Firstly, let’s look at the market:
We were quite glad to see the end of 2021 as from June it became incredibly difficult to get the majority of maintenance carried out in anything like the timescales we had been accustomed to. This was down to several issues, namely; the pandemic causing trades staffing shortages and/or staff illness, Brexit causing trades staff shortages, pandemic & Brexit related supply issues and at times huge increases in material costs especially steel and timber, a high volume of private home owners spending unused holiday money on minor jobs in their homes, a high volume of private home owners improving their homes (extending up and out) after spending so much time there in 2020/2021.
Thankfully by the end of 2021 things had calmed down somewhat and trades were able to catch up on the overdue schedules of work. So far 2022 is looking much better and Bishop Sullivan now has a much larger pool of trades to rely on than previously so not all bad!
The market is one of extremes with (as of Zoopla’s NOV-21 Rental Property Index) supply was down 13% year on year due to the number of properties sold in 2021 as well as a higher than average number of Landlords moving from long term to short term (IE AirBnB) due to staycation. I expect the latter will reverse itself in 2022 on the basis holidaying abroad continues its upward trajectory (bad pun I know). This will help ease supply to a degree but Govt need to do more if they want things to improve for Tenants quickly. Encouraging Landlord to buy with the removal of the additional 3% SDLT and Section 24 tax regs would be a great tonic. Demand is an astonishing 43% higher than a year ago with Londoners still coming down due to work from home and more Tenants looking to move en-masse now the economy picks up after the worst of Brexit and the pandemic appear to be passing. It is a staggering 56% gap between supply and demand, in 23 years I have never seen numbers like this and as a result rents have increased nationally by 8.3% year on year as of NOV-21. It was much higher in the peak market of SUG/SEP 2021 and likely will occur again in 2022. All in all, what goes onto the market promptly comes off it and at a higher rent so all good for Landlords. If you can find an investment property to buy this is a very good time to do it. Worthing is well worth looking at as with all of the young professionals and families moving West pushing housing values and rents up the percent capital gain over 5 – 10 years will rival or beat that of Brighton & Hove.
Secondly, let’s look at the legislation:
Carbon Monoxide alarms
It is highly likely that Govt will legislate carbon monoxide alarms for all rental properties with gas boilers and/or fires very soon. Currently the somewhat odd requirement of the Smoke and Carbon Monoxide Alarm (England) Regulations 2015 only requires CO alarms for the burning of solid fuels (EG wood). As with EICRs in 2020 and 2021 the new regs are likely to create a spike in demand, and possibly prices. Govt has a tendency to drop new regs onto the industry will little time to prepare so our advice is to have a CO alarm installed for any property with a gas boiler sooner rather than later.
Right to Rent
New laws coming in on 6-APR-22 mean letting agents and self-manage Landlords will need to determine the immigration status of all prospective adult Tenants using Govt’s newly digitised system. Lets hope it works! Letting agents and Landlords can use the Right to Rent Online Checking Service on GOV.UK to view the status of existing and prospective Tenants – there will no longer be a need to check physical documents or do video calls.
Levelling Up White Paper & Section 21
The government’s new Levelling Up White Paper includes a radical reshaping of the private rental sector.
Section 21 eviction powers will be removed, and Housing Secretary Michael Gove says this will “end the unfair situation where renters can be kicked out of their homes for no reason.” Over the last 23 years in this industry the vast majority of Section 21 Notices I have seen served have been for a valid reason (EG Landlord moving back in, selling or most commonly rent arrears) and these will almost certainly still be permitted under the new regs. In this time I have come across very few of these ‘rogue Landlords’ but it may well be due to the areas I worked in. There is nothing suggesting what will replace Section 21 however it is almost certain Section 8 will be beefed up to incorporate the valid reasons for repossession. I sincerely hope unsocial behaviour (of Tenants) is included as it can be extremely challenging for all involved, especially the neighbours.
In addition, all homes in the private rental sector will have to meet a minimum standard to be known as the Decent Homes Standard. This is despite the Deregulation Act 2016 and The Housing Health and Safety Rating System (England) Regulations 2005 seemingly covering this aim already. The White Paper does not stop there. It adds: “We will consult on introducing a landlord register, and will set out plans for a crackdown on rogue landlords – making sure fines and bans stop repeat offenders leaving renters in terrible conditions.” In principle it is a good idea but the fairly large crack in the plans is who will police it, currently no suggestions there. It is also unknown if there will be a fee to join the mandatory register at this stage.
We do not yet have a date for these new regs so I will update you when more is known.
Having read through the breakdown of the Levelling Up White Paper it strikes me that many of its aims were picked straight from branches of the rare utopia tree, which some say can be found in a place where Christmas parties are not parties but December meetings, mainly due to the clothing worn. If you want to have a look:
If you have any questions on this blog feel free to let me know.
If you need any assistance letting your property in Brighton, Hove, Kemptown and surrounding areas or if you just have some general queries please feel free to contact us on +44 (0)1273 646426 or lettings@bishopsullivan.co.uk
Best Regards,
Julian Bishop
