Surrey based Pilgrims International Sales & Lettings Managing Director, James Griffin, looks forward to 2020.....
The big question on the lips of many, post the general election, relates to the future of the housing market. From my conversations with both small and large portfolio Landlords at Pilgrims International Lettings, there does seem to be an ‘itching’ desire to return to their longer-term investment plans. An end to the political impasse has sent confidence soaring! Many will argue that Brexit uncertainty will stifle growth, but there seems to be an overriding enthusiasm that the country is moving forwards at last. A litmus paper for the sales market? Time will tell, but financial institutions certainly seem to think so. Buy-To-Let mortgage rates are on the way down and the favourable conditions required for capital growth appear to be place for the return of the property investor.
Legal update - The abolition of Section 21
The Conservatives have pledged to continue with their plans to abolish Section 21, so called ‘no-fault’ evictions, in order to make private renting tenants feel more secure in their homes. The move has been criticised by some in the industry, with many worried it could make evicting tenants more costly and difficult, even when there is a valid reason. However, with improvements to Section 8, the hope is that it would make the private rented sector fairer for all. My only humble advice to politicians is not to rush! Failure to marry these changes with a streamlined court process will result in less available property for those most vulnerable in society, something everyone wants to avoid.
Lifetime rental deposits
Currently this idea is in its infancy, but changes are most certainly on the way. The idea of renters paying one deposit which then moves with them when they move rental property has been picked up by the government for future legislation. Watch this space in the coming months for further updates.
The Tenant Fees Ban Act 2019 – the effects so far…
Now well into this new legislation (since June 2019), it certainly appears that, in general terms, rents are starting to rise as the Tenant referencing, Tenant compliance and previously shared inventory costs are now solely borne by Landlords. This was as most property sector experts predicted, as Landlord’s simply pass on their extra expense. A reminder for all Landlords that the full compliance back stop (please excuse the use of that word!) is 31st May 2019. Deposits on all AST’s will need to be reduced to 5 weeks before this date. All other non-permitted payments will become illegal. Landlords must make sure they comply as Tenant awareness increases and enforcement is stepped up.
With the legislation only 6 months old, my own company has seen a 20% increase in the registration of professional Tenants in the last 6 months. Tenants increasingly wish to go through a regulated agent to find their rental property and are shying away from Private Landlords. With no fees and a guarantee of compliance this certainly makes sense.
Private landlords increasingly targeted by Tenant support groups
Tenant groups are increasingly providing Tenants with their support for action against non-compliant Landlords who flout the new legislation.
Those who do not have their property managed by a regulated agent, perhaps have incorrect paperwork, outdated Tenant Right to Rent compliance or a non-compliant property. The days when private DIY Landlords could hide under the radar from industry regulators are swiftly coming to an end. Fines for unsafe property or even just incorrect paperwork now regularly headline in today’s industry press.
The days of the rogue Landlord or Agent are most certainly in the past….brilliant news for Tenants and for those decent Landlords providing high standard rental property. There is no doubt….that is the vast majority of us!
In conclusion we look forward to 2020 with an optimism for growth that we haven’t seen for some time.