The Political Game Around Homeownership

Both Labour and the Conservatives are sparring over the state of the housing market.

As we hit summer next year, expect electoral promises around increasing housing supply and reintroducing schemes designed to kick start the housing market by enabling first time buyers access to the market, in return for your vote.

This political foreplay has already started with Labour promising to reinstate housing targets.

Emboldened by the current shambolic state of the property market, housing is an easy target to hit the Conservatives with. House price increases stoked by an unnecessary Stamp Duty holiday has left many struggling to now afford a home.

Even with recent price falls, without the low interest rate crutch buyers have become reliant on, many simply can’t afford the same property that they once could, if at all.

This is coupled with low supply levels of rental, social and affordable housing which aren’t due to be restocked anytime soon, due to the Government’s handbrake turn on targets, seemingly bending to the nimby’s middle class will, leaving many disillusioned with the Government and its policies that seem to neglect the many in favour of the privileged few.

Why aren’t the Government building more houses

What every political party knows is they can’t build 300,000 homes now. Build costs have increased whilst buyer affordability has gone down making it financial suicide to build more than is already in the works.

Unless developers are working on build to rent or eco-friendly, state of the art commercial property, they are stalling until inflation is stable and there is an election for a party to win using house building as the carrot.

Be it tightening green belt lines or developing brownfield sites, something will have to give, along with a few nitrates, but not until buyers can afford to buy.

Why homeownership is so important to politicians

Once on the ladder, studies have shown homeowners are more likely to vote and protect their asset’s worth, whilst also taking an interest in the area around it, than renters.

Historically, homeowners gravitated to voting conservative but after their dismal 13 year reign, the public has grown wise to their rhetoric.

Constant policy changes and broken promises have led even the nimby voters who have curtailed many a housing scheme, wondering how their offspring will ever get on the ladder, whilst also firmly remaining in denial about their own involvement.

Every party wants to be the party of homeownership for this reason but also because of the money they can claim via taxation from it.

The more house prices increase the better the “incoming” revenue.

Be it capital gains, inheritance tax or Stamp Duty.

In addition, homeowners generally spend more than renters, vital when boosting economic growth in times when inflation isn’t bloated.

What’s happened to house prices

Low interest rates had become instilled in a generation’s psyche. For the past 15 years interest rates have decreased in an attempt to stimulate growth.

Whilst failing with anything significant here it did bolster house prices with various initiates to bolster them higher (Help to Buy/Stamp Duty Holiday).

Post-Brexit, Covid and the current war, the BoE have voted consecutively, 14 times, to increase rates in an attempt to curb stubborn inflation.

The problem now being that many who own their property outright or have fixed at a lower rate are yet to feel this effect.

So the few are left with the cheque on behalf of the many who can already afford it.

This also results in a divided market where some need to sell, reducing house prices whilst others stubbornly hold out.

But don’t be fooled, all the parties have a vested interest in homeownership and opposition parties will be utilising the Government’s current pickle to their advantage.

Should the Government create schemes or encourage building before an election, the other party can say they were swayed by their political pressure.

The public are mere pawns in this political game for control. Both parties are saying the same things at different times with only one agenda – your vote.

Who gets it depends on who you believe will actually deliver.

Source: Property Notify

Halifax House Price Index: Housing Market Displays Resilience

Average UK house prices edged down slightly in July, with the monthly fall of -0.3% equivalent to a drop of around £1,000 in cash terms.

While this was the fourth consecutive monthly decrease, all have been smaller than -0.5%.

In reality, prices are little changed over the last six months, with the typical property now costing £285,044, compared to £285,660 in February.

The pace of annual decline also slowed to -2.4% in July, versus -2.6% in June.

These figures add to the sense of a housing market which continues to display a degree of resilience in the face of tough economic headwinds.

In particular, we’re seeing activity amongst first-time buyers hold up relatively well, with indications some are now searching for smaller homes, to offset higher borrowing costs, said Kim Kinnaird, Director, Halifax Mortgages.

Kinnaird continued, conversely the buy-to-let sector appears to be under some pressure, though elevated interest rates are just one factor impacting landlords’ business models, together with considerations of future rental market reforms.

It remains to be seen how many may choose to exit and what that could mean for the supply of properties available to buy.

Prospects for the UK housing market remain closely linked to the performance of the wider economy.

Several factors are providing support, notably strong wage growth, running at around +7% annually.

And, while the uptick in unemployment is likely to restrain that somewhat, it seems unlikely to reach levels that would trigger a sharp deterioration in conditions.

Expectations of further Base Rate increases from the Bank of England were tempered by a better-thanexpected inflation report for June. However, while there have been recent signs of borrowing costs stabilising or even falling, they will likely remain much higher than homeowners have become used to over the last decade.

The continued affordability squeeze will mean constrained market activity persists, and we expect house prices to continue to fall into next year. Based on our current economic assumptions, we anticipate that being a gradual rather than a precipitous decline.

And one that is unlikely to fully reverse the house price growth recorded over recent years, with average property prices still some £45,000 (+19%) above pre-Covid levels, Kinnaird concluded.

The UK Property Sector is Undergoing a Technological Revolution

The Geospatial Commission has identified opportunities where improved data and use of location services and applications can unlock innovation across the property ecosystem in a new report published today (1 August).

The UK property sector is undergoing a technological revolution, rapidly adopting new data-driven digital tools.

Location data, services and applications are central to this revolution and essential for a well-functioning property sector, from town planning and site identification to property management and retrofitting.

The UK property sector contributes an estimated £100 billion to the UK economy each year.

Applying a spatial lens is crucial to achieve the sector’s economic, social and environmental ambitions, boosting productivity and innovation, improving our residential areas and achieving net zero commitments.

Alexandra Notay, Independent Commissioner, Geospatial Commission, comments:

“The property ecosystem provides the infrastructure of where we live, work and play.

However, many of our interactions with the industry from planning to buying, renting and maintenance, remain stubbornly analogue.

We can all see the transformative potential and multitude of opportunities for the property industry to embrace emerging technologies and digital tools empowered by location data; yet a truly systematic approach to innovation and technology across our diverse and siloed asset classes and property types has yet to emerge.

This report can be a catalyst for enabling that change.”

The report highlights some key initiatives already underway across the property sector and identifies further opportunities where location data, services and applications can drive innovation across the property life cycle, including:

  • Further digitisation of the property buying and selling process and ensuring data interoperability underpins the end-to-end process
  • Growing deployment of green technologies, like solar panels, heat pumps, insulation and energy efficiency solutions, into our homes by supporting better understanding of where they could have the greatest impact
  • Improving productivity in the industry through greater re-use of location data collected and created during design and construction to reduce costs, and support better targeting and design of retrofitting interventions

The report sets out four cross-cutting themes to support the better use of location data, service and applications, including property as a complex interconnected system and the importance of a strategic approach to data access.

These themes arise from an understanding of the role of location data and services across different stages of the property lifecycle from land use and planning, design and construction, buying and selling, safety and operations to the broader themes of retrofit and regeneration.

Dan Hughes, Alpha Property Insight and Real Estate Data Foundation, comments:

“The property sector is at the heart of a thriving economy, our impact on the planet and a healthy society, and the effective use of data is becoming increasingly important in ensuring that it operates effectively.

The world is changing rapidly and so the depth and breadth of data used by property is growing equally fast and at the heart of this is high quality and trusted location data.

For many years, the UK has had one of the strongest property market data infrastructures which has been a key element in the UK being recognised as one of the leading global property markets.

As the world evolves, it is important that the approach to data does too and so this report, and the actions identified, are very welcome to enable the property sector to meet the needs of society, the planet and the UK economy.”

Lynne Nicholson, Head of Data, HM Land Registry, comments:

“HM Land Registry was pleased to work with the Geospatial Commission on this report which outlines the immense potential value of geospatial data for the UK economy.

As one of the governmental bodies which holds significant geospatial data, HM Land Registry is committed to unlocking its value and supporting its re-use by making it more FAIR, in alignment with the UK Geospatial Strategy 2030.

By sponsoring the award-winning Geovation Accelerator Programme, we are supporting the next generation of innovative Proptech start-ups using location data to revolutionise the property sector.”

The report is the first deliverable from the UK Geospatial Strategy 2030 that was published in June.

It supports two of the Strategy’s missions: embracing enabling technologies to accelerate geospatial innovation, and driving greater use of geospatial applications and insights across the economy.

UK Inflation Drops to 7.9%

This morning’s announcement from ONS regarding inflation dropping to 7.9% in the year to June will be welcomed news following the recent figures.

It means the rate of price rises in the UK has slowed more than expected, down from 8.7% in May.

The latest figures exceeded the market forecasts of a reduction to 8.2% and core inflation a key influencer on swap rates was also down to 6.9%.

Core inflation remains close to a 30 year high, which is the area the bank of England are targeting to bring down so we can should still expect more rate rises in August and potentially September.

The UK has the highest inflation amongst the G7 countries, but hopefully this marks the start of a downward trend and towards the government target to half inflation to 5% by the end of the year.

While it’s difficult to pre-empt market reaction, this will hopefully have a positive impact on future market forecasts, and a calming to the recent volatility in fixed rates.

It will take a few months before we see any substantial decreases in fixed rate pricing, the advice will be for mortgage holders unsure on their next move to speak to broker or their lender, commented Nicholas Mendes, Mortgage Technical Manager at John Charcol.

Commenting on the today’s inflation figures, Kevin Pratt, personal finance expert at Forbes Advisor says:

“Hard-pressed consumers and mortgage holders will hope the larger-than-expected fall in the headline rate of inflation might enable the Bank of England to take its foot off the interest rate accelerator when it announces its next policy decision.

They might have heard the good news about the falling energy prices, seen reports that food inflation has peaked and watched the business secretary demand supermarkets cut the price of petrol and thought a corner has been turned. And in some ways it has.

But the Bank’s main focus is likely to be the measure of inflation that strips out food and energy costs because of their inherent volatility – and this core figure shifted more modestly in June, edging down from 7.1% to 6.9% on the back of wage increases.

This doesn’t auger well for the August Bank Rate call.

We’re going to see the cost of borrowing increase on 3 August – the question is whether it will be an 0.25 or 0.50 percentage point increase in the Bank Rate to 5.25% or 5.50%.

Either way, this will result in more expensive mortgages, stretched household incomes and continued financial misery for millions.”

Chris Druce, senior research analyst at Knight Frank, comments:

“13 consecutive base rate rises by the Bank of England since December 2021 to tame inflation has taken us to 5%, and pushed the cost of borrowing to a recent high.

This has reduced buyers’ spending power, weakened sentiment in the UK property market and acted as a drag on activity .

Nerves are unlikely to be calmed and the outlook improved until buyers’ can gauge where the new peak in the bank rate will be, allowing them to plan accordingly.

Today’s fall in inflation is therefore important but a step on a journey that’s not yet complete.”

Saxo UK CEO Charlie White-Thomson, comments:

“Today’s year-on-year UK inflation print of 7.9% is a step in the right direction and evidence that the significant financial medicine in the form of interest rate hikes is taking effect.

The big number of 7.9% is still well off the ‘no ifs or buts’ 2% target and the cost of living crisis remains painfully evident.

With this in mind, we should prepare for a 25bp hike by the Bank of England on August 03.

The war to defeat inflation is not over and the Governor has nailed his colours to the 2% target.

Motor fuel prices led the largest downward contribution to the monthly change in CPI while yearly food remains stubbornly high at 17.4% according to the Office for National Statistics.”

Stephen Bryson, Independent mortgage and protection adviser at IFO comments:

“Inflation rates have fallen faster than many of us expected which will be a welcome update to the UK housing market.

Recent inflation increases have caused upheaval across the UK’s housing market, with the supply now exceeding the demand.

For those looking to buy, prices may be negotiated down, but we’re not actually seeing many downward valuations.

Ultimately, people still need homes, but higher interest rates and the cost of living will shift focus towards what people need rather than what they want.

As a result, more expensive houses will take longer to sell compared to an average priced ones.”

deVere Group’s CEO, Nigel Green, warns that the Bank of England will still raise interest rates despite cooling inflation:

The warning comes as fresh figures reveal that UK inflation fell to 7.9% in June, from 8.7% the month before.

He says: “Despite the data showing that the battle against inflation in the UK is being won, we expect the Bank of England will confirm it’ll continue with its aggressive interest rate hiking agenda at the monetary policy meeting on August 1.

Although the consumer price index fell to 7.9% last month, amid lower petrol prices and a slowdown in the pace of growth for food, beverages and other basics, the central bank officials will likely argue that there is still work to be done.

We believe the Bank will insist that although inflation is certainly coming down, it is doing so very, very gradually.

It remains sticky – still the highest in the G7 – and a long way from the 2% target.

They will say prices are still far too high and rising at a quicker pace than they have done in the past.

In addition, they are likely to cite strong wage growth in the three months to May.

Against this backdrop, we expect the Bank of England to increase interest rates for a 14th consecutive time at its next policy meeting – and we wouldn’t be surprised if there were a second consecutive 50 basis point hike.”

Another interest rate hike could “pile on more misery” for households, homeowners, and businesses.

Higher interest rates lead to increased borrowing costs, making mortgages more expensive. Homeowners with variable-rate mortgages are likely to face higher monthly payments.

Rising interest rates will also reduce disposable income as loan repayments increase, affecting household spending and overall economic activity.

Businesses reliant on borrowing may face higher interest expenses, which can affect their profitability and ability to expand or invest.

In addition, higher interest rates can reduce consumer spending, affecting businesses dependent on consumer demand.

Hiked interest rates typically negatively impact the value of existing fixed-income investments, such as bonds, as newer issuances offer higher yields.

The higher rates also historically lead to stock market uncertainty and increase volatility, as investors reassess the attractiveness of different investments.

Sectors sensitive to interest rates, such as housing, cars, and financial sectors, could experience greater impacts than others.

Green concludes: “We believe that although the battle to tame inflation seems to be being won, with the lowest reading in 16 months, the Bank of England is highly unlikely to be dissuaded from its course of rate hiking action for the time being.”

Source: Property Notify

Unprecedented Number of Section 21 Notices Shaping the Lettings Market

The looming threat of the abolition of Section 21 is raising questions over the future shape of the UK’s rental market.

National law firm Dutton Gregory Solicitors fears the change is already deterring swathes of private landlords, with Build to Rent giants coming out on top.

Dutton Gregory’s Landlord and Tenant department is processing an unprecedented number of Section 21 notices, which have been issued to tenants since the announcement of the planned abolishment.

The Ministry of Justice also recently reported that no fault evictions were up by 15.8% in the three months to March.

The Hampshire-headquartered law firm notes that this workload increase could be due to fear and uncertainty felt by private landlords.

A Section 21 notice, commonly known as a ‘no fault’ eviction notice, allows landlords to evict tenants without declaring a reason.

This is currently carried out through the accelerated possession process and does not generally require a hearing to be listed by the courts.

It gives landlords an automatic right to regain their property and an order can be obtained in a matter of 6-8 weeks in most courts outside of London.

As a result of the proposed abolition, the Government has said the grounds of Section 8 will now be strengthened, to allow landlords to recover their property. However, this hasn’t offered peace of mind to many buy-to-let owners.

Source: Property Notify

Renters Reform Bill Delayed Until Autumn

With parliament’s summer recess rapidly approaching, the upcoming parliamentary schedule does not have room for the second reading of the Renters (Reform) Bill, when MPs will be able to make amendments and ask questions to Housing Minister Rachel Maclean MP.

Scrutiny

While the Bill has not returned to the Commons for a second reading, the Levelling Up, Housing and Communities Committee has seized the opportunity to question Housing Minister Rachel Maclean and her team from the Department for Levelling Up, Housing & Communities (DLUHC) on the details of the Bill.

The committee asked questions about key policies, such as extending the Decent Homes Standards to the PRS and outlawing discrimination against tenants with children or receiving benefits, which were missing from the Bill despite being included in the government’s official guidance.

The expectation is that these policies will be added as amendments during the second reading, but there is concern from the industry that it will not leave enough time for proper parliamentary scrutiny of these important policies.

Bill’s provisions already filtering through

Meanwhile, there has been some movement from the government on some aspects of the Bill. Originally, a tenant that challenged a Section 13 rent increase in court could either be ordered to pay the new rent or get it decreased, whereas tenants could now face the prospect of the courts further increasing the rent.

This could help put off spurious challenges and reduce the potential number of court cases.

Also, under questioning from the committee, the DLUHC team gave new details on the proposed Ombudsman, including that it would operate as a non-profit and that they had not ruled out a combined agent/tenant/landlord redress scheme.

Agents need their say

“A lot of the important details are still up in the air,” says Neil Cobbold, Managing Director, PayProp UK, “And with the Bill not getting its second reading until at least September, this gives agents the summer to get organised and share their views with their MPs.”

As part of PayProp’s push to promote the views of lettings professionals as the government reforms the industry, the company hosted an informal roundtable discussion with Andrew Lewer MP, member of the Levelling Up, Housing and Communities Committee, and senior representatives from Belvoir, Dexters, Foxtons, Knight Frank, Leaders Romans Group, LSL Property Services, Savills, and The Property Franchise Group.

PayProp is also asking for the views of all letting agents in their survey, Life after the Renters (Reform) Bill, promising to present the results to the government, MPs and peers, to highlight the issues letting agents feel this Bill will create.

“We’ve already seen the government make changes based on feedback from the industry, so the more voices we have, the better the chance lettings professionals will be consulted on this bill and future changes to the industry,” concludes Cobbold.

Source: Property Notify

First-Time Buyers: A Brief Guide to Property Surveys

The homebuying process has come to be seen as one full of hidden costs, some of which people believe are unnecessary, designed only to line the pockets of the property professionals you meet along the way.

Surveys, however, are a worthy expenditure and one that we would always encourage homebuyers to consider money well spent. Better to spend £1,000 now than discover a property issue later down the line and end up spending £10,000 to fix it.

A study by the Royal Institute of Chartered Surveyors (RICS) revealed that 80 percent of homeowners bought a property without having a survey. This resulted in an average bill of £5,750 for unexpected repair work.

What is a property survey?

A property survey is a detailed assessment of a property conducted by a qualified surveyor.

As a homebuyer, surveys are designed to give you as much information as possible about the home you are buying, including any issues or defects.

The surveys will then offer possible solutions for the problems, alongside an estimated cost for the required work.

For the most part, surveys take place during the conveyancing portion of the homebuying process.

Do I actually need these surveys?

When you’ve already committed to a large spend for your house or flat, further expenses can feel difficult and unnecessary.

Property surveys are optional. You can go ahead and buy a home without them, but this could be a costly mistake. Surveys exist to help you avoid any unexpected or unwanted surprises that could require great expense to fix or could severely damage your enjoyment of living in the home.

So, while surveys do come at a price, they’re more than worth the cost because they help you make sure that the price you’re paying for the home is fair and reasonable.

Surveys are particularly important if you’re buying an old property, a property that hasn’t been on the market for a long time, or a property that has a thatched roof, timber frames, or is listed.

If major problems are uncovered, you may be able to use the information in the survey to negotiate with the seller. The most common type of property issues are as follows: –

  1. Asbestos
  2. Structural Movement
  3. Damp
  4. Japanese Knotweed
  5. Electrical Issues
  6. Faulty Drainpipes
  7. Roof Issues
  8. Woodworm and Beetle Infestation
  9. Insulation
  10. Flat Roofing

If your survey finds that you’ll need to carry out repairs costing £5,000 you could ask for a reduction on the property price to reflect this, or ask the seller to carry out the necessary repairs before you exchange contracts.

The three basic types of survey

Homebuyer Reports

This is a detailed survey and visual inspection of the home. It includes insights into the overall condition of the property from top to bottom and will highlight any clear and obvious problems.

Building Survey

This is a more comprehensive survey than the Homebuyer Report. It contains everything the Homebuyer Report does but then takes a deeper dive into the true condition of the property. This is the best survey to commission if you’re buying an old or unusual home.

Mortgage Survey

If you’re using a mortgage to buy the property, your mortgage provider might arrange for their own survey to be conducted.

This is not a true survey, rather a brief overview of the property and how much it is worth.

The lender wants to know that, should you default on the loan, the property is valuable enough to cover the money you owe them. Despite this survey being requested by the mortgage provider, there is still a good chance that you will have to pay for it.

A comprehensive guide to all surveys

RICS Home Survey Level 1 – Cost: £300-£900 – Takes around 1 hour to complete

This is the most basic and cheapest survey, perfect for those who are buying a conventional property in decent condition and constructed from common materials.

It will give a very simple overview of the property’s condition and highlight any glaring issues while suggesting how vital it is that each issue is addressed.

As with all surveys, the time and cost will vary depending on the size and type of the property.

RICS Home Survey Level 2 – Cost: £400-£1,000 – Takes around 3 hours to complete

This is the survey that most homebuyers choose. It’s a more detailed version of the above, containing everything from a Level 1 survey but also considering the roof and cellar.

The surveyor will also make recommendations for any further investigation if it’s required and provide advice on how much repairs should be expected to cost

RICS Home Survey Level 3 – Cost: £630 to £1,500+ – Takes up to one full day to complete

This is a full structural survey and the most thorough survey that RICS offers. This is a good choice if you’re buying an old property, 50+ years old, or if the home has an unusual design or is constructed using unusual methods and materials. It is the most expensive of the three RICS Home Surveys.

RPSA Home Condition Survey – Cost: £400-£900

This is the same as a RICS Home Survey Level 2 but is conducted by the Residential Property Surveyors Association (RPSA) instead of RICS.

Both bodies are fully qualified and accredited. It will also include information like broadband speed, damp assessment, and boundary issues.

RPSA Building Survey – Cost: £630-£1,500+

This is the RSPA equivalent of the RICS Level 3.

Source: Property Notify

Now is the Time for the Government to Resurrect Help to Buy

With the Bank of England’s rate rise to five per cent, soaring rents, and the cost-of-living crisis, now is the time for the government to resurrect Help to Buy, reports national law firm Dutton Gregory.

Many would-be first time buyers are having to put their dreams of home ownership on hold, creating further pressure on the rental market, where it is not uncommon for over 20 applicants per available property. Dutton Gregory Solicitors is calling for the reintroduction of the government’s Help to Buy initiative to stimulate the first rung of the market.

Housebuilders could also offer their own private alternatives, such as Proportunity, Fairview Homes’ Save to Buy scheme, and similar initiatives by St. Modwen Homes and Kettel Homes. Prior to the introduction of Help to Buy in 2013, Barratt and Bovis Homes also had their own versions, to help first time buyers with low deposits to purchase a new home.

“The Help to Buy scheme was extremely beneficial to first time buyers, housebuilders, and the overall health of the property market.

As it was self-funding, it should never have been scrapped.

With interest rates now at their highest level for 15 years, it should be reintroduced as soon as possible.

First time buyers are finding it much harder now, so there is a danger of a generation of young people being denied accessible home buying opportunities.

Meanwhile, the demand for rental properties far outweighs supply.

Prior to a decade of Help to Buy, there was Home Buy Direct and First Buy, so how is it right that there is no longer a government initiative to make home ownership a possibility for those without a substantial deposit?

The government’s First Homes initiative enables first time buyers that meet Local Authority criteria to secure a home for 30% – 50% less than its market value, but there are so few of these homes available.

As there is currently no sign of widespread first time buyer assistance on the horizon, the only way forward is for more housebuilders to introduce their own private schemes in order to convert those in the rental trap to new homeowners.

With a General Election on the horizon, I do believe the government will introduce a scheme similar to the previous Help to Buy within the next 12 months, but it’s needed now.

Housing developers are lobbying for its resurrection, but will they step up with their own initiative in the meantime?”

Help to Buy closed to new applicants in England last year, with the final deadline to complete a purchase having now passed earlier this year.

The most recent iteration of Help to Buy enabled first time buyers to borrow an equity loan to cover up to 20% (or in London 40%) of their property purchase price.

The latest government statistics showed that 383,903 properties were bought using the scheme between 1 April 2013 and 31 December 2022.

While there is a mortgage guarantee scheme and opportunity for a Lifetime ISA, there is currently no scheme backed by the government which offers the same accessibility and inclusivity that Help to Buy once did.

Source: Property Notify

What Does the Future Hold for The Lettings Market?

The past decade has seen significant changes in the private rented sector.

The sector has grown substantially, now housing approximately 20% of the UK population.

Alongside this expansion, there’s been a heightened emphasis on elevating standards within the sector, offering improved protections for tenants and recognising the continued commitment to professionalism from landlords and letting agents.

But what does the future hold?

Regulation and Compliance

Regulation and compliance are critical areas for the sector’s future.

Changes in legislation are increasingly likely, as policymakers seek to balance the needs of landlords, tenants, and the wider community.

One such change involves the regulations related to Energy Performance Certificates (EPCs).

The dates for these regulations have been frequently altered, causing confusion and uncertainty for landlords.

The current mandate states that, by 2028, all privately rented properties must have an EPC rating of C or above.

This is a major shift, demanding significant investment from landlords to improve energy efficiency.

This becomes particularly pertinent when considering that about two-thirds of homes in the PRS currently have an energy rating of D or below.

In numerical terms, this implies that over three million privately rented properties in England and Wales need enhancements to meet government targets.

But the drive for energy efficiency transcends mere compliance; it also elevates the attractiveness of properties to tenants. Higher-rated energy-efficient properties generally command higher rents and witness lower vacancy rates.

To navigate this dynamic landscape and ensure regulatory compliance, landlords and property managers must stay updated.

Proptech solutions, such as Helpthemove, are well-equipped to facilitate this, offering easy access to current legislation, guidance and best practices.

The Cost of Living Crisis

The cost of living crisis has been a significant talking point, with inflation, energy price hikes, and wage stagnation hitting tenants hard.

This is a significant concern for the lettings market. While landlords must cover their costs, there is a risk that rent increases will push properties beyond the reach of many tenants.

This, in turn, could lead to higher vacancy rates and lower returns for landlords. It’s a delicate balancing act, but one that the sector must navigate carefully, to protect both landlords and tenants.

Short-term vs Long-term Lets

Looking to the future, we can expect to see a shift in the balance between short-term and long-term lets.

The COVID-19 pandemic changed the way people work and live, sparking a rise in remote working and a desire for more flexible living arrangements, which has boosted demand for short-term lets.

However, the stability and security of long-term lets are still vital for many tenants, particularly families and older renters.

Neither short-term nor long-term will ‘dominate’ the market, instead we will see a diverse mix of rental options, tailored to meet the needs of different tenant groups.

This diversification presents opportunities for landlords and letting agents, who can differentiate their offerings and target specific segments of the market.

Technological Innovation

Technological innovation will continue to shape the lettings market. Proptech has already revolutionised many aspects of the sector, from property searches to contract signings.

The future will bring further innovation, as AI and machine learning are increasingly harnessed to predict market trends, optimise property management, and improve tenant experiences.

Forward-thinking landlords and letting agents will embrace these changes, leveraging technology to improve efficiency and service.

Tenant Expectations

We should also consider changing tenant expectations: The millennial generation, accustomed to the convenience of the digital world, are now a significant portion of the tenant population.

They expect seamless online experiences, rapid responses to queries and issues, and a high level of service.

Landlords and letting agents will need to adapt to meet these expectations, investing in systems and processes that deliver a modern, customer-centric service.

The lettings market is always evolving, shaped by changes in regulation, social trends, and economic conditions.

Source: Property Notify

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