Reticent Resurrection

This week’s top news items in property – and why they matter.

Wow. It’s not very often that stories coming out of Local Authorities make me stir, but this one did. Blackburn with Darwen Council has abandoned its proposed selective licensing scheme for over 1,100 properties in the Hollins Bank area after consultations revealed significant opposition from landlords and tenants. Concerns were raised that the scheme’s costs and regulations might prompt landlords to exit the private rental sector, potentially reducing available rental properties and increasing homelessness. Instead, the council plans to offer support to landlords and focus enforcement on known rogue operators. Is this a sign of things to come as, finally, the unintended repercussions of additional red-tape and licencing (that doesn’t address rogue actors) is laid bare? Perhaps. Hopefully. Yes it’s a small number of properties in the grand scheme of things, but hopefully what this is really showing – in microcosm – is the logic of it all; if you introduce licencing – only right and proper owners will sign-up to it. Rogue actors will not. Additionally, as property rental is a business, ANY increase in costs (through licencing or regulation) will be passed on to the customer – in this case, the tenants. It’s the same in every business. If the costs are not passed-on, and profit margins are squeezed so much that the whole venture becomes not worth it, then the businesses (provision and management of private rental properties) will stop. Meaning less properties on the rental market, higher rents for those that remain – and miserable tenants as a result, fighting over what remains. With satisfaction levels higher amongst tenants in the private rental sector when compared to the social rented sector, this is something nobody wants. In other words, you will help tenants if you help private landlords – by cutting regulation and taxes, and encouraging investment. And you can help everyone by building more properties.

House Prices Approaching £300,000. West One Loans has stated that it believes that average nominal UK house prices could be set to surpass £300,000 – potentially this year. Property values continue to rise – affecting affordability and investment decisions. This is crucial as it impacts capital appreciation potential and market entry points. As well as keeping a close eye on the general economy, average wages and other key indicators, purchasers should time purchases carefully and consider regional price trends when making buying decisions.

ATTENTION LANDLORDS: Tired of tenancy uncertainty or the constant onslaught of regulation and risk? Wouldn’t you rather have trouble-free renting for 3-5 years at a time without any gaps in rent? Find out more about our soon to be unveiled service here.

Buy-to-Let Market Recovery. A gradual recovery in the buy-to-let market may be tentatively coming. However there are still myriad challenges. But this is still important as it signals potential growth opportunities after a challenging period. Purchasers should monitor market trends and consider strategic acquisitions to capitalise on the upturn.

UTILITY OF THE WEEK: Gemini. If you haven’t heard of this, it’s Google’s answer to ChatGPT, and it works in a similar way. However it offers (as you’d expect) much deeper integration across Google’s knowledge base. It also reportedly handles different information types (images, text, code) more comprehensively, as it was built with this in mind from the outset. Whereas ChatGPT focusses on being a robust conversational AI. In any case, it can be useful to “get a second opinion” if you are struggling with a particular piece of research or task.

Surging Buy-to-Let Mortgage Options. A “record” increase in buy-to-let mortgage options is providing landlords with more financing flexibility, which is crucual. However mortgage fees remain stubbornly high (compared to the last 10 years), making 5 year fixes more attractive to many due to the perceived reduced impact of any initial fees. It can often be better to take a higher interest rate, fixing for several years and nil fee, rather than the other way around. Normally, lenders offer products which “cost the same” over the full period. However there is an advantage to “spreading” the cost through higher interest over the period. One is that it’s more transparent – you see the real cost every month, and two, more importantly, is that over a 5 year period, rent rises will help to absorb those additional costs. As always, my only advice is to explore financing options via your Mortgage Broker.

Who are M2P? Married2Property are a family-run property company that aims to build social good through property.

Renters’ Rights Bill Impact on Corporate Landlords. It’s not just traditional landlords (and therefore their tenants) that could face additional costs imposed by the Renters’ Rights Bill – it will almost certainly increase operational costs and regulatory challenges for corporate landlords too. A significant potential boon for smaller landlords has been raised – that those with 5 properties or fewer could retain section 21 (the ability to evict and get control back of your property without fault being declared). However I think this is unlikely to get through, as it was such a key manifesto foot-stomper for Labour. So don’t bet on it.

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Rising Void Periods and Costs for Landlords. As the costs of tradespeople (and well, everything) increases, it’s no surprise that increased void periods are leading to ever-higher costs for landlords – threatening business stability. This is important as it highlights the importance of minimising voids – which are hugely expensive for Landlords, as all of their fixed costs (energy, marketing fees, mortgages and repairs etc) don’t just go away when the tenant leaves. There are other options, such as our coming-soon guaranteed rent offer with no voids (up to 5 year terms).

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Scotland’s Changing Rental Landscape. The end of rent controls in Scotland (on 31st March) may attract new private rented sector investment. However I suspect that the damage has been done to the PRS there – at least for the next 2-5 years or so. With a highly punitive 8% tax on entry, an upcoming Scottish Housing Bill and an ever-hostile government. It doesn’t seem likely that Scottish tenants will be getting an increase in the supply of rental properties any time soon – quite the opposite most likely.

Song of the Week: The Last of the International Playboys / Morrissey

And Finally… They say “never buy anything until you can afford to buy it twice”. Simple rule right?

What do M2P do? Married2Property aims to create social good through by property – by housing more vulnerable groups of people – giving them a stable platform from which to try and improve their lot in life. We also offer Landlords competitive and hassle-free solutions for their property problems.