59 Ashford Landlords are risking £5,000 fines in Spring 2020

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Washing Machine Energy Ratings for Houses was the phrase one Ashford landlord used a few years ago when we were talking about the colour bar charts that every property has had to have for over 10 years now. Now these weren’t brought in just to exhaust the entire palate of ink in people’s printers, but to increase the energy efficiency of the UK’s housing stock.  The vast majority of Ashford landlords are, by now, acquainted with the legislation that came into force on the 1st of April 2018, that means all new and renewed private tenancy agreements must have an Energy Performance Certificate (EPC) rating of E or above, otherwise it would be illegal to rent the property out (EPC ratings have seven bands – A being the best and G the worst).

Yet, from 1st April 2020, those rules will be extended to also cover existing Ashford tenancies, meaning that under the new legislation, properties with an EPC rating of F or G will then be classed as unrentable – meaning it will be illegal to rent the property and the landlord will be liable for a fine of £5,000.

It will be illegal for a landlord to let any Ashford rental property with an EPC rating of F or G from April 2020

Back in 2018, there was a loophole for the Ashford landlords of F & G rated rental homes on new tenancies, where they did not need to upgrade the property for five years if it cost them money (called the ‘no cost to landlord’ exemption rule) – yet last year this exemption was removed – so they too are included in these new rules.

Therefore, this means that Ashford landlords must use their own cash to cover the cost of improving their Ashford property to at least meet EPC band E:

59 Ashford (TN23) properties will be illegal to rent out from the 1st April 2020…as they have energy ratings of F and G.

Now this requirement to upgrade properties is subject to a spending cap of £3,500 (including VAT) for each rental property, as landlords only need to spend what they need to, to improve their Ashford property to EPC rating E.

In cases where an Ashford landlord is unable to improve their Ashford property to EPC rating E within the £3,500 cap, then they still need to spend their hard earned cash and carry out the most appropriate measures which can be installed up to the £3,500 cap, and then register an exemption (with 3 quotes from 3 contractors) for their property on the basis that all relevant improvements have been installed and the property remains below an E.

Ashford properties such as an F rated terraced home on Beaver Road or some G rated flats on Lower Denmark Road will be illegal to rent out by April

If you are a self-managing Ashford landlord or a landlord with another Ashford agent, then feel free to pick up the phone and chat through any concerns with regard to these new regulations, how to read a EPC graph, how to find the EPC rating of your home, in fact anything – call me. The last thing you need is a £5,000 fine on top of the £3,500 improvement bill.

One final thought though – it might be wise for Ashford landlords who have had their rental properties for a while now to get a new EPC carried out on their property (something we can help with irrespective of whether you are a landlord of ours or not) as recent research has also acknowledged that some early EPC’s understated the thermal efficiency of solid walls.  As countless Ashford rental properties are pre 1925, which is when most (not all) new properties were built with cavity walls, the Dept for Business, Energy and Business Strategy have now recalibrated EPC’s to give a truer result. This probably means that some solid wall properties, Victorian and Edwardian terraced houses and converted flats, presently rated F under an EPC will no longer demand any improvement works and certainly less building work may be required in the case of a G rated rental property.

Is This the End of No-Fault Section 21 Evictions for Ashford’s 11,678 Tenants?

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In late spring, the Government announced that they were planning to end no-fault evictions for tenants living in private
rented accommodation.

I have since had a number of Ashford landlords contacting me anxious that removing a tenant from their Ashford buy-to-let property in the future had possibly become a lot more problematic. Yet, at the launch of the consultation on the changes to the piece of legislation relating to no-fault evictions (the Section 21 amendments), the Government wanted to assure British landlords that they would be protected by a bolstering of the existing Section 8 legislation: The current Section 8 already allows landlords grounds for recovery of their properties for reoccupation by the landlord, non-payment of rent and other legitimate factors.

4,545 Ashford landlords are affected by this potential change in the law

Comforting for both Ashford landlords and tenants is the fact that competent letting agents very rarely have to evict a tenant. In the event a tenant needs evicting it is normally because rent hasn’t been paid or because the landlord is either selling their buy-to-let investment or moving back into their property themselves – Looking at the consultation – it has been indicated that those grounds will not be removed from section 8 powers during the government’s consultation and the word is they will be bolstered and improved. To put the removal of Section 21 notices into some context…

Only 22,527
section 21 notices made it to Court last year, out the 4.5million private
rented households

Scotland banned no fault evictions (i.e. their own version of a Section 21) two years ago, and the model suggested by Westminster is similar to that of the new Scottish system. Landlords, tenants and agents have accordingly had to adapt north of the border, and there hasn’t been a mass exodus of landlords from the Scottish market.

The call throughout the lettings and legal profession is simply: if the Government is intent on making these changes, we need well-funded courts which specialise in housing and tenancy matters (as there are for family law).

Especially when the landlord manages the property themselves (without an agent), the issue of eviction often comes about from a breakdown in communication between landlord and tenant. The courts could use their mediation skills to make it simpler and faster for tenants and landlords to obtain quick and accessible justice instead of the existing drawn out procedures under Section 8, which helps no one (not even the tenant). This is important as the demand for Ashford rental properties is growing and growing and people need homes to live in:

Ashford needs an additional 216 buy-to-let properties per year for the next decade to meet the demand from Ashford tenants

As an agent in Ashford, I know most Ashford landlords consider buy-to-let as a long-term investment, with the average landlord looking to retain their buy-to-let property for at least 10 years or beyond. Talking to other agents around the country, over 90% of Section 21 notices are made by the tenant, not the landlord. Removing the Section 21 notice could thus affect tenants far more than landlords.

Replacing Section 21 with a system that requires a landlord to firstly have a good reason, and secondly to go through due process, will likely remove the more unprincipled amongst landlords from the property market. That is great news as those landlords will either sell their properties to new or existing buy-to-let Ashford landlords, or to tenants who want to buy them. So, it could be a small win for people looking for a new Ashford home, and a disappointment for landlords simply looking for a cash cow investment who have no care about their property or tenant!

If you are an Ashford landlord and want to know more, whether you are a client of ours, an Ashford landlord with another agent or a self-managing landlord, feel free to either drop me a line ( robert@taylorslettings.co.uk ) or pick up the phone (01233 663266) to chat about the implications of this and other legislative changes on the horizon.

Just 45.7% of Ashford Households Are Eco-friendly

Improving the energy efficiency of Britain’s 27.2 million homes, which are responsible for more than a quarter of the country’s CO2 and other greenhouse gas emissions, is seen as being key to tackling the issues of climate change, fuel poverty and our country’s energy security. This is particularly important as in June the Government announced they were going to make the country carbon neutral by 2050, meaning Britain’s homes need some extensive retro-fitting to meet these ambitious climate targets.

Researchers at Nottingham Trent University said it would cost on average £17,000 per property to retrofit each UK home to make it carbon neutral with renewable energy and insulation (this if done en masse and not piecemeal). That would cost the Country £462.4bn (interesting when the NHS costs £154bn per year). Now of course 22.7m homes are privately owned so that would be the responsibility of the owners, but if we look at publicly owned council housing, that would cost the Government in excess of £76.5bn – the HS2 project is costed at a mere £56bn!

The benefits of making homes carbon neutral go further than saving the planet, as occupants would have much lower gas and electric bills (which curently total £31.8bn per year), and generally warmer homes would reduce strain on the NHS, which spends about £848m a year treating conditions arising from cold housing. Also, local authorities would have to spend a lot less than the £5.2bn a year for ongoing property maintenance by the installation of extra insulation and renewable energy such as ground source heating, wind or solar panels.

To ‘encourage’ improved energy efficiency ratings, the Government
last year banned landlords from renting property with the lowest energy performance ratings of F or G, yet I don’t think there is an appetite to force private homeowners to do this work – although you never know in the future?. Homeowners would be unenthusiastic to take on the bother and cost of such building works, yet the Government could offer incentives and grants, which along with the funds saved on their energy bills could make the proposal more appealing.

So, what about the eco-credentials of of Ashford homeowners’ and landlords’ properties?

Every home that has been built, rented out or put on to the market in Ashford since 2007 has had to have an Energy Performance Certificate (EPC), giving it a rating between A and G (rather like those stickers you see on new fridges and washing machines). A is the highest rating (i.e. most efficient and greener) and G is the worst. So, looking at Ashford first, then comparing us to the rest of the UK, this is the result…

So, 45.75% of Ashford homes are in that eco-friendly A to C energy
performance banding ratings, which is proportionally 15% higher than the
national average.

So, what next? Well the Government will endeavour
to make the green revolution as painless as possible with technology developments
like LED light bulbs, for example, saving greenhouse gases without people
noticing. In the future we might have hydrogen-fuelled central heating instead
of mains gas, solar panels for electricity, triple glazed windows and even
ground sourced heating … sounds pie-in-the-sky? Well who would have thought 10
years ago that some of the most wanted cars would be electric or hybrid, built by
the likes of Tesla?

There is no doubt that the energy efficiency of a property will rise in the coming years as the cost of fuel and people’s opinion on going green changes. You don’t need to spend £17,000 to find out what you can do to make your property greener. Look at your EPC and it will tell you what small changes you can make to improve your Ashford home’s energy efficiency rating and ultimately save yourself money.

If you want to find your EPC rating of your Ashford home, go to www.epcregister.com

Ashford Landlords’ £5,790,921 Ticking Time Bomb

 

“I just love looking over and keeping up to date with the 108 pieces of legislation governing residential rental property in the UK!”

Said by No Landlord. Ever.

If you are one of the 1,773 Ashford landlords that manages your own property, it may surprise you to know that there are 108 separate pieces of legislation governing the rental of private housing. Oh, and on top of those 108 pieces of law, are a further 300+ regulations in the mix.

Whilst Ashford landlords once preferred to manage their Ashford buy-to-let properties themselves to maximise their profits, many are starting to see this as a false economy.

In the last four years, an additional 682 landlords in Ashford have converted from self-management to having their property managed by an Ashford letting agent, taking the total number of properties under management in Ashford to 2,772 (out of a total of 4,545 private Ashford rental properties).

Now, don’t get me wrong, self-managing your Ashford rental property can be a very fulfilling experience, allowing you, as an Ashford landlord, to build deep relationships with your tenant, and your emergency 24 hour plumber, and your builder (happy to do small jobs at a drop of a hat, of course) and decorator, and be on first name terms with their deposit provider, solicitor and EPC assessor to name but a few. (Wow!)

Also, did you know if your tenant’s deposit isn’t protected, or doesn’t continue to be protected after the end of the fixed term tenancy or upon renewal … you could be fined up to three times your deposit? With the average rental deposit in Ashford being £1,089, each self-managed landlord in Ashford could be fined £3,267 per tenancy if the deposit isn’t currently protected:

If every deposit of every Ashford self-managed landlord’s property weren’t properly protected, the total fines would amount to an eyewatering £5,790,921

Now of course, I am not suggesting for one minute that all the self-managed landlords of Ashford haven’t protected their deposits! And yet, on an almost daily basis, I come across horror stories to that effect. Another two (but by no means all) hot issues that the Courts are cracking down on, are doing immigration ‘Right To Rent’ checks on all tenants (yes all tenants) and confirmation proving the tenant received the ‘How to Rent’ guide. If that second issue cannot be proved (a ‘sent’ email won’t suffice), the landlord cannot regain vacant possession of his property via a section 21 Notice.

To many, it’s really a case of continuing to DIY or getting a qualified professional in – as those additional Ashford landlords mentioned above have done since 2014.

You might be thinking, “Of course you are going to say all this – you are a Letting Agent”. Well the choice really comes down to your time and your knowledge. If a Ashford landlord is not equipped, or able, to devote their time to keeping up-to-date with legislation or doesn’t want to be bothered 24/7, 365 days a year by reports of blown light bulbs, dripping taps, or to have that awkward conversation with their tenants about late rental payments, or arbitrate arguments and disagreements between your tenant and their neighbours, it is perhaps better to pass the responsibility and accountability onto a letting agent.

One thing I would say is that all letting agents are not the same. It might surprise you to know that letting agents aren’t currently regulated?

Ashford landlords that do use a letting agent should not forget that handing over management to a letting agent doesn’t mean they can disregard legislation – they are still ultimately responsible for deposit and rent repayment, legal directives, civil fines or other action if the letting agent makes a mistake. Therefore, it’s important to pick a reputable letting agent from the start.

Nevertheless, for those Ashford landlords that see their job as being a professional landlord and want to be intimately involved in the day to day administration of their rental properties it can be worthy, and profitable, pursuit.

If you are a self-managed landlord in Ashford and want to know if your tenancy paperwork is in proper order please feel free to drop me a line – I am more than happy to do an ‘MOT’ on it to ensure you are on the right side of the law.

Ashford Property Values 1.8% higher than 1 year ago – What’s the PLAN to fix the Ashford Property Market?

 

It’s been nearly 18 months since Sajid Javid, at the time the Tory Government’s Housing Minister, published a White Paper ‘Fixing the Broken UK Housing Market’, meanwhile Ashford property values have continued to rise by 1.8% year on year (for the council area) and the number of new homes being constructed locally has crept along at a snail’s pace, potentially creating a perfect storm for those looking to buy and sell.

That White Paper is important for the UK and Ashford people, as it is designed to ensure long-term stability and longevity in the property market as a whole. Ashford home-owners and Ashford landlords need to be aware of these issues in the report to ensure they don’t lose out and ensure the local housing market is fit for purpose. The White Paper wanted more homes to be built over the next couple of decades, so it might seem counter-intuitive for existing home-owners and landlords to encourage more homes to be built and a change in the direction of housing provision – as this would appear to have a negative effect on their own property.

Yet the country needs a diversified and fluid property market to allow the entire economy to grow and flourish … which in turn will be a greater influence on whether house prices go up or down over the longer term. I am sure no homeowners or landlords in Ashford want another housing crisis like we had in 1974, 1988 and, most recently, 2008!

Now, as Sajid Javid has now moved on to his new role as Home Secretary, James Brokenshire – the 17th Housing Minister in 20 years (a poisoned chalice or journeyman’s cabinet post?) – has been given the task of making this White Paper come alive.

The White Paper had a well-defined notion of what the issues were. The first of the four points it addressed was to give local authorities powers to speed up house building and ensure developers complete new homes on time. Secondly, statutory methods demanding local authorities and builders build at higher densities (i.e. more houses per hectare) where appropriate. The other two points were incentives for smaller builders to take a larger share of the new homes market and help for people renting.

However, lets go back to the two initial points of planning and density:

(1) Planning

For planning to work, we need a robust Planning Department. Looking at data from the Local Government’s Association, in Ashford, the council’s budget is above the regional average, spending £49.92 per person for the Planning Authority, compared the regional average of £38.14 per head – so meeting those targets shouldn’t be a problem.

What’s the Plan to fix the Ashford Property Market?

Also, 95% of planning applications are decided within the statutory 8-week initial period, also well above the regional average of 81% (see the graph below). I am pleased with the numbers for our local authority when it comes to the planning and the budget allowed by our politicians for this vital service.

What’s the Plan to fix the Ashford Property Market?

(2) Density of Population

An average of 2 people live in every hectare (or 2.471 acres) in Ashford

It won’t surprise you that 74,733 of the 117,956 Ashford residents live in the urban conurbations of the borough, giving a density of 19.1 people per hectare (again – much lower than I initially assumed), whilst the villages have a far lower average density of 0.8 people per hectare.

I would agree with the Government’s ambitions for more efficient use of land and avoiding building homes at low densities where there is a shortage of land for meeting identified housing needs, ensuring that the density and form of development reflect the character, accessibility and infrastructure.

It’s all very good building lots of houses – but we also need the infrastructure to go with it.

Talking to a lot of Ashford people, their biggest fear from further development is the lack of infrastructure for those extra houses (the extra roads, doctors’ surgeries, schools etc.). I know most Ashford homeowners and landlords want more houses to be built to house their family and friends … but irrespective of the density … it’s the infrastructure to support the additional housing and population that is just as crucial … and this is where I think the White Paper failed to go as far as it should have done.

Interesting times are ahead I believe!

1 in 21 Ashford Rental Properties Illegal to Let in 2018

 

As the winter months draw near and temperatures start to drop, keeping one’s home warm is vital.

With the prices of gas and electricity rising quicker than a Saturn V rocket and fuel costs taking, on average, 4.4% of a typical Brit’s pay packet (and for the lowest 10% of income earners, that rockets to an eye watering 9.7%), whether a tenant or homeowner, keeping energy costs as low as possible is vital for the household budget and the environment as a whole.

For the last 10 years, every private rental property has needed an Energy Performance Certificate (EPC) rating. The property is given an energy rating, very similar to those found on washing machines and fridges with the rainbow coloured graph, of between A to G (A being the most efficient and G the worst). New legislation comes in to force next spring (2018) for English and Welsh private landlords making it illegal to let a property that does not meet a certain energy rating. After the 1st of April next year, any new tenant moving into a private rented property or an existing tenant renewing their tenancy must have property with an energy performance rating of E or above on the property’s EPC and the new law will apply for all prevailing tenancies in the spring of 2020. After April 2018, if a landlord lets a property in the ‘F’ and ‘G’ ratings (i.e. those properties with the worst energy ratings) Trading Standards could fine the landlord up to £4,000.

Personally, I have the grave impression that many Ashford landlords are totally unaware that their Ashford rental properties could fall below these new legal minimum requirements for energy efficiency benchmarks. Whilst some households may require substantial works to get their Ashford property from an F/G rating to an E rating or above, my experience is most properties may only need minor works to lift them from being illegal to legal. By planning and acting now, it will mitigate the need to find tradespeople in the spring when every other Ashford landlord will be panicking and paying top dollar for the work needed to comply.

Whilst there will obviously be time, money and effort involved in upgrading the energy efficiency of rental property, a home that is more energy efficient will have greater appeal to tenants and other buy-to-let landlords/investors and this will enable you to obtain higher rents and, when you come to sell your investment, be reflected in the sale price.

So, how many properties are there in the Ashford area that are F and G rated?… well quite a few in fact. Looking at the whole of the Ashford Borough Council area, of the 6,849 privately rented properties, there are…

225 rental properties with an ‘F’ rating
95 rental properties with a ‘G’ rating

Proportion of Ashford rental property illegal to rent from April 2018

That means just over 1 in 21 rental properties in the Ashford and surrounding area has a current Energy Performance Certificate (EPC) rating of F or G. From April next year it will be illegal to rent out those homes with a new tenancy.

Talking with the Energy Assessor that carries out our EPCs, they tell me most of a building’s heat is lost through either draughty windows and doors or poor insulation in the roof and walls. So why not look at your EPC and see what the suggested improvements are to increase the energy efficiency of your property?

I can find the EPC of any rental property in Ashford, so irrespective of whether you are a client of mine, don’t hesitate to contact me via email (or phone) if you feel you may need some guidance on finding out the EPC rating or to find a reliable contractor that can help you out.

Is your rental property meeting the new minimum standards?

 

How energy efficient are your investment properties? From listed period cottages to modern state-of-the-art apartments, investment portfolios may include a mix of property types. More modern homes should, of course, have adequately rated Energy Performance Certificates (EPC), but, for landlords of older homes, did you know that as of 1 April 2018 it will become illegal to offer for let any property that has an energy efficiency rating lower than an ‘E’?

And that, from April 2020, the same standards will apply to existing tenancies?

These changes are being implemented as part of the government’s commitment to raise energy standards in the UK. I am concerned, though, about a general lack of awareness amongst landlords regarding these changes to minimum standards, which it is estimated will affect around 1 in 10 rental properties! There is also, understandably, concern about what impact this may have on an already stretched private rental sector.

If your rental property has an EPC rating lower than an ‘E’, improvements as listed within the Green Deal Schedule should be carried out in order to achieve that minimum ‘E’ rating.

The government has announced a grace period of 6 months to allow landlords time to undertake any necessary works, after which time the rental property must comply.

The position regarding listed properties and those homes situated within a conservation area is currently unclear, although exceptions have been made for buildings deemed to have special architectural or historical merit. What the regulations do state is “where compliance with certain minimum energy efficiency requirements would unacceptably alter their character or appearance,” a compliant EPC may not be required.

If you believe your property may qualify for exemption you can apply to the government operated PRS Exemptions Register, which is expected to be open as of October this year.

As the government is clearly fully committed to continuously raising standards of energy efficiency in the UK, I anticipate that this new minimum standard may well be revised upwards in the near future. During improvement works the property concerned may be temporarily uninhabitable and it would be prudent to avoid future loss of income due to any further void periods should more works to remain compliant be necessary.

Therefore, if a property does require improvement to achieve compliance I would advise any landlord to aim to achieve at least a ‘D’ rating.

Ignoring these new rules could result in a compliance notice being issued and/or a financial penalty of up to £165,000 – the potential penalties for non-compliance are therefore severe!

Every cloud has a silver lining, however – if you are thinking of adding to your property portfolio next year, there may well be opportunities as some landlords place buy-to-let properties with a low energy rating for sale, possibly priced attractively.

Should you have any questions at all on the new Property Minimum Standards, I will be very pleased to help – you can call me on 01233 663266 or email: robert@taylorslettings.co.uk.

Taylors Residential Lettings Limited, Company no. 6002742, Regd Office: Suite 1, Invicta Business Centre, Monument Way, Ashford TN24 0HB