Are you ready for the minimum energy efficiency standards for rented properties?

The new Minimum Energy Efficiency Standards (MEES) are being introduced next year and if you are a buy-to-let investor, you may be required to take action.

Over the last year or so, many experts have put out tips and reminders encouraging all landlords to take measures to ensure that their properties will comply with MEES.

The changes come into force from 1st April 2018 and at that point, it will be illegal to let or lease a residential or commercial property with a poor energy rating.

Buy-to-let landlords should now be addressing these upcoming changes to ensure that, depending on the volume of potential work necessary, the deadline to meet compliance with the regulations is met.

After the April deadline, properties that do not meet the minimum standards cannot be re-let until improvements are made. If the property is re-let, potential penalty fines of £5,000 for a domestic property and £150,000 for a non-domestic property could be levied.

The MEES were introduced with the aim of improving the energy efficiency of private rented properties. All buildings, domestic and non-domestic, in England and Wales are required to achieve at least an E rating on their Energy Performance Certificate (EPC) under the MEES scheme. This needs to be in place before they can be leased or rented.

If any improvement works have already been completed but they took place after the original EPC was issued, the property may already be up to the new standard required.

The government will be publishing detailed guidelines in October to clarify the new rules and the obligations of agents, landlords and others. This is expected to include news on a possible cap on improvements – an initial figure of £5,000 has been discussed, but not yet confirmed.

The rule applies to new tenancies and renewals only, but will be extended to existing tenancies by 2020. The Residential Landlords Association says it has now confirmed that listed buildings will be exempt, on condition that landlords have done as much as they are permitted to, to make them energy efficient.

Paul Carr Residential Lettings are working closely with our current, and future, landlords and we are busy advising them, if necessary, on the steps to take to ensure that they are compliant.

If you are currently a landlord, or are looking to rent your property, contact our Lettings Hub and find out all about our with you every step of the way service.

Know your gas safety responsibilities and protect your tenants

The Gas Safe Register have produced the following guide about landlords responsibilities for the safety of their tenants.


As a landlord you should be aware that you are responsible for the safety of your tenants. Your legal duties apply to a wide range of accommodation occupied under a lease or licence, including (but not limited to):

  • Residential premises provided for rent by local authorities, housing associations, private sector landlords, co-operatives, hostels.
  • Rooms, let in bed-sit accommodation, private households, bed and breakfast accommodation and hotels.
  • Rented holiday accommodation such as chalets, cottages, flats, caravans and narrow boats on inland waterways.The Gas Safety (Installation and Use) Regulations 1998 outline the duties of landlords to ensure gas appliances, fittings and chimneys/flues provided for tenants are safe.

Your responsibilities
If you let a property equipped with gas appliances, you have three main responsibilities:

  1. Maintenance: pipework, appliances and chimney/flues need to be maintained safely. Gas appliances should be serviced in accordance with the frequency given in the manufacturer’s instructions. If these are not available, you should ask a Gas Safe registered engineer to service them annually.
  2. Gas safety checks: An annual gas safety check should be carried out on each gas appliance/flue. This will ensure gas appliances and fittings are safe to use. There is a legal requirement on you to have all gas appliances safety checked by a registered engineer annually and you also need to maintain gas pipework and flues in a safe condition. This is UK law.
  3. Record: A record of the annual gas safety check should be provided to your existing tenants within 28 days of completion, or to new tenants upon the start of their tenancy. If the rental period is less than 28 days at a time you may display a copy of the record in a prominent position within the dwelling. You’ll need to keep copies of the record for at least 2 years.

    Additional info:
    If a tenant has their own gas appliance that you have not provided, you are responsible only for the maintenance of the gas pipework – not the appliance itself. It’s also a good idea to ensure that your tenants know where/how to turn the gas off and what to do in the event of a gas emergency. Last, but certainly not least, make sure anyone carrying out gas work on your property is Gas Safe registered – this is not only the law, but the most important step to ensuring the safety of your tenants.
     
    Any issues?
    Some landlord/tenant relationships can become problematic, and tenants may refuse to give you access to the property. If this is the case, you should have a previously drawn up agreement with the tenant allowing you access to the property to ensure any maintenance or safety work is carried out. You’ll have to take (and demonstrate that you have taken) all reasonable steps to ensure the work is carried out – this can involve giving a tenant notice. If a tenant does refuse access, be sure to keep a record of any action taken as you may need this at a later date. The Gas Safety (Installation and Use) Regulations do not give powers to force disconnection of the gas supply in these circumstances and you may need to seek legal advice.



Government spells out fire responsibilities of private rental sector

A minister at the Department of Communities and Local Government has set out the government’s position in terms of the fire-related responsibilities within the private rental sector.

Junior minister Marcus Jones, answering written questions this week, said:

All homes should be of a reasonable standard and all tenants should have a safe place to live.

“Under the Landlord and Tennant Act 1985, landlords have a general obligation to ensure that they keep in repair the structure and exterior of any property they rent out.

Local authorities have strong and effective powers to deal with poor quality unsafe accommodation and we expect them to use those powers.

“Under the Housing Health and Safety Rating System, local authorities can issue an Improvement Notice or a Hazard Awareness Notice if they find a defect in the property.

In extreme circumstances, the local authority may decide to make repairs themselves, or to prohibit that property from being rented out.

The Regulatory Reform (Fire Safety) Order 2005 places a duty on housing providers to undertake a fire risk assessment of the common parts of their properties and to put in place and maintain adequate fire precautions to manage the risk that lives could be lost in a fire. The Order is enforced by fire and rescue authorities.

Other questions and answers relating to fire safety and Grenfell Tower can be found here.

If you have any queries relating to rental properties and the law, please contact our Lettings Hub.

Rise in number of retirees in rented accommodation

According to new research, there has been a large increase in the number of retirees renting homes over the past decade.

The study, conducted by letting agency Countrywide, showed that retirees have paid a total of £3.7bn in rent over the past 12 months, which equates to an increase of 200% when compared to the £1.2bn paid in 2007.

Retired people now account for 8% of all private tenants, which is up from 5.2% ten years ago. This could be attributed in part to changing perceptions and attitudes regarding renting in the older generation.

Further research by Strutt & Parker and Octopus Healthcare showed that one in five baby boomers would consider living in a professionally managed rental property.

Their survey highlighted that there are several reasons as to why the over 65’s want to downsize in their retirement. The top three reasons were requiring more support (34%), lower property maintenance  (33%) and more accessible home with fewer stairs (26%). Other reasons were wanting to live in a smaller property, reducing their outgoings and having a smaller garden.

Problems may arise though as 42% believe there is a lack of suitable properties in the UK to downsize into. Strutt & Parker state that there is clearly a need for a new breed of retirement communities in the UK.

Renting/letting jargon – A-Z

The property world is full of words and expressions that may be unfamiliar to anyone who is not regularly letting or renting a home.

This guide will help to shed light on what they all mean.

Absent Landlord
A landlord described as absent is one who cannot be contacted. If the lessees wish to create a Right To Manage Company but are unable to contact the landlord, they are free to make a legal application to acquire the right to manage.

Administration Fee
A payment which is charged to cover the costs of processing a property rental application. This is paid by the tenant and will be taken from the initial monies once the tenancy starts.

Agreement Fee
A payment which is charged to cover the costs of drawing up a tenancy agreement. This is usually shared between the landlord and tenant.

ARLA Propertymark
The Association of Residential Letting Agents, the UK’s foremost professional body for letting agents.

Assured Shorthold Tenancy (AST)
A widely used rental agreement where the tenant is an individual and net rent does not exceed £25,000 a year. It covers a fixed period, so both parties know the date the property will be vacated.

Break Clause
A clause sometimes agreed between the landlord and tenant to be inserted in a fixed term agreement, typically if the initial fixed term is for a year or more. A break clause will usually allow either landlord or tenant to give written notice after a particular date or period of the tenancy in order to end the tenancy earlier than the original fixed term.

Credit Search References
References requested for a tenant applying to take up rented accommodation. Many agents and individual landlords use external companies who will contact the applicant’s employer, landlord and check the tenant’s credit history, providing a report on their financial suitability to rent.

Deposit
A monetary sum held by the landlord or agent for security against damage to a property or a breach of the tenancy terms. This is usually the equivalent to six weeks’ rent but may vary. If the deposit is for an Assured Shorthold Tenancy (AST), then it must be protected by one of the approved tenancy deposit protection schemes.

Dilapidations
Items that have been damaged during a tenancy. The tenant is usually responsible for the cost of repair or replacement.

EPC
The Energy Performance Certificate (EPC) shows the energy efficiency and carbon emissions of a property and gives an indication of the fuel bills. It is displayed as two graphs, the energy efficiency and environmental impact of the property. Each is graded from A (the best) to G (the worst).

sale is binding and no terms may be altered.

Fixtures and Fittings
Items usually provided in a letting that may include curtains, carpets, blinds, light fittings, kitchen units and appliances. In some cases it may also include furniture. It is advisable to check what is provided and not to assume that items will be provided.

Gas Safety Record
A certificate that states all gas appliances, pipework and flues are safe. It is a legal requirement for all landlords and must be provided every year by a Gas Safe registered engineer after a safety check.

Inventory
A list of the contents of a rental property. The inventory will note the condition of items and will form the basis of a dilapidation report at the end of the tenancy. It often includes photographs of specific items and existing damage/defects.

Lease
The legal document governing the occupation by the tenant of a premises for a specific length of time. At the end of the period the property reverts to the owner.

Listed Building
Buildings of special architectural or historic interest. A listed building may carry certain obligations and restrictions governing its use, repair, and maintenance.

Maintenance Charge or Service Charge
Many leasehold properties (especially flats) are subject to such a charge which pays for items such as the insurance and maintenance of the building.

Maisonette
A flat with its own private entrance.

Multiple Agent Instructions
Where more than one letting agency firm is instructed by a landlord to offer a property to rent.

The Property Ombudsman
The Property Ombudsman offers a free and independent service for resolving disputes between sales and letting agents, which are members of The Property Ombudsman, and buyers/sellers of residential property in the UK.

Sole Agent
Where only one letting agency firm is instructed by a landlord to offer a property to rent.

Tenancy
Possession of a property by a tenant under the terms of a lease.

Tenancy Agreement
The legal agreement governing the occupation of a property by a tenant.

Tenancy Deposit Scheme (TDS)
An insurance-based scheme run by The Dispute Service Ltd. for the protection of tenancy deposits and the resolution of disputes between landlords, agents and tenants concerning the return of deposits at the end of a tenancy. It is one of three schemes approved for tenancy deposit protection.

Tenant
The person who has temporary possession of a property under a lease or tenancy agreement.

Right to Rent could impact those without a British passport

According to the Residential Landlords Association (RLA), almost 20% of British citizens could find it harder to access rental property.

The industry trade body surveyed over 900 landlords and reports that 44% of them said they are less likely to let homes to tenants without a British passport.

Currently 17% of British people do not own a passport and this means that gaining access to housing in the private sector may become more difficult for them.

The government’s Right to Rent scheme has been in operation since February 2016 and the RLA has been researching its impact.

Under this legislation, landlords, or letting agents acting on their behalf, are required to check the immigration status of all prospective tenants.

The survey found that over 50% of the participants are now less likely to consider letting to people who are currently living outside of the UK.

Also, 22% said that they are now less likely to let to EU nationals or those from the European Economic Area.

What are the biggest causes of deductions from rental deposits?

When renting out a property, most landlords – or their letting agents – opt to take a deposit from the tenant(s) prior to the tenancy starting.

Deposits offer a level of protection to landlords, meaning that, if the tenant breaches the terms of the tenancy agreement, they can them make appropriate deductions from the deposit.

Clear property damage, poor cleanliness or anything that is different from the property’s original state, which is easy to identify if there is an inventory management report and a schedule of condition in place at the start of the tenancy agreement, will enable the landlord or their agent to rightly off-set the compensation from the tenant’s deposit.

Research by interior specialists Hillarys, part of ongoing research into the habits of Britons and their attitudes towards renting, showed that top reasons that tenants were given for why they had lost part, or all, of their tenancy deposit.

Marks on the walls, carpet stains, the need for redecorations and mould were among the five most common reasons listed as to why tenants had had money deducted.

Broken furniture29%
Marks on walls24%
Carpet stains21%
Redecorations12%
Mould9%

Spokesperson for Hillarys, Tara Hill, said:

Security deposits are an unavoidable part of renting a property, and can be an essential way for landlords to deal with damage caused by tenants. But they can result in disputes and are a major cause of distrust among tenants.

Whilst there appears to be an issue around the lack of trust when related to deposit protection, according to the research, Paul Carr Residential Lettings use The Tenancy Deposit Scheme (TDS), which is run by The Dispute Service under a government awarded contract.

For further details in regards to The Tenancy Deposit Scheme and the guidelines Paul Carr Residential Lettings follow, please see our Tenant’s Guide.

Quarter of households will be private renters by 2021

According to new research, the proportion of households living in the Private Rented Sector (PRS) will rise to 24% over the next four years.

The Knight Frank Multihousing Report has suggested that some 5.79 million households will be private renters by the end of 2021.

The survey of over 10,000 tenants revealed that 68% expect to still be living in the PRS in three years’ time.

The young professional demographic, 25-34-year-olds, make up the largest proportion of private renters.

The biggest concerns for tenants are affordability, location and then the rental property itself.

Tim Hyatt, head of residential lettings at Knight Frank, said:

The flexibility that renting offers has reinforced its popularity as both a sensible and accepted solution for young couples without children and those living on their own but also highlights an expected rise in older households over the next five years.

The number of people renting out of choice rather than due to affordability of ownership constraints is an interesting indicator of how the market will continue to thrive in terms of tenant demand.

Institutional investment in the PRS is set to rise to £70 billion over the next five years, according to the research. The changes in recent years, including the 3% stamp duty surcharge and the restriction of BTL mortgage interest tax relief, have made institutional, large scale investment in the PRS more appealing.

If you are currently a landlord or are looking to invest in a rental property, please contact our Lettings Hub and find out how we are committed to getting you the best rental value for your property.

Almost half of BTL landlords are looking to expand their portfolios

Almost half of buy-to-let landlords are looking to expand their property portfolios, according to a new poll.

The Mortgages for Business’ Property Investor Survey revealed that, despite the existing phasing out of mortgage tax relief and the introduction of the 3% stamp duty surcharge last year for those acquiring an additional home, including a buy-to-let property, 48% of landlords are currently looking to add to their portfolios.

This figure is up from 45% in November and 41% a year ago.

The study, which was carried out over a two-week period last month, had landlords answering questions about their portfolios.

Steve Olejnik, chief operating officer of Mortgages for Business, said:

“Although we expect buy-to-let lending to reduce somewhat this year, these results demonstrate that landlords are a resilient bunch, capable of adapting their investment strategies to successfully accommodate the new fiscal and regulatory landscape.”

The research found that 62% of landlords have been adapting to the changing environment by consulting tax advisers in regards to recent tax amendments and 42% of investors are currently opting for longer fixed-term mortgages.

He added:

“Incorporation is becoming a standard practice and the move towards five year fixed rates allows landlords to maximise their borrowing options.”

If you are looking to invest in the North Birmingham, Sutton Coldfield or South Staffordshire areas, please contact our dedicated Lettings Hub to start your property journey with Paul Carr Residential Lettings.

Landlords – are you interested in appearing on TV?

Are you a landlord? Do you own 10 or more properties?

Boundless Productions, the makers of Grand Designs and Escape to the Country, are making a documentary series for BBC1 and are looking to feature landlords/property investors at the top of their game.

They would like to show how landlords grew their property business and what role as a successful landlord they now have in the ever increasing rental market.

As a way of exploring how the rental market is changing, each landlord will spend a week as a tenant.

Can you remember being a renter?  How have things changes since you were last renting? Now tenants are renting for longer, how have their needs and expectations changed? Could seeing things from the other side help improve your business?

Filming in soon and the production company are looking for a number of landlords to take part. Applications are open to all.

If you would like to find out more, email the production company at:
laura.neal@boundlessproductions.tv.