Category: TimeLine

London Landlords Look Set To Lose £65M A Month Because Of Covid-19

London Landlords Look Set To Lose £65M A Month Because Of Covid-19

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The ongoing pandemic is causing travel restrictions and broader health implications for universities. In fact, it’s predicted that the number of students heading to London this term will drop by as much as -24%.

That’s a loss of over £65m a month for the London student rental sector.

London lettings and estate agent, Benham and Reeves, has revealed the best boroughs for student rental demand, despite predictions of a rental market decline due to a lower level of students heading to the capital.

London’s higher education providers accommodate 16% of the UK’s university students each year, and as many as 32% of the capital’s students come from overseas.

The average London student pays £702 a month in rent, meaning those on a three-year course will pay out £8,424 a year, totalling more than £25,000 throughout their course.

This means the capital’s student body brings in nearly £271m to London’s rental market in rent each month, with international students accounting for £85.6m of it.

However, despite this prediction, many areas of London are still experiencing extremely high levels of demand for student accommodation, something that will be welcome news to student landlords across the capital.

According to the research by Benham and Reeves, the number of student-specific rental properties that have already been snapped up by students sits at 22% of all student-specific properties listed on the rental market.

In Merton, for example, this ratio is far higher, with 80% of all student accommodation already let agreed.

Bromley (75%), Bexley (61%), Barking and Dagenham (60%), Hounslow (53%), Harrow (53%) and Redbridge (50%) are also seeing high levels of current student demand for rental properties.

Even in more expensive markets such as Hammersmith and Fulham, Islington and Camden, student rental demand is sitting at 19% to 25%.

Marc von Grundherr, Director of Benham and Reeves, commented:

“There is currently an evident decline in the level of rental demand from students than we might otherwise expect at this time of year. This has, of course, been driven by a lower number of international students looking for properties due to the travel restrictions and other hurdles that the current pandemic has presented.

“However, while predictions of student rental market losses are rather eye-watering, to say the least, we don’t believe this will be an issue that plagues the market for long.

“Many current students are beginning their studies in a virtual capacity until such time they can make a move to London, and once they do, we should see a further influx of demand for suitable student lets.

“University is very much about the life experience you gain from actually moving to a new city or country. With London still offering some of the best standards of higher education you can find worldwide it’s unlikely students will refrain from this first-hand experience unless absolutely necessary.

“Like many areas of life this year, we may see a slow start to the university year. But as life develops to deal with COVID-19, greater degrees of normality will prevail, and this is no different in the rental market student or otherwise.

“The very promising signs are that currently, many boroughs are experiencing massive demand for student rental properties, and this bodes very well for the academic year ahead. Foreign student demand, in particular, can bring very favourable levels of rent for buy-to-let landlords. We regularly have students from China and other areas of Asia renting at well above the average in their chosen areas to ensure they secure the best property they can while studying.”

The average London student pays £702 a month in rent, meaning those on a three-year course will pay out £8,424 a year, totalling more than £25,000 throughout their course.

This means the capital’s student body brings in nearly £271m to London’s rental market in rent each month, with international students accounting for £85.6m of it.

However, despite this prediction, many areas of London are still experiencing extremely high levels of demand for student accommodation, something that will be welcome news to student landlords across the capital.

According to the research by Benham and Reeves, the number of student-specific rental properties that have already been snapped up by students sits at 22% of all student-specific properties listed on the rental market.

In Merton, for example, this ratio is far higher, with 80% of all student accommodation already let agreed.

Bromley (75%), Bexley (61%), Barking and Dagenham (60%), Hounslow (53%), Harrow (53%) and Redbridge (50%) are also seeing high levels of current student demand for rental properties.

Even in more expensive markets such as Hammersmith and Fulham, Islington and Camden, student rental demand is sitting at 19% to 25%.

Marc von Grundherr, Director of Benham and Reeves, commented:

“There is currently an evident decline in the level of rental demand from students than we might otherwise expect at this time of year. This has, of course, been driven by a lower number of international students looking for properties due to the travel restrictions and other hurdles that the current pandemic has presented.

“However, while predictions of student rental market losses are rather eye-watering, to say the least, we don’t believe this will be an issue that plagues the market for long.

“Many current students are beginning their studies in a virtual capacity until such time they can make a move to London, and once they do, we should see a further influx of demand for suitable student lets.

“University is very much about the life experience you gain from actually moving to a new city or country. With London still offering some of the best standards of higher education you can find worldwide it’s unlikely students will refrain from this first-hand experience unless absolutely necessary.

“Like many areas of life this year, we may see a slow start to the university year. But as life develops to deal with COVID-19, greater degrees of normality will prevail, and this is no different in the rental market student or otherwise.

“The very promising signs are that currently, many boroughs are experiencing massive demand for student rental properties, and this bodes very well for the academic year ahead. Foreign student demand, in particular, can bring very favourable levels of rent for buy-to-let landlords. We regularly have students from China and other areas of Asia renting at well above the average in their chosen areas to ensure they secure the best property they can while studying.”

JULY: Safety Checks On Electrical Appliances Become Mandatory

JULY: Safety Checks On Electrical Appliances Become Mandatory

Landlords are already required to make sure that the wiring and appliances in their properties are safe, but from July it will be a legal requirement for private landlords to have their electrical installations inspected every five years and provide safety certificates to tenants and their local authority.

The regulations will apply to all new tenancies from 1 July 2020 and existing tenancies from 1 April 2021.  If serious problems are identified, these will have to be remedied quickly. Local authorities will have a duty to take action if landlords do not comply with the requirements and will be able to issue fines if necessary.

JUNE: Tenant Fees Acts (EXTENTION)

JUNE: Tenant Fees Acts (EXTENTION)

The Tenant Fees Act 2019 came into force in England last year on 1 June 2019. The Act bans landlords and agents from charging fees to tenants other than those expressly permitted by the Act. It also places a cap on the amount of security deposit a landlord or agent can collect and codifies a procedure for dealing with holding deposits. The ban applies to assured shorthold tenancies granted by private landlords, licence agreements and tenancies of student accommodation (referred to collectively as “tenancies” for the purposes of the Act).

Since 1 June 2019 the Act has applied to all new agreements actively granted on or after this date including renewal agreements. In accordance with the Act’s transitional provisions, the ban has not applied to tenancies entered into before 1 June 2019 or to statutory periodic tenancies that arose at the end of fixed-term ASTs that commenced before 1 June 2019. The transitional period has now come to an end and from 1 June 2020 the Act applies to all relevant tenancies in existence. However, there will still be some differences in how the various rules apply depending on when the tenancy was granted and when the payment was taken.

This is part 1 of a 3-part series exploring how the TFA provisions will apply to tenancies from 1 June 2020. This blogpost will explore how the prohibited payment provisions work and why compliance is important.The second blogpost will look at tenancy deposits and how the cap applies to different tenancies. The final blogpost will examine the holding deposit provisions.

How does the TFA apply from 1 June 2020?

The various scenarios are set out below:

New tenancy granted on or after 1 June 2019 including first tenancies and renewal tenancies

As is the case now, the Act applies so no prohibited payment can be taken. Any term in the agreement that requires a prohibited payment is not binding. This applies equally to the first tenancies and renewal tenancies. This is the most straightforward scenario as no payment taken in connection with that new tenancy will be lawful if it is not a permitted payment under the Act. Requesting a prohibited payment will be a breach of the Act.

Statutory Periodic Tenancy that arose before, on or after 1 June 2019

The Act will now apply to these tenancies as the transitional provisions have come to an end. Any term in the agreement that requires a prohibited payment ceases to be binding on the tenant from 1 June 2020. If a landlord/agent accepts a payment by mistake they have 28 days to return it to the tenant otherwise it is a prohibited payment and they will be in breach of the Act.  However, any payment taken before this date (i.e. up to 31 May 2020) will still be lawful as it will have been taken during the transitional period when the TFA restrictions did not apply.

With these tenancies that span the transitional period some payments may have been taken lawfully while later payments may not be lawful. For example, reference fees and inventory fees may have been taken lawfully at the commencement of a tenancy and default fees collected lawfully throughout the tenancy. However, a check-out fee due to be charged at the end of the tenancy will be unlawful if taken on or after 1 June 2020. Difficulties may arise if payments were taken from tenants ‘on account’ at the start of their tenancies when the fee was still allowed but the charge is only actually incurred at the end of the tenancy, for example, to cover a check-out inspection. That fee is likely to be prohibited even if collected before the ban applied and the money should be returned to the tenant.

Tenancies granted before 1 June 2019 including contractual periodic tenancies and tenancies still within their original fixed term

The Act will also now apply to these tenancies as the transitional provisions have come to an end. There is no exemption for tenancies that have a longer fixed-term period or have been contractual periodic tenancies from the outset. The ban applies retrospectively to these tenancies. Again, from 1 June 2020 any term in the tenancy requiring such a payment will cease to have effect and if a payment is accepted it must be returned within 28 days of receipt otherwise it is a prohibited payment and the landlord or agent will be in breach of the Act.

Why is this important? What are the sanctions for non-compliance?

Compliance with the TFA is important because there are serious consequences for breaching the Act. Local authorities and the lead enforcement authority can issue penalties of up to £5000 for each breach of the Act and repeated non-compliance can result in prosecution or a financial penalty of up to £30,000, banning orders and an entry on the Rogue Landlord Database and/or the Mayor of London’s Rogue Landlord Checker. Tenants can also bring claims against the landlord to recover fees charged unlawfully. You can read more about enforcement of the Act here.

One of the biggest deterrents to non-compliance is the restriction on recovering possession from assured shorthold tenants. A landlord in breach of the Act is not able to serve a valid section 21 notice until any prohibited fee has been returned to the tenant or, with the tenant’s consent, credited to their rent account or deposit (if that does not take the deposit above the cap).

Tenant advisers will have updated their section 21 checklists to check compliance with Act and the Court’s N5B Claim Form for seeking possession using the accelerated procedure has now been amended to include a number of questions relating to the Act. There is no doubt that tenant representatives will be analysing payments carefully to check that any fee taken was permitted. If it was not this could provide the tenant with a complete defence to a section 21 possession claim. However, as illustrated above, this will not always be straightforward and will involve checking when the tenancy was granted, the date when the payment was taken (and potentially when the charge was actually incurred) and, if applicable, the date the payment was repaid to the tenant. Some fees will have been taken lawfully at the time, even if they are now prohibited. Landlords/agents and their advisers will also need to ensure that they have scrutinised any payments so that they can demonstrate compliance and, if necessary any prohibited payments are repaid prior to serving a section 21 notice.

More Links, Content, Supporting Documentation & Solutions To Follow October 2020. TLA.

Coronavirus Act 2020 – How It Effects Landlords & Tenants

This note sets out how the Coronavirus Act 2020 (“the Act”) affects both business and residential tenancies taking into account the Governmental advisory guidance to help understand the implications of the Act.

As the situation is subject to change, the Government urges all landlords and tenants to abide by the latest Government guidance on COVID-19, which can be found here.

Business Tenancies

Landlords cannot evict business tenants on the grounds of non-payment of rent whilst the Coronavirus emergency continues. This currently applies from 26 March to 30 June 2020 (“the relevant period”) unless subsequently extended.

Forfeiture for non-payment of rent

During the relevant period the landlord cannot enforce a right of re-entry for non-payment of rent (the definition of rent includes service charge and insurance premium), whether by peaceable re-entry or in court proceedings. To protect the landlord’s position, the right of re-entry can only be waived during the relevant period by an express waiver in writing. These provisions do not apply to any other type of breach of covenant.

Where forfeiture proceedings for non-payment of rent are already on foot, the court cannot make an order for possession which expires before the end of the relevant period. In some cases the court will have made an order for possession which only takes effect if the tenant fails to do something (e.g. pay the arrears or instalments) by a certain date. In the High Court, if the tenant applies to vary the order the court must ensure that the tenant does not have to give possession before the end of the relevant period. In the County Court, the period during which the tenant has to pay cannot be before the last day of the relevant period (as in force at the date of the order). For existing orders, the period within which the tenant must pay the arrears is automatically extended to the end of the relevant period.

Opposing the grant of a new tenancy on the grounds of persistent delay in paying rent

Where a landlord opposes the grant of a new tenancy on the ground of persistent delay in paying rent, any failure to pay rent during the relevant period is to be disregarded.

Residential Tenancies

The Government has brought in several restrictions in relation to residential possession. Firstly, the Act lengthens the notice period required during the relevant period. For residential tenancies, the “relevant period” set out in the Act is from 26 March to 30 September 2020; unless subsequently extended.

Section 8 Notices

Possession proceedings under section 8 of the Housing Act 1988 have always required the service of a notice of intention to bring proceedings for possession. The minimum period of the notice depended on the particular ground for possession relied on – from immediately, in the case of an occupier who has committed an indictable offence, to two months in the case of a former owner-occupier who wants his home back. During the relevant period, all notice periods are extended to three months. The court retains its power to dispense with service of a notice or to abridge the time.

Section 21 Notices

The Act extends the minimum notice period under section 21 of the Housing Act 1988 (no fault eviction) from two months to three months.

Other Private Sector Tenancies

No amendments have been made to the law affecting private sector tenancies which do not fall within the Rent Acts or the Housing Act – essentially tenancies at a very low rent (less than £1,000 pa in Greater London, £250 elsewhere) or a very high rent (in excess of £100,000 pa).

Possession claims suspended

From 27 March 2020 for a period of 90 days (i.e. up to 25 June 2020) there is a suspension of housing possession cases in the Court. This affects new or existing claims, so effectively they cannot be progressed during this period. This is in line with current public health advice to stop all non-essential movement. The Government’s strong advice to landlords is not to commence new notices seeking possession during the current time without a “very good reason” for doing so.

Maintenance and safety

Landlords should still carry out essential and urgent work to ensure that rented properties are safe. Examples given in the Governmental guidance include testing the fire alarm, roof repairs where there is a leak, boiler and plumbing repairs, broken white goods and security problems e.g. a broken window or door. Landlords should take a “pragmatic, common sense approach” to resolving issues. Where COVID-19 restrictions prevent landlords from meeting routine obligations they should not be unfairly penalised. However, the guidance specifically refers to landlords making every effort to abide by existing gas safety and electrical safety regulations (the latter comes into effect for new tenancies from 1 July 2020). Landlords must demonstrate that they have taken all reasonable steps to comply with the law. If landlords are not able to engage a contractor or gain access to the property due to COVID-19 restrictions they should document their attempts and any responses. The relevant legislation already contains provisions where the landlord will not have breached his duty if he has taken all reasonable steps.

General governmental guidance

The general message is that the landlord and tenant relationship should continue as normal as far as is possible i.e. the tenant should continue to pay rent and adhere to all other terms in the tenancy agreement. Landlords should continue to comply with their obligations as well. Where the tenant is unable to pay rent due to Coronavirus related difficulties, the tenant should speak to their landlord at the earliest opportunity. Landlords are requested to be flexible and offer support and understanding to their tenants as part of the national effort during this national emergency. Both parties are encouraged to agree a sensible way forward including for example, to agree a lower rent and a payment plan going forward.

Where there are financial difficulties for the landlord where the tenant is not able to pay rent due to Coronavirus related difficulties, mortgage lenders have agreed to offer payment holidays of up to three months including for buy-to-let mortgages.

The future

There may well be further changes depending on how the situation develops. The Government has the power to alter the notice period required by substituting a period of up to six months. They may well also extend the suspension period on possession claims.

Rent and coronavirus: What comes next for UK landlords and tenants affected by Covid-19?

The coronavirus crisis is now fast-approaching its fourth month and we’re only just starting to see the economic impact. The spectre of a severe recession, the likes of which, in the words of Chancellor Rishi Sunak, “we have not seen” looms large. His words are unambiguous: we are awaiting the biggest economic shock in recent history.

There is rightful concern from one demographic in particular: private renters. This is a group thought to contain about 20 million people who rely on private landlords to keep a roof over their heads. It has grown rapidly over the last decade or so because getting on the housing ladder has become increasingly unaffordable while social housing has been in increasingly short supply.

This pandemic has exposed the precariousness of Britain’s private rented sector for what it is: a national emergency. Before Covid-19 disrupted life as we knew it, renters were already worse off than homeowners, spending a higher proportion of their earnings on housing. Sixty three per cent of them had no savings and almost half of working renters were just one paycheck away from losing their home. Think of them as the “squeezed middle” Ed Miliband once tried to champion – they were already stretching themselves to cover the most essential cost of all: housing.

The Government clocked this would be a huge problem early on. In late March, they announced a three-month suspension of evictions and the restoration of Local Housing Allowance to the lowest third of market rents which renters could access by applying for Universal Credit. These measures went hand in hand with the Job Retention Scheme which, they hoped, would tide anyone whose job was at risk over.

Now, as furloughs are extended, business closures are prolonged and redundancies registered, the housing charity Shelter estimates that around 1.7 million renters expect to lose their job. Early tremors revealed by the latest Office for National Statistics employment data – a 69 per cent increase in people applying to Universal Credit – point to a storm ahead. Citizens Advice estimates that 2.6m renters are behind on rent or expect to be as a result of this pandemic.

As we approach the end of that three-month period, questions are being asked about what the plan is for renters now. Will the evictions suspension be extended or will we, as the London Councils Group has warned, see an “avalanche” of them when it is lifted? Will the increase to Local Housing Allowance continue?

Left-leaning social media accounts are awash with calls for a “rent strike”. Labour’s shadow housing secretary, Thangam Debbonaire, has published a five-point plan for renters which includes protecting them from bankruptcy as a result of any rent arrears. Meanwhile, Housing Secretary Robert Jenrick has said the Government is still “thinking carefully” about what to do next and “developing a much more credible plan to protect renters and to help to shield them through this crisis.”

So where does that leave private renters who are, completely understandably, very worried?

What could happen with evictions and rent arrears?

As things stand, all evictions proceedings are suspended. This was initially done for a 90-day period and takes us up until the end of June. Last week Jenrick told Parliament a decision would be made on the future of the ban shortly before then. One of the suggestions in Labour’s five-point plan is extending it for six months.

Giles Peaker, an expert housing solicitor and partner at Anthony Gold explains: “The Government has increased the periods for notices seeking possession, and the courts have currently put all possession claims on hold until 25 June. But unless this is extended, or other measures are brought in by the Government, there is a real risk that people will face possession claims for rent arrears in a month or two, or possession claims after a section 21 notice. Tenants (and their guarantors) may also face money claims for arrears.”

One of the issues on the horizon, he adds, is that legally, as things stand, having been impacted by the crisis is not a defence for not paying rent for anyone challenging an eviction order in court.

It’s worth noting that, before Covid-19 took over every aspect of public life, we were expecting legislation to ban Section 21 evictions (also known as unfair or revenge evictions). It’s likely this will return to Parliament at some point. However, as Peaker notes, this wouldn’t protect those who haven’t been able to pay their rent.

What help can I get with rent because of coronavirus?

Back in March the Government announced that landlords could take a “mortgage holiday” if their tenants were unable to pay rent and encouraged them to be “compassionate” in such situations. Some didn’t feel this went far enough.

The Government also increased Local Housing Allowance (LHA) so that it covers the lowest third of market rents. This can be accessed by renters who find themselves unemployed because of this crisis via Universal Credit. However, not everyone will be eligible for this.

There is good news, though. When asked by i whether this change to LHA was permanent a spokesperson for the Treasury said: “This will apply for the 2020-21 financial year. There are no plans to reverse the increase.”

However, rents fluctuate. So, while the increase to LHA may be here to stay for now, if we saw rents rise, this wouldn’t stay in line with them and would continue to only cover the lowest third of market rents.

What ideas are being proposed to help renters pay their rent?

Labour’s plan to help renters was criticised by some because it proposed giving those who fall behind on rent a two-year period to pay back rent arrears which would leave them indebted to their landlord.

In Spain, a low-interest loan system has been introduced to help renters honour their payments. When Labour MP Clive Betts asked Jenrick if we would consider something similar, he didn’t dismiss the idea.

However, this would likely attract similar criticism to that thrown at Labour’s plan. Renters are already worse off than homeowners and saddling them with debt during an economic crisis will undoubtedly harm their prospects moving forward.

Caitlin Wilkinson, Policy Manager at Generation Rent, tells i that the rent strike being encouraged on social media by some is not the answer. “Suspending rents temporarily could put renters at risk of debt once the freeze is lifted,” she explains. “If we had a functional welfare system this wouldn’t be an issue, so fixing that should be our priority. Generation Rent is calling on the Government to remove the benefit caps, increase local housing allowance, and expand eligibility.”

So, what’s the alternative? Increasing the generosity of the housing benefits would be one place to start – this is something the Joseph Rowntree Foundation has already called for. JRF told i in April that the current increase to covering the lowest third of market rents just doesn’t go far enough and won’t break the fall of those who were already over-stretched. Shelter is calling for it to be increased further so that it covers “average rents” in any given area.

It’s really important that the Government comes up with an adequate plan to support renters who suffer financially in the coming months. As Peaker warns, a tenant not paying rent, regardless of the reason, could have serious implications. A tenancy agreement is a legal contract which means that “tenants are still obliged under their tenancy agreement to pay the rent, no matter what has changed in their circumstances.”

The Government, Peaker notes, have so far stopped short of telling landlords what to do. “While some landlords have agreed to waive rent, or reduce it, or for repayment plans in the future, there is currently no obligation on them to do this.”

Because so many people now rely on the private rented sector, an increase in the benefits available to renters is, in effect, going to result in a mammoth public bailout of private landlords on a scale never seen before. Building the social housing we’ve lost through Right to Buy is an obvious way out of this long-term but, in the short-term, renters can be reassured that the Local Housing Allowance increase isn’t going anywhere and wait for the Government’s next announcement.

Government announces mass testing plan for Covid-19 ‘Exit Strategy’

Ministers have finally revealed a long-demanded “exit strategy” from the coronavirus lockdown with a plan to recruit an army of 18,000 people to trace and isolate infected people – allowing restrictions to be eased, they hope.

Five weeks after the World Health Organisation urged all nations to “test, test, test” – a plea rejected by the UK at the time – it was announced that the mass contact tracing programme would begin “in a matter of weeks”.

Ministers have finally revealed a long-demanded “exit strategy” from the coronavirus lockdown with a plan to recruit an army of 18,000 people to trace and isolate infected people – allowing restrictions to be eased, they hope.

Five weeks after the World Health Organisation urged all nations to “test, test, test” – a plea rejected by the UK at the time – it was announced that the mass contact tracing programme would begin “in a matter of weeks”.

The move was greeted with relief by Jeremy Hunt, the former health secretary and a leading voice demanding mass testing in the community, rather than simply in hospitals and of NHS and care workers.

* Essential workers, including supermarket workers, bus drivers and teachers, and their household members were told that, from tomorrow, they will be able book a test on the gov.uk website – potentially benefiting 10 million staff if the rest of the UK follows England.

* Continuing problems with the current testing programme were laid bare – with only 23,560 carried out on Wednesday, less than half the capacity of 51,000.

* London was described as “two or three weeks” ahead of other parts of the country – with Manchester and Liverpool now the focus of the pandemic, according to a Health Service Journal analysis.

* “New and better” blood tests were promised – not requiring the chemical reagents that have been in short supply.

He sought to deflect criticism of delay, arguing he had had to wait until the pandemic had peaked, saying: “Critically, test, track and trace works more effectively when the rate of new cases is lower.

“So, the lower the rate of new cases, the more effectively you can keep it down using test, track and trace rather than having to use heavier social-distancing measures.”

Jonathan Ashworth, Labour’s shadow health secretary, criticised “confusion” at the heart of government, pointing out the deputy chief medical officer, Jenny Harries, had dismissed the idea only days ago.

And he said Mr Hancock had to be held to his original pledge, saying: “We were promised 100,000 tests a day by the end of the month. Not testing capacity at 100,000.

“We’re still not carrying out the numbers of tests we need to. In particular we should be doing so much more to test care workers. They shouldn’t have to travel miles for a test.

Property market open after lockdown measures lifted

As of today (Wednesday 13th May 2020) the property market has been given the green light to open for business again by the government. This means buyers and sellers are able to move home now which is important for those who are already in the process of either selling or buying.

Viewings are allowed to take place again as long as they are conducted in a safe manner and keeping to the social distancing 2m rule.

For those who wish to sell their property you are now oermitted to visit your property for valuation and marketing, whilst doing so keeping to the social distancing 2m rule. There are further safety measures such as gloves, masks and hand sanitiser that should be worn by all visiting parties.

Covid-19: TLA House Price Forecast

Property prices are being forecast to drop by a whopping 10 per cent during 2020 owing to the coronavirus lockdown – with a majority of that forecasted decline already happening over the past 8 weeks.

Property Prices are preedicted to have fallen by around 6 per cent since the beginning of the coronavirus crisis as the market came to a sudden stop.

Since the Government announcement that Britain will fully exit lockdown only by the end of July at the earliest, TLA now expects a much bigger drop than those waving ‘the recovery flags’ in order to bring about some calm in the wake of a economic sledge-hammer blow across the market.

The TLA is now forecasting a 9% overall decrease, compared with a previous 4 per cent fall, and a 5 per cent fall in prime London locations.

Since Sunday night it’s become clearer that some lockdown measures will remain in place into July and that social distancing rules governing day-to-day life, including property transactions, may remain in place beyond that.

If we allow for the fact that some asking prices have come down since March, then we might conclude that prices are off by at least 5 per cent already since the beginning of the crisis.

Five per cent seems like a reasonable starting point, and it is increasingly clear that prime London’s five-year decline doesn’t means it is immune from price falls.

‘We do not expect prices to keep falling at the same speed as they have in the past couple of months’ said TLA Chairman, Mr D T Evans.

‘The key question is will vendors accept discounts of more than 5 per cent? Some will, but there is growing evidence from the widening spread between average offers and the offers that are being accepted that many simply won’t.

If the lockdown is indeed lifted in July and the housing market can begin to function again, with people being allowed to view properties, then downward pressure on prices ‘should be limited’.

And in prime London locations, it’s possible to see prices pick up again in the second half of the year.

Our forecast is slightly higher than most of other major bodies with Savills alighning figures with the TLA with predicted falls between 5 per cent to 10 per cent this year amid thin sales.

Similarly, Lloyds revealed in its quarterly results that has a base case scenario prediction that house prices will fall 5 per cent this year.

It said that property prices would then rise 2 per cent next year and be down 0.7 per cent between 2020 and 2022.

The Bank of England, however, has forecast a bigger slump as it said it expects house prices to fall 16 per cent due to the coronavirus crisis and lockdown, before gradually recovering as economic activity picks up.

The BoE said prices would be pushed lower by rising unemployment, but propped up in part by ‘persistently’ low mortgage rates.

The latest monthly data by Halifax for April shows house prices were still 2.7 per cent higher compared to the same time last year despite the coronavirus outbreak.

However, property values were down by 0.6 per cent in April compared to in March, the biggest monthly fall in two years, according to the lending giant.

Government support available for landlords and renters reflecting the current coronavirus (COVID-19) outbreak

The government has brought forward a package of measures to protect renters affected by coronavirus (COVID-19). With these in force, no renter in either social or private accommodation will be forced out of their home.

To ensure all renters are clear on the full package of support that is currently available to them, we are bringing this together into one place.

From today (26 March 2020) landlords will have to give all renters 3 months’ notice if they intend to seek possession (i.e. serve notice that they want to end the tenancy) – this means the landlord can’t apply to start the court process until after this period.

This extended buffer period will apply in law until 30 September 2020 and both the end point, and the 3 month notice period can be extended if needed.

This protection covers most tenants in the private and social rented sectors in England and Wales, and all grounds of evictions. This includes possession of tenancies in the Rent Act 1977, the Housing Act 1985, the Housing Act 1996 and the Housing Act 1988. After 3 months if the tenant has not moved a landlord needs to apply to court in order to proceed.

From tomorrow (27 March 2020) following a decision by the Master of the Rolls with the Lord Chancellor’s agreement the court service will suspend all ongoing housing possession action – this means that neither cases currently in the system or any about to go in to it can progress to the stage where someone could be evicted.

This suspension of housing possessions action will initially last for 90 days, but this can be extended if needed. This measure will protect all private and social renters, as well as those with mortgages and those with licenses covered by the Protection from Eviction Act 1977. This will apply to both England and Wales.

Tenants are still liable for their rent and should pay this as usual. If they face financial hardship and struggle to pay this, support is available. In the first instance they should speak to their landlord if they think they will have difficulty meeting a rental payment, and in this unique context we would encourage tenants and landlords to work together to put in place a rent payment scheme. However we have also put specific measures in place:

  • We are working with the Master of Rolls to strengthen the pre-action protocol requirement and also extend this to the private rented sector. This will help landlords and tenants to agree reasonable repayment plans where rent arrears may have arisen.
  • We have already made £500 million available to fund households experiencing financial hardship.
  • As part of the workers’ support package, the Chancellor announced the government will pay up to 80% of a worker’s wages, up to a total of £2,500 per month, where workers are placed on the Coronavirus Job Retention Scheme.
  • Both Universal Credit and Housing Benefit will increase and from April, Local Housing Allowance rates will pay for at least 30% of market rents in each area.

The government is also committed to supporting landlords, and maintaining the positive partnership between tenants and their landlords. That is why, in addition to the measures outlined above, we have also agreed with lenders that they will ensure support is available where it is needed for landlords. Landlords will also be protected by a 3 month mortgage payment holiday where they have a Buy to Let mortgages.

Landlords remain legally obligated to ensure properties meet the required standard – urgent, essential health and safety repairs should be made.

An agreement for non-urgent repairs to be done later should be made between tenants and landlords. Local authorities are also encouraged to take a pragmatic, risk-based approach to enforcement.

COVID-19 and renting: guidance for landlords, tenants and local authorities

Non-statutory guidance for landlords, tenants and local authorities in the private and social rented sectors in the context of Coronavirus (COVID-19).

Consolidated_Landlord_and_Tenant_Guidance_COVID_and_the_PRS_v4.2

Details

This guidance provides advice to landlords and tenants on the provisions in the Coronavirus Act 2020, and further advice for landlords, tenants and local authorities more broadly about their rights and responsibilities during the COVID-19 outbreak.

 

The 2019-20 TLA Landlord Survey (TLALS)

The 2019-20 TLA Landlord Survey (TLALS)

Introduction and main findings

  1. The 2019-20 TLA Landlord Survey (TLALS) is a survey of landlords and letting agents who own and/or manage privately rented properties in England.
  2. The aim of the TLALS is to provide understanding of the characteristics and experiences of landlords and how they acquire, let, manage and maintain privately rented accommodation.
  3. Since 2010, the private rented sector has undergone substantial growth and change. The number of households in the sector rose by 25% between 2010-11 and 2018-19, from 3.6 million to 5.5 million households.
  4. The private rented sector is now the second largest tenure in England, and is home to over a fifth of all households.
  5. The private rented sector is characterised by diversity, containing a wide range of different sub-markets, serving a wide range of different types of households across all incomes, including an increasing number of families.
  6. In 2019, 46% of households in the private rented sector included dependent children (2.6 million households, up from 1.1 million in 2010-11).
  7. There are high rates of turnover in the private rented sector, with the number of house moves significantly higher than in the owner occupied and social rented sectors, both within the sector and between it and the other sectors.
  8. Since 2010, there have also been a number of policy changes affecting private landlords. These include tax changes for Buy to Let landlords, changes to the Stamp Duty Land Tax, tightening lending criteria on Buy to Let mortgages and the growing role of the Build to Rent sector.

These changes were made as part of the government’s wider efforts to make the housing market work for everyone and to ensure the housing market delivers the homes the nation needs.

The survey involved agents who let and / or manage property on behalf of landlords. For brevity, the term ‘agent’ is used throughout the report to describe agents who let and / or manage properties.

This report provides an overview of the private landlord population in England.

The first chapter covers the characteristics of landlords, why and how they became a landlord and how they view their current role.

We also include an overview of private rented dwellings and the households living in them, including the types and location of rented homes and the types of tenants. It also explores how landlords and agents set rents and the circumstances around how tenancies end.

Our survey examines landlord and agent attitudes, including the willingness of landlords and agents to let to different types of tenants and views on longer tenancies. It also presents findings on landlord and agent compliance with current legal requirements.

Other chapters provide evidence regarding the likely future of the private rented sector by setting out findings about landlords’ stated future plans, attitudes towards landlord insurance, boiler care issues and other landlord trends and habits – both past, present and in the future.

Full details of the survey sampling, weighting and reporting conventions are in the technical notes at the end of this report.

Briefly, the TLALS is an online survey of almost 8,000 landlord members of The Landlord Association and 550 lettings agents – all of whom are registered with The Landlord Association or partnering without profit or monetary gain.

All statistics were gathered between December 13th 2019 – January 22nd 2020 and reflect results for the period between January 20th 2019 to December 1st 2019.

Main Findings

These correspond to an estimated 1.8 million landlords operating in the private, residential property rental sector.

Most landlords operate as private individuals rather than as part of a company or organisation.

94% of landlords rent property as an individual, 4% as part of a company and 2% as part of some other organisation.

While almost half of landlords own just one property, half of private rented sector tenancies are let by the 17% of landlords with five or more properties.

45% of landlords have just one rental property. This represents 21% of the private rented sector.

A further 38% own between two and four properties (representing 31% of the sector). The remaining 17% of landlords own five or more properties, representing 48% of the private rented sector.

Ignoring the methodological differences, since 2010, the proportion of landlords with just one property has declined from 78% to 45% or from 40% to 21% of the sector. Meanwhile, the proportion of landlords with five or more properties increased from 5% to 17% or from 39% to 48% of the sector.

Landlords are, on average, older and less ethnically diverse than the general population. Most have been landlords for some time.

Over half (59%) of landlords are aged 55 years or older. Not surprisingly, given the older age profile, a third (33%) of landlords are retired. The majority (89%) of landlords are White.

70% of landlords have let property for 6 years or more. The average (mean) length of time that landlords had let property was 11.5 years.

Landlords most commonly reported that they had become landlords because property was preferable to other investments and/or to contribute to their pension.

46% of landlords became a landlord because they preferred property to other investments; 44% did so to contribute to their pension. Only 4% became a landlord to let property as a full-time business.

Although 53% of landlords bought their first rental property with the intention of renting it out, 32% did so to live in themselves.

Landlords who had been letting for longer were more likely to have used a mortgage to fund their first rental property and more likely to currently use a Buy to Let mortgage compared to more recent landlords.

Almost two thirds (63%) of those who had been a landlord for three years or less had used a mortgage to fund their first rental property compared to three quarters of those who had been a landlord for longer (73% of those who had been a landlord for between four and 10 years, and 75% of those a landlord for 11 or more years).

About half (49%) of those who had been a landlord for three years or less had a Buy to Let mortgage to fund their current property/ies.

This increased to 58% of those who had been letting for between four and 10 years, and 54% for those letting for 11 or more years.

Landlords, on average, report a gross rental income of £15,000 per year (before tax and other deductions). For most landlords income from rent makes up two fifths (42%) of their total gross income.

The average (median) gross rental income (before tax and other deductions) is £15,000. Three in five (61%) landlords had gross rental income of less than £20,000, while a further quarter (26%) reported between £20,000 and £49,999.

Thirteen percent reported a gross rental income of £50,000 or more.

Using their annual reported gross income (before tax and other deductions and excluding rental income) and their gross rental income, it was calculated that landlords received 42% of their total gross income from rental property.

Over the next two years, half of landlords plan to keep the number of rental properties the same, with similar proportions planning to increase the number of properties as those planning to decrease or leave the rental business.

53% of landlords planned to keep their number of rental properties the same, with 11% planning to increase the number of properties they own. This compared with 10% of landlords who planned to reduce the number of properties (representing 18% of tenancies) and 5% planning to sell all their rental property and leave the
rental business (representing 5% of tenancies).

Letting practices vary between landlords and agents. For example, agents are more likely than landlords to increase rent for a new tenant and for a tenancy renewal. They are also more likely to require a larger deposit.

50% of agents increased the rent for their last letting to a new tenant compared to 42% of landlords. For their most recent tenancy renewal 70% of landlords kept the rent the same compared to 63% of agents. A third (31%) of agents increased the rent for existing tenants, compared to 22% of landlords.

For their last letting, 61% of agents took a deposit of more than four and up to six weeks’ rent (45% of landlords took a deposit of this size). Almost half (47%) of landlords took a deposit of up four weeks’ rent (compared with 29% of agents).

Meanwhile, landlords are less willing than agents to let to certain groups, including those in receipt of Housing Benefit and Universal Credit, non-UK passport holders and families.

52% of landlords and 37% of agents reported that they would be unwilling to let to tenants in receipt of Housing Benefit. Similar proportions reported that they would be unwilling to let to anyone on Universal Credit (47% and 33% respectively).

The most commonly reported reasons for not letting to this group included the risk of delay in payment or unpaid rent and the risk that benefits would not cover the rent.

A quarter (25%) of landlords and 10% of agents are unwilling to let to non-UK passport holders. Reasons for this were not explored.

18% of landlords and 6% of agents are unwilling to let to families.

Most often this was because their property or properties were unsuitable for families and also because of the greater risk of damage to the property.

Landlords were asked how many rental properties they own in England.

  • In 2019, 45% owned one rental property, representing 21% of tenancies.
  • A further 38% owned between two and four rental properties, representing 31% of tenancies.
  • The remaining 17% of landlords owned five or more properties, representing almost half (48%) of tenancies,
  • The portfolios of individual landlords were considerably smaller than those of companies and organisations.
  • Most individual landlords (85%) owned between one and four properties, with just under half (47%) owning only one
    rental property.
  • The remaining 15% of individual landlords owned five or more
    properties.
  • By comparison, 46% of companies owned between one and four properties, with only 10% owning one rental property.
  • Just over half (54%) owned five or more rental properties, including 14% who owned 25 or more
  • Landlords with a Buy to Let mortgage were more likely than landlords with another kind of loan, or with no debt or borrowing, to own multiple rental properties.
  • About a third (37%) of landlords with a Buy to Let mortgage owned one property, with two thirds (63%) owning two or more properties.
  • Of landlords with another kind of loan, the proportion with one property alone increased to half (51%), while half (49%) owned two or more properties.
  • Among landlords with no debt or borrowing to fund their rental property, more than half (55%) owned one property and less than half (45%) owned two or more properties
  • Landlords who had been letting for longer tended to have larger portfolios. Of landlords with 11 or more years’ experience, 70% had two or more properties, compared with 48% of those who had been letting for four to 10 years and
    22% of those who had been a landlord for three years or less
  • Between 2010 and 2019, there has been a significant decrease in the proportion of landlords with just one property, from 78% to 45%. This decrease may in part be a function of the different methodology, e.g. such landlords may have longstanding tenants.

Ending a Tenancy and Tenant Eviction

  • Three quarters of landlords and agents were willing to offer longer tenancies of more than 12 months.
  • 40% were willing to offer longer tenancies.
  • An additional 38% of landlords and agents were willing to if there was a break clause in place to enable tenants and landlords to break the contract if required.
  • Landlords and agents who reported a tenancy ending within the last two years were asked why this tenancy (or these tenancies) had ended. The findings are reported for both landlords and agents together because agents are likely
    to be responding on behalf of a number of landlords that they represent and it is not appropriate to compare the responses of the two groups.
  • The most common reason, selected by half (50%) of landlords and agents, was that it was the end of the tenancy and the tenant decided not to renew. A quarter (25%) of landlords and agents reported that tenancies ended because the tenant moved out before the end of the tenancy
  • Other reasons for tenancies ending included the landlord or agent asking the tenant to leave (3%), the landlord or agent evicting the tenant (15%)

Eviction Numbers Increasing

Where landlords and agents reported that they had chosen to end a tenancy in the last two years either by asking the tenant to leave, not renewing a tenancy or evicting a tenant, they were asked to select the reasons for this

  • The most common reason for landlords and agents to end tenancies, selected by over half (58%) of landlords and agents, was that the tenant was in arrears.
  • Less than half (45%) of landlords and agents chose to end a tenancy because the property was not cared for.
  • Other reasons for ending the tenancy included to refurbish the property and relet it (18%), to sell the property (10%) and that the tenant had too many complaints about the property (13%)

Landlords and agents were asked what would encourage them to offer longer tenancies.

  • They most commonly reported that they would if it was easier to remove problem tenants (70%).

In most cases, landlords and agents report that it is the tenant’s choice to end a tenancy.

  • 50% of landlords and agents reported that, in the last two years, they had ended at least one tenancy because the tenancy ended and the tenant did not want to renew.
  • A quarter (25%) ended because the tenant had moved out before the tenancy had ended.
  • Meanwhile, 7% of landlords and agents asked the tenant to
    leave, 7% evicted the tenant and 4% decided not to renew.
  • The most common reasons for evicting, asking a tenant to leave or not renewing a tenancy were due to rent arrears (58%) or due to the tenant not caring for the property (45%).
  • In relation to the last tenancy that ended, 60% of landlords and 54% of agents returned the full deposit to the tenant. A quarter (24%) of landlords and 30% of agents returned some of the deposit.
  • Landlords and agents did not return the deposit (either in part or at all) due to damage to the property or contents (65% of landlords and 60% of agents) and to clean the property for the next tenant (65% of landlords and 65% of agents).

Profile of private landlords

This chapter presents findings on the types and characteristics of landlords, their finances, their motivations for becoming a landlord and their perceived role as a landlord. These questions were asked only of landlords and so this chapter does not include agents

Landlord types

  • Landlords were asked how they currently let their property. The majority (94%) let property as an ‘individual or a group of individuals’, with 4% ‘as part of a company’ and the remaining 2% as part of some ‘other’ organisation. (For track, The Landlord Association is not represented as an ‘other’ organisation. We are exempt from the options to avoid confusion when sumissing landlords as individuals when also part of a collective entity)

Landlord population by landlord type

  • Most (83%) tenancies were represented by individual landlords, with companies representing 13% and other organisations 4%,
  • In 2010, 89% of all landlords in England were private individuals, with 5% company landlords and 6% other organisation landlords.
  • Individual landlords represented 71% of all private rented dwellings, with companies representing 15% and other organisations 14%
  • Landlords were asked how many rental properties they own in England. In 2018, 45% owned one rental property, representing 21% of tenancies.
  • A further 38% owned between two and four rental properties, representing 31% of tenancies.
  • The remaining 17% of landlords owned five or more properties, representing almost half (48%) of tenancies
  • The portfolios of individual landlords were considerably smaller than those of companies and organisations. Most individual landlords (85%) owned between one and four properties, with just under half (47%) owning only one
    rental property. The remaining 15% of individual landlords owned five or more properties. By comparison, 46% of companies owned between one and four properties, with only 10% owning one rental property. Just over half (54%)
    owned five or more rental properties, including 14% who owned 25 or more,
  • Landlords with a Buy to Let mortgage were more likely than landlords with another kind of loan, or with no debt or borrowing, to own multiple rental properties. About a third (37%) of landlords with a Buy to Let mortgage owned one property, with two thirds (63%) owning two or more properties. Of landlords with another kind of loan, the proportion with one property alone increased to half (51%), while half (49%) owned two or more properties. Among landlords with no debt or borrowing to fund their rental property, more than half (55%) owned one property and less than half (45%) owned two or more properties
  • Landlords who had been letting for longer tended to have larger portfolios. Of landlords with 11 or more years’ experience, 70% had two or more properties, compared with 48% of those who had been letting for four to 10 years and 22% of those who had been a landlord for three years or less
  • Between 2010 and 2018, there has been a significant decrease in the proportion of landlords with just one property, from 78% to 45%. This decrease may in part be a function of the different methodology, e.g. such landlords may have longstanding tenants for whom they have not taken a
    deposit.

Age, ethnicity and time spent as a landlord

  • Individual landlords were asked questions about their personal characteristics and landlord journey
  • Landlords were, on average (median), 57 years old. This is older than the general population. At the time of the 2011 Census, the median age for the population of England and Wales was 39 years.
  • Over half (59%) of landlords were aged 55 or older, representing 62% of tenancies
  • In 2010, 70% of landlords had been landlords for 10 years or less, representing 48% of tenancies. The difference between 2018 and 2010 suggests that the average length of experience as a landlord has increased since then, but this could reflect changes in methodology

Financing & Buy to Let Mortgages

  • Compared with longer standing landlords, recent landlords were more likely to have bought their first rental property to live in themselves and less likely to have bought it with the intention of letting it. Over a third (37%) of landlords that had been a landlord for three years or less bought their first property to live in themselves, compared with 28% of those who had been a landlord for 11 or more years. On the other hand, half (49%) of those who had been a landlord for three years or less bought their first rental property with the intention of letting it out, compared to two thirds (58%) of those who had been a landlord for 11 or more years
  • Landlords who had bought or built their first rental property were asked about the sources of funding for this purchase or build. Almost three quarters (72%) reported using a mortgage, 37% used personal savings and 8% used an inheritance
  • Recent landlords were less likely to have used a mortgage to fund their first rental property, compared to longer standing landlords. Almost two thirds (63%) of those who had been a landlord for three years or less had used a mortgage. In comparison, around three quarters of those who had been a landlord for longer had used a mortgage (73% of those who had been a landlord between four and 10 years, and 75% of those a landlord for 11 or more years),
  • In 2018, 29% of landlords were employed full-time and 11% part-time. A third (33%) of landlords were retired. Less than a fifth (16%) of landlords were selfemployed (not as landlord), with a further 13% self-employed as a landlord
  • Over half of tenancies were represented either by landlords who were retired (28%) or those self-employed as a landlord (30%)

Property values and borrowing

  • Landlords were asked the approximate value of their total rental property portfolio. The average (median) total market value of landlord rental portfolios was £400,000. Nearly a quarter (23%) of landlords had portfolios they valued at less than £200,000. A further 36% had portfolios they valued from
    £200,000 to £499,999. Nearly a quarter (22%) had a portfolio they valued from £500,000 to £999,999, with the remaining 18% having rental property portfolios valued at £1 million or more
  • The longer the time spent letting, the more likely landlords were to have a higher value portfolio. Of those who had been a landlord for three years or less, only 15% had a portfolio valued at more than £500,000. This rose to 32% of those who had been letting for between four and 10 years and to over
    half (54%) of those letting for more than 10 years
  • The average (mean) estimated value per rental property for all landlords was £261,900 with the average house value £243,000
  • Landlords who reported using borrowing or loans to fund their rental property were also asked the approximate value of such borrowing. The average (median) value of loans or borrowing was £180,000. One in three (29%) landlords using borrowing had loans of less than £100,000, with a further 38% having loans of between £100,000 and £300,000. The remaining third (33%) had loans of £300,000 or more
  • The longer a landlord had been letting the higher the value of their loans or borrowing. Only 3% of landlords who had been letting for three years or less had borrowing of £500,000 or more. This rose to 12% for those who had been letting for between four to 10 years and to 27% for those who had been letting for more than 10 years
  • The median equity or net value of landlord rental portfolios was £220,000, calculated from the median value of landlord rental portfolios minus median value of loans or borrowing.
  • For those who had existing loans or borrowing, the loan to value ratio of the borrowing was calculated using the landlord’s estimate of their portfolio’s market value. The median loan to value ratio for these landlords was 50%.
  • Over a third (34%) of landlords with debt or borrowing on their rental properties had a loan to value ratio of 39% or less, with another third (32%) one of 40 to 59%. A quarter (25%) had a loan to value ratio of between 60 to 79%, with a further 9% having a loan to value ratio of 80% or more. Of these
    landlords, 4% had an estimated loan to value ratio of 100% or more,

Portfolio loan to value ratios for landlords with debt

  • Landlords were asked which, if any, types of loans or borrowing they currently have to fund their rental property. Over half (55%) of landlords had a Buy to Let mortgage, representing 61% of tenancies. More than a third (39%) of landlords had no debt or borrowing, representing 30% of tenancies. Smaller proportions had a commercial loan (4%) or a loan from family or friends (3%),

Extent and type of borrowing for funding of rental property

  • Landlords who had been letting for longer were more likely to have a Buy to Let mortgage. Of landlords who had been a landlord for three or less years, almost half (49%) had a Buy to Let mortgage. This increased to 58% of those who had been letting for between four and 10 years, and 54% for those letting for 11 or more years
  • Of recent landlords (three years or less), 43% had no loans or borrowing to fund their rental property, compared to 34% for those who had been a landlord for between four and 10 years and 42% for those landlords who had been letting for more than 10 years

Type of rental property currently let or managed by landlords and agents

  • Landlords with larger portfolios are more likely to be letting a wider range of property types. As such, the proportion of landlords with each property type increased with portfolio size
  • For instance, the most common type of property for landlords with portfolios of all sizes were terraced houses. A third (32%) of landlords with one property had a terraced house, while half (48%) of those with between two and four properties had at least one, as did 70% of those with five or more properties in their portfolio. However, the distribution of types of properties was similar for landlords with different sized portfolios

Gas and Boiler Issues in let property

  • Landlords reported a rise (10%) from 2018 in boiler repairs with 12% of property requiring a repair on a gas boiler within their let properties during 2019. Furthermore, an increase of 2% from 2018-19 required a replacement gas boiler (6%)

Types of Gas Boiler by replacement type

  • Types of gas boilers by replacement type
    • Combi – 44%
    • Regular – 40%
    • System – 16%

By regional breakdown

  • The most boiler repairs were needed in London with 6.08% of boilers estimated to have broken down during this period. This was closely followed by the West Midlands at 6.04% and the North East at 5.59%.
  • Boilers are least likely to break down in Yorkshire with 4.27%, Scotland at 4.38% and the North West at 4.79%.
  • These results, at an average of 5.1% nationally, suggests 30,000+ boiler repairs were undertaken on property within portlofios managed by landlords under the guidance of The Landlord Association

Landlord Insurance

  • up 12% on 2018, 79% of landlords reported having landlord insurance cover for their properties, by type popularity
    • Buildings Insurance
    • Contents Insurance
    • Boiler Care Cover
    • Public Liability Insurance
    • Landlord Emergency Cover
    • Rent Guarantee Insurance
    • Unoccupied Property
  • A further 18% of all landlords indicated that they were either thinking of or actively seeking to insure their properties currently uninsured, up 7% on the previous year
  • Landlords with a single property were less likely to have a insurance policy (68%) than those with a portfolio of two properties or more (87%)

Boiler Cover Insurance

22% of landlords indicated that they have boiler care cover (up 12% on 2018) suggesting that over 130,000 property are insured with some kind of cover to protect their boilers for repair and replacement

of those without boiler care cover, 15% suggested they were either thinking of getting cover or were actively seeking to get cover (90,000 properties).

Of the reasons given for not having boiler cover (1) Not enough time (2) too expensive (3) not important (4) Did not renew previous policy (5) portfolio cover options minimal (6) No gas in property (18%).

© TLA copyright, 2020. 

This survey may be republished in part or full without permission. If you require any further information regarding the collation of this survey or indeed any of the information and statistics included please email dean@landlordexpert.co.uk.

This document/publication is also available on our website at www.landlordexpert.co.uk. All rights reserved by The Landlord Association.

TLA: Choosing The Best Energy Supplier For Your Rental Property

TLA: Choosing The Best Energy Supplier For Your Rental Property

If, like many tenants, your rental package is not bills inclusive, it will fall upon you to pick your own energy supplier. But how can you go about picking the best one, with the best value for money and the biggest impact on lowering your carbon footprint?

Below, we outline some top tips on the key things you need to be considering when choosing an energy supplier…

Use comparison sites to shop around

For better or worse, the adverts for these sites are now ingrained in our collective consciousness, but they do actually have a use – particularly when it comes to comparing things like the best energy deals on the market.

Picking the right gas and electricity deal could save you considerable amounts of money each year (hundreds of pounds off your energy bills, in many cases), so it’s worth doing your research and shopping around for the best possible package before you commit yourself to a particular provider.

Sites such as Compare The Market and moneysupermarket.com allow you to compare fuel tariffs, while Which? Switch and uSwitch also allow you to compare a range of tariffs in your area.

Which tariff should you choose?

There are a number of things you should bear in mind when choosing your energy supplier. Do you want a fixed, variable or green energy deal? Do you want to combine your gas and electricity in a dual fuel package?

Do you want to be on a ‘time of use’ deal, which lowers rates for your electricity in off-peak hours – usually between midnight and 7am? If you use most of your energy during these hours, time of use is something you may want to consider. In most cases peak energy use will be outside these hours, but for some it might represent the right deal.

Meanwhile, in a similar way to mortgages, a fixed energy deal is often cheaper and more secure than a variable one – with prices fixed for the length of the contract, or fixed at different rates, at separate stages of the contract.

However, on a fixed deal, if energy rates go down, your rate will not be reduced. What’s more, while fixed deals are often the cheapest, they don’t tend to offer much flexibility in terms of switching. If you choose to change deals more than 42 days before the end of your contract, you are liable to pay a fee to do so.

A greener approach – Visit Our Green partners, WorldofRenewables.com

With the growth in renewable energy and greater awareness about climate change, many consumers are keen to take a greener approach to many aspects of life. This includes energy deals, where green energy tariffs are an option. These tariffs use more renewable energy than standard gas or electricity deals.

This could cost you more than other tariffs, but there are certain green suppliers – including OVO Energy, Green Network Energy, Green Star Energy and Ecotricity – who offer cheaper green energy deals.

With BP recently suggesting that renewable energy will be the world’s main power source by 2040, greener energy is likely to be more popular than ever in the coming years and is something you may want consider now to help the environment and, in many cases, secure lower bills.

Check out our Going Green section on the homepage.

Switching tariffs or providers

If you’re already on one tariff, and want to switch to a cheaper one to save money on your energy bills, you can ask your supplier to move you to a cheaper tariff. Or, alternatively, you can switch to a totally new provider.

Switching can save you money and can also allow you to source a more energy efficient tariff and enable you to switch more easily at a future juncture.

Assuming you are not in debt to your current supplier, you can switch by phone or online. You can use the sites mentioned above to search for deals by postcode and compare tariffs, inputting your energy usage to ensure you get the most accurate results possible.

If you have a smart meter, information on your energy usage will be provided – or you could simply look at your latest bill.

Once you’ve found the right deal, you can confirm your switch by providing your new supplier with full bank and address details. It should take around three weeks for the switch to take place, and you may have to pay a small cancellation fee (typically £25 to £30 for each service) to your existing supplier, especially if you’re on a fixed deal.

The Big Six – who are they?

When the topic of energy suppliers in the UK is raised, you’ll often hear about the Big Six – the companies responsible for providing approximately 95% of the country’s energy. But who are these firms?

  • British Gas
  • npower
  • ScottishPower
  • SSE
  • EDF Energy
  • E.ON UK

While these companies provide the vast majority of UK homes with gas and electricity, there are a whole host of smaller suppliers on the market who may offer better deals, including local and green providers.

Often, these smaller companies have higher levels of customer satisfaction as they can offer a more personal service.

What’s more, fears about issues being caused by a small supplier going out of business suddenly are misguided, with energy regulator Ofgem recently introducing measures to protect consumers from losing their energy supply if a small supplier goes bust.

Despite the possible benefits of switching suppliers, many are put off by the time, cost and hassle they perceive to be involved. As a result, less than half of the UK’s population has ever switched their energy supplier, even with regular calls from MPs for people to browse around for better deals.

Paying for your energy

In some cases, people opt for a prepayment tariff, whereby you top up your energy using a prepayment meter. This means you pay for your energy in advance and swerve the prospect of monthly and quarterly bills, offering more flexibility and an effective pay as you go approach to energy.

While this ensures you are more likely to only pay for the energy you need, a prepayment meter typically makes gas and electricity more expensive.

If you don’t have a prepayment meter, you can pay your energy bill on a quarterly basis (by cheque, direct debit or BACS transfer), or via a monthly direct debit. The latter option is very often the cheapest, with most suppliers providing discounts for those paying by direct debit.

One other option is to make regular payments via a credit or debit card, which can be done weekly, every two weeks or every month.

Splitting the bill

If you are part of a house share or living in a student property with your friends while at university, you will want to find a way of splitting the bills you owe fairly and easily.

Sites such as Glide simplify bills for students by combining all utilities into an equal monthly split for each tenant, reducing the possibility of disagreements over who owes what and who paid what when. It also means chasing housemates for money becomes less of an issue.

However you do it, you should decide on a system and stick to it. If one or two people use much more energy than others, they may be willing to contribute more to the monthly energy costs. Work things out fairly and remain consistent with this thereafter.

As you can see, there is quite a lot to get your head around when it comes to choosing the right energy supplier for your rental property. But there is plenty of help out there to help you pick the right package and provider, and you may want to seek advice from your landlord, friends or parents on which energy supplier they would recommend.

Remember, too, switching isn’t as hard as you probably think it is, so it’s worth regularly reviewing your energy package to ensure you’re getting the best possible deal.

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