post-Grenfell, 2 million people have been unable to sell their homes. So far, the government has made £5.1bn available to fix cladding on high rise flats. Regardless, banks are being asked to help with mortgage lending in riskier buildings.
Overseas investors are now injecting funds into UK regional property. House prices outside of London have risen 8.9% in the past year. This is due to people exiting London in favour of more space. Investment is being heavily directed towards the PRS, including private housing and BTR developments for young professionals. The developer Beech Holdings, who started in the PBSA sector, expects a 25% increase in capital by 2025.
Buy-to-let landlords are now also looking outside of London for investment, as house prices rose 78% between 2007-2017. Focus is now shifting to more affordable areas, where prices are rising fast such as the North west and the Midlands. Now more than ever, affordability is a huge factor for renters, as rents remain lower in Northern counties.
There has been uproar within the property sector recently. Research has shown that some property legislation dates back to the 18th century. The NRLA stated that the sheer number of laws renders them unenforceable. (NRLA).
The new building safety bill (introduced 5th July) produces the biggest changes to building legislation in a generation. The bill appoints specific people responsibility for building safety during the design, construction and occupation of high-rise buildings. There are more measures in place to increase accountability around safety concerns and improve safety complaint procedures. They are also aiming to improve the culture around producing high-quality high-rise buildings. (Propertymark)
The stamp duty holiday also still applies to first homes up to £250,000, until 30th September 2021. This means that buyers can still benefit from reduced property prices. Also, first-time buyers will still benefit from stamp duty relief after 1st October. (Property Mark).
Our Customer Market Updates
Build to Rent
This quarter, the BTR (Build to Rent) sector appears stronger than ever. Almost 7,000 BTR planning schemes were approved in Q4 2020/2021, making this the strongest ever period for the sector. (Property Week). This has enticed many firms to invest, including the Australian Investment bank Macquarie. They plan to expand into the UK with a new vehicle named Goodstone Living. They will focus on long-term investment in urban areas to provide high-quality homes with a focus on promoting wellbeing. (Real Assets).
Retail giant, John Lewis, has also made its move into the build to rent market. They have plans to build around 10,000 rental homes across their property portfolio, ranging from studio flats to houses. All these developments will have concierge service and will be located near to a Waitrose convenience store. (Letting Agent Today).
Another household name that has also made moves to enter the BTR sector, is Lloyds bank. Their properties will be managed by its subsidiary, Citra Living. Tenants are expected to move into it’s first development, in Peterborough, this summer. (Letting Agent Today).
PBSA is also a sector that has sustained growth, despite the pandemic. According to an industry survey, PBSA occupancy rates are down from 89% to 83%. However, assuming that travel restrictions are eased, a return to full occupancy is expected. (Unite Group).
The property portfolio of Unite Students has increased in value to £2.8bn. This is up 1.4% from last quarter, with a reported occupancy rate of 80%. This is only going to grow with the increasing rates of students attending universities. (Business Live). Alongside this increase in demand, ESG has come to the forefront of the agenda. Unite have committed to using renewable wind power for 1/5th of their annual electricity needs for the next five years. This is to improve sustainability. (Unite Group).
Many PBSA providers are also shifting towards enhanced wellbeing models for tenants. Due to the increase in social isolation, additional support is necessary to help students meet social and wellbeing needs. Especially those who are moving away from home for the first time. (Property Reporter).
Over the past decade, letting laws have increased by 40%. Subsequently, 1 in 5 BTL landlords are planning to leave the sector or sell part of their portfolio. (Landlord Zone). Despite their exit from the market, tenant satisfaction remains high. 83% of renters reported being satisfied with their current accommodation. Satisfaction levels are higher amongst renters that deal directly with landlords rather than intermediaries. (NRLA).
As COVID restrictions ease, more tenants are expected to move house. This has resulted in most areas in the UK experiencing a drop in void periods. This is alongside an increase in the average rent, which is up 8% since May. This activity is good news for landlords and letting agents, as they prepare for heightened levels of activity in the market. (Landlord Today).
Pets have also been a hot topic within the PRS, as this may increase applicants and decrease void periods. Tenants with pets are also more likely to treat the property as a home, and become long term tenants. The Government’s model tenancy agreement states that well-behaved pets which are owned responsibly should be allowed in rental properties. (Landlord Today).
Due to the recent travel bans, national travel is increasingly popular. This has led to the serviced apartment sector to faring well during the pandemic. As restrictions have slowly lifted, the sector has continued to thrive.
However, the prosperity of the serviced apartment sector has not benefited everyone. The rise of second homes has heavily impacted the housing crisis in Wales. Furthermore, there are concerns over the potential loss of the Welsh language due to increased tourism.
The Welsh government released a statement on how they will approach the issue. Their plan includes:
- addressing housing affordability and availability,
- putting a statutory registration scheme in place for holiday accommodation; and
- using national and local taxation laws to ensure second homeowners contribute to the affected community.
Furthermore, the Welsh government will publish a consultancy piece called the Welsh Language Community Housing Plan. This will discuss how to protect the Welsh language within communities. (Gov.Wales).
There’s around 25,000 second homes in Scotland. As a result, many Highlanders have been unable to purchase their first homes. Empty and rented second homes have prevented locals from being able to live in areas close to where they work. (The National).
In response, the Scottish government have released a consultation paper for the potential licensing order for short term lets. (Gov.Scot)
The pandemic has heavily impacted the UK housing sector in many ways. COVID-19 has magnified the needs of the vulnerable in society. This has resulted in governments and councils scrambling to increase housing and funding options.
Scotland released Homeless Statistics 2020-21, which shows that applications for homelessness applications for assistance fell almost 10% from the previous year. Furthermore, as of March 2021 there are 13,097 households in temporary accommodation. (Gov.Scot).
In England, the amount of supported housing needed has increased dramatically due to COVID. Despite the government’s best efforts, homelessness has continued to rise in England. The number of rough sleepers in London has reached an all-time high. (My London).
Unfortunately, the increase of supported housing was not viewed favourably in some communities. Some communities have gone so far as to request no more supported housing in saturated areas, such as Birmingham. (Birmingham Mail).
Regardless, the supported housing pilots (announced in May) have been extended for another 6 months in Hull, Birmingham, Blackpool and Blackburn. In addition, due to the extension, the pilots were given an extra £2.3 million in funding. (Gov.UK).
Meet the Team
Meet Landlord Broadband’s Marketing Team Leader, Lauren. “Hi, I’m Lauren, I’ve been with Landlord Broadband since Autumn 2019 and have worked alongside a BSc Marketing Degree at the University of York. I’m currently managing the Build To Rent, PBSA and HMO Landlords sectors, alongside marketing strategy and planning- and I’m loving watching sectors change and develop. When I’m not working or studying, I run an Instagram wine blog and am learning more about the wine and spirits industry by the day! Aside from this, I love to go on long hikes in the countryside and train at the gym- I love to stay active.”
Here is a little Wi-Fi joke for you: I changed my Wi-Fi password to MilkyTea, but apparently that’s too weak.
Thank you for reading our Summer Newsletter 2021 edition.
If you would like to know how Landlord Broadband can help you, email us at email@example.com, call 0333 577 0600 or fill out our free assessment form.