‘Some three years ago critics doubted the strength of the Worcester’s residential development market which was being propped up to a notable degree by the ‘Buy to Let’ investment landlord, yet throughout 2006 new homes and apartments in Worcester achieved record-breaking prices of well over £300 per square foot. In 2007 new homes experienced a 12 – 18 per cent price inflation which, rather than deterring buyers, further increased demand. But this final steep escalation of property prices was imediately curtailed by sudden onset of the economic crises some two years ago which has shaken the foundations of the property market and which has been reflected by a drop in capital values of up to 35% in some areas.

How has this affected the residential rental market? Jonathan Sugden, a Fellow of the Association of Residential Letting Agents (ARLA) and Managing Director of one of Worcesters leading letting and management agents Simply Lets, suggested that a demand is still there, “There is little doubt that the Buy to Let investment market ended abruptly with the dramatic fall of property prices in 2008, however the stock of properties available to let has actually increased due to the needs of those unable to sell. The work place has become a harder environment in this climate and people looking for work have a need to be transient.  Some fluidity is essential to provide for movement of itinerent workers and those individuals or families who have personal needs.  When such home owners have been unable to sell they have looked to the letting market to provide a vehicle to facilitate their move”

Mr Sugden explained  “As values fell, there was initially a large influx of available property and it took some 6 months before the demand caught up, but it is evidently now a thriving market with Buy to Let landlords reconsidering their options. Whilst the levels of capital growth as seen in the boom years is not immediately likely, yeilds from property are being seen to be a better investment than money invested in the bank bearing in mind the prevailing low interest rates.  With property prices falling and repossessions increasing there are some opportunities for those who have cash investment sums to find respectable yeilds and a potential long term capital growth.”

Jonathan Sugden added “Apartment living took off in Worcester in 2002 with many of the major builders embarking on ambitious schemes of flat development through either new build or conversions of older properties. The beautiful waterside quater of Diglis, the city centre and smaller pockets of opportunity within the core city areas have all yeilded a diverse and interesting range apartments and due to the large number available, prices are suppressed. It is evident that these have recently been considered as suitable investment opportunities. Whilst apartments do have ground rents and service charges which negatively impinge on yeilds, purchased at the right price they are easy to maintain, relatively trouble free letting units which when managed correctly can retain good continuity of occupancy”.

Whether property prices now stabilise, increase or continue to suffer further slides, is uncertain. No one knows whether the Government has provided enough financial support to generate sufficient confidence to prop up the housing market on a longer term basis, but the investment market for property looks set for the time being to remain a viable option and qualified professional letting agents such as Simply Lets seem optimistic that long term investment in property is a worthy consideration.’

Article kindy authorised for publication 12/07/09

As the Government continue to advance the process of introducing licensing to the letting professionals market, the National Approved Letting Scheme (NALS) Licensing Consultative Forums have considered in some depth  the Communities and Local Government (CLG) Departments official response to the Rugg report issued on the 13th May. They are endorsing the Government reccommendations for the need for independant regulation of letting and management agents and hope to formally present policy recommendations to Cabinet representatives.

Caroline Pickering of NALS has expressed her wish for them to be the choice of the Government to carry out independant agent regulation “there can be no doubt that the mandatory regulation of lettings agents will propel the sector forward in achieving best practice, enhancing consumer protection and implementing increased provision and security for both tenants and landlords” she stated.

Over the last 10 years ARLA and NALS have been two of the professional bodies who have highlighted a requirement for tighter regulation and accountability.

The buy-to-let sector has bounced back in recent months, according to the Association of Residential Letting Agents (ARLA).

Comparing the second quarter of the year to the opening three months, there were nearly twice as many ARLA members who reported that landlords bought more properties.

One of the reasons cited for this increase was the record low interest rate set by the Bank of England’s monetary policy committee (MPC).

The MPC brought the base rate down to 0.5 per cent in March and it has stayed at that level for the last three months.

Operations manager at ARLA Ian Potter said: “Each quarter we glimpse a bit more activity as the bargains get snapped up and confidence is restored in buy-to-let as a viable long-term investment vehicle, particularly if the returns are rising too.”

Government officials are starting to realise that the private rented sector can play a vital part in the success of the overall property market, he added.

Just to remind landlords, as from 1 April 2009 CORGI ceased being responsible for administering gas safety requirements in the UK for let properties.  There has been little publicity regarding this fact but these important changes in the Gas Safety Legislation mean that from that date the Gas Safe Register takes over and any engineer planning to undertake work in Great Britain will need to be registered.

Gas certification undertaken up to that date by a CORGI registered engineer will remain valid however any future inspections must be carried out by someone registered with Gas Safe and the credentials of engineers verified.

The Health and Safety Executive reviewed the situation under CORGI and decided that there was a strong case for modernising the gas registration scheme to provide a clearer focus on gas safety.  For further information or additional clarification, please contact Simply Lets

ASSOCIATION OF RESIDENTIAL LETTING AGENTS LICENSING SCHEME

For some years concerns have been expressed both by professional organisations and the general the public about Letting Agents demonstrating poor ethics, fraud or committing criminal action in relation to client monies.  There has recently been public outrage after accusations have been levelled at directors of certain companies where it has become apparent that there has been abuse of the system resulting in substantial discrepancies in their client accounts. Unqualified agents rarely have any client protection. Sadly even as close to home as Worcester there are ongoing accusations of theft, misappropriation and money laundering in relation to the activities of one prominent company.

As a consequence of various examples of criminal activity there has been an increased demand for licensing and a tightening of working practices. Whilst licensing has always seemed sensible, it would appear this is now enevitable and all residential letting agents in the UK will soon need to be registered and licensed to continue trading. ARLA is promoting this and lobbying parliment, and in this regard the following ‘early day motion’ has been submitted by James Plaskitt

“That this House notes with concern that the private lettings sector is currently unlicensed, a situation which poses risks to both landlords and tenants; further notes that without rules and standards, many people could be putting their money in the hands of people who are not members of a professional body, not obliged to maintain separate client accounts with rent money and tenants’ deposits as well as other clients’ funds, do not offer consumer redress, are unlikely to have professional indemnity insurance, are not professionally qualified, or are not members of a tenancy deposit scheme; believes the licensing of letting agents is necessary to eliminate unprofessional, unqualified and unethical agents from the rental market, and to protect the consumer from unscrupulous letting agents; believes that the Association of Residential Letting Agents licensing scheme will provide a model that will drive up standards and can inform the Government’s thinking on the licensing of letting agents; and urges the Government to consider making the licensing of letting agents mandatory.”

 as of this morning this motion has been signed by 36 MP’s.

Please return to this news section of our web site for further updates

Landlords should be aware that the reforms regarding fire safety in tenanted properties are gathering pace and landlords will ignore these at their peril. 

It is clear that the 2005 Fire Safety Order makes it a legal requirement for landlords to carry out a risk assessment in the common parts of HMO’s and buildings containing flats and to provide whatever safety measures are necessary.

These new requirements are reasonably complex using definitions such as FD30 to relate a fire door and FD30s if the door requires a cold smoke seal. Fire alarm requirements also vary between those required for an escape route and those within individual flats.

Simply Lets are delighted to launch their new web site!

This new site incorporates many features to assist landlords and tenants to make letting and renting a property a smoother and easier experience.

Please browse the pages and if you have any observations or comments, we would be delighted to hear from you!