UK property news headlines have shone a light on the challenges facing landlords, raising issues that may affect the profitability of your buy to let business. There are also signs that professionals may be enhancing the social status of Houses in Multiple Occupation (HMOs) through their interest in such “shared living”.
As ever, of course, there continues to be a fascination with the ups and downs of average house prices.
Guidance: EV chargepoint grant for landlords
With effect from the 4th of August, landlords have been invited to apply for the government grants currently available for the installation of electric vehicle (EV) chargepoints in rental and leasehold properties.
The official guidance explains that each grant is worth up to £350 and is designed to cover 75% of the cost of installing a chargepoint – including those with multiple outlets – in the rented or leased property.
Landlords can apply for up to 200 separate grants a year for the installation of chargepoints in residential dwellings and up to 100 grants for commercial properties.
The grants are administered by the government’s Office for Zero Emission Vehicles (OZEV).
New builds far more expensive for landlords than existing homes
If you are a landlord looking to invest in buy to let property, would you choose a new build home or an existing property?
An article in Landlord Today on the 12th of August answered that question by pointing out that new builds are shooting up in price much faster than existing homes.
Compared with this time last year, a newly built house costs an average of £422,414 – that is 28% more than the £330,662 a similar property would have cost just a year ago. By contrast, during the same period, existing homes have risen in price by just 8% - to the current average of £272,851.
In some parts of the country, the gulf between new build prices and existing homes is even wider. If you want to invest in a new build property in Wales, for example, you’ll need to pay 34% more than 12 months ago - whereas existing homes have gone up by just 11%. In Scotland, new builds are 29% more expensive this year while existing homes are just 7% more expensive than this time last year.
Need to know: EPC rules for rented property
Towards the end of 2020, the government started talks about tightening the current Minimum Energy Efficiency Standards (MEES) for all property in the private rented sector.
Although any changes to the rules remain under discussion and no decisions have yet been taken, the National Residential Landlords Association (NRLA), in a posting on the 13th of June, advised buy to let owners to keep in mind the more or less inevitable move toward tighter restrictions and requirements.
The current regulations came into effect for all new tenancies in April 2018 and were extended to include all existing tenancies in 2020. These require any let property in England or Wales to achieve a minimum E-rated Energy Performance Certificate (EPC).
The proposed changes would see this minimum EPC requirement lifted from an E rating to a C rating to be effected in April 2025 and, three years later, for all existing tenancies – and the plans also envisage lifting the current cost cap for energy-efficiency improvements from £3,500 to £10,000.
More professionals embrace “shared living”
Could Houses in Multiple Occupation (HMOs) be poised for a move up the social scale? An article in Landlord Zone on the 11th of August seems to think so.
The article argues that HMO tenants from more professional backgrounds are now demanding better facilities – such as ensuite bathrooms, quality furniture and furnishings, high-speed broadband connections, and bigger rooms. As a result, HMOs are moving upmarket and acquiring a more attractive social standing.
In recent surveys of HMO landlords, almost half (48%) reported an increasing demand for improved facilities – reflected in a 45% increase in the number of professionals applying for tenancies in HMOs during the previous 12 months.
Around a quarter (23%) of landlords also remarked on the increasing level of interest from older and more affluent tenants.
House prices dip - it’s just the time of year, says Rightmove
Is the seemingly relentless increase in UK average house prices finally beginning to stall?
In a story on the 15th of August, Landlord Today detected a 1.3% fall in average house prices this month – the first monthly drop in prices for more than a year.
Citing figures maintained by the online listings’ website Rightmove, however, the article also reminded readers that August typically sees a reduction in average house prices – as has happened every such month for at least the past 10 years.