What will the Oxford rental market do in 2016?

Hmmm, yes, what will it do? So many changes to legislation, stamp duty land tax changes and yet more and more red tape thrown in front of landlords yet the private rented sector is a two way street and whilst the landlords are key to the market so is the demand and demand remains aplenty in Oxford.

The rental market has once again demonstrated consistent growth across 2015, paving the way for a solid 2016, despite a number of changes set to be introduced in the coming twelve months.

Homelet's November Rental Index showed the market has experienced significant annual growth in 2015. As of November 2015, the average UK rental value – excluding London – stood at £743, an increase of 3.8% compared against last November's figure of £718. This growth is consistent across the country, with nine out of twelve regions demonstrating an increase in rental prices on an annual basis.

Demand for rental property continues to grow, and looks as if it won’t falter any time soon. In the past year, house prices have risen by £20,000 on average, tipping the house value scale to an average of £287,000, according to Rightmove that is.

Rightmove has also predicted that during 2016, house prices will increase by a further £17,000; possibly making it increasingly more challenging for first-time buyers to save a sufficient deposit, meaning they could be likely to remain tenants or, if they aren't already, turn to renting instead.

This shift of potential home owners into the Private Rented Sector (PRS) has increased the size of the rental market exponentially in the past decade or so. Back in 2001 there were 2.3 million private renters in the UK, increasing to 5.4 million in 2014. Growth doesn't look like it’ll stop there, either. In the next ten years, it is estimated that a further 1.8 million people will rent privately, meaning that half of all UK residents will form part of the PRS.

Looking again to 2016, tenant demand doesn’t look as if it is going to subside anytime soon. You may recall my recent suggestion that landlords will move past the recent changes and soldier on and part of my reason for thinking this is because of tenant demand Vs supply especially in Oxford.

The general trend in the rental market is that prices will continue to increase in the New Year, although growth may not be recorded at quite the same pace. Global property firm Jones Llang Lasaalle has estimated that across 2016, the average UK rent is set to rise by 4.5% and an additional 4% in 2017.

This steady yet continuing growth is evident in many of the UK's high-end estate agents' predictions, too. Savills has predicted a similar rental growth, estimating that between now and 2020; rental values will increase by 16.5% They have also warned that it would be wise to be aware of the shift in demand for certain types of rental property too saying that in areas where the demand and supply imbalance is most concentrated, the demand for larger properties will be maximised next year.

Despite these figures forecasting further rental rises ahead in 2016, Homelet's latest stats have unearthed some interesting findings. An overwhelming majority (91%) of landlords we surveyed revealed that they don't intend on increasing rents in the first 6 months of 2016 (not too sure about that. I wont be following suit!)

Contrastingly, 34% of landlords claimed that they would increase their rents over the next year, this perhaps indicates that the stamp duty tax implementation, as well as the scrapping of the formal Wear and Tear Allowance, are forcing some landlords to charge a higher rent.

The majority of landlords we surveyed claimed that being able to retain good tenants was their biggest concern, this is why many are likely to incur just a marginal rent increase in order to increase the chances of keeping hold of their current tenants. After all a good tenant is more than half the battle.

House Price Index 2016 - A winning start for Oxford

You may recall my recent post with regards to projections for the housing market in 2016, and in particular how the recent changes to the PRS (private rented sector) would shape the buy to let market and in turn the market in general in both the long and short term.

Please see enclosed the short term results from 2016

https://drive.google.com/file/d/0BxT4ZuA72V-NeVlnZGxaZ3NOMzg/view?usp=sharing


Richard

The cost of DIY for landlords

Morning folks,

It is clear that changes to S21 eviction procedures introduced back in October 2015 are not being adhered to by some letting agents and landlords.

The increase in demand for buy to let investments since pension reforms were introduced last year, coupled with the rush to buy investment properties ahead of the April 1 stamp duty surcharge deadline, means some less experienced purchasers are failing to check their compliance with the Deregulation Act. http://www.legislation.gov.uk/ukpga/2015/20/crossheading/housing-and-development/enacted

This legislation outlines the areas that landlords need to ensure compliance of when dealing with new Assured Shorthold Tenancies after October 2015.

These were that a landlord or agent acting on their behalf must provide (before the start of a tenancy) copies of the energy efficiency certificate and gas safety certificate and a copy of the government’s How To Rent booklet. They must also provide evidence that the tenant’s deposit has been protected in a recognised scheme.

Failure to comply with these elements can impact on the landlord’s ability to serve a S21 notice in order to evict tenants; in addition, the act also puts restrictions on an agent or landlord servicing S21 notices where they haven’t responded appropriately to disrepair complaints from the tenant. In spite of the Deregulation Act being introduced almost a year ago and being enforceable against new ASTs since October, there are a worrying number of landlords who wish to evict their tenants but can’t due to their own mismanagement of the tenancy agreement. Perhaps of even more concern is that there are also otherwise 'reputable' lettings agents who are similarly not as compliant as they need to be or as not as legally tuned up as they suggest.

Most commonly landlords are failing to secure the tenant’s deposit in the stated timeframe or neglecting to ensure that the property is fitted with the necessary number of smoke and carbon monoxide alarms and checking them prior to the start of a new tenancy.  Agents, meanwhile, can slip up simply by not providing the tenant with a copy of the government’s prescribed information booklet.

In review it is therefore even more important to do one of two things as a landlord:

1. If you are to manage your property or portfolio yourself you need to ensure you are absolutely aware of your obligations and ensure you keep in tune with changes affecting the PRS (private rented sector) Legislation will not tolerate 'not being aware' of changes. 
2. Look very closely when appointing your letting agent. Resist the ever growing temptation to instruct them based purely on fees. It can and has been a very, very costly mistake for some.

 Free as ever if you want a chat people.

New licensing proposals for Oxford landlords

Afternoon all,

So here is the latest from the OCC on licensing for landlords:

LANDLORDS across the city could face new restrictions under plans to require licenses for thousands of homes in Oxford according to  reports in the Oxford Mail today.

Oxford City Council says it wants to extend its houses in multiple occupation (HMOs) licensing scheme to include all types of rented properties.

It requires landlords to make sure their properties meet fire, electric and gas safety standards and be in a good state of repair, with the council able to require them to make improvements after inspections.

The new scheme would apply to all rented properties in just 20 per cent of the city at first but the local authority could apply to the Government to extend it further.

It is estimated there are about 15,000 rented properties in the city, with about 10,000 not covered by a licensing scheme.

The council said it already carried out about 250 inspections of private rented properties each year, but had not decided yet whether it would require inspections of all properties before licensing them.

It is reported that landlords supported higher standards but warned extra costs would be passed on to tenants.

Since the HMO licensing scheme was introduced in 2011, inspectors have carried out almost 20,000 visits to properties and responded to about 3,000 complaints.

They have also placed 80,000 requirements for improvements on landlords, which the council estimates has led to more than £3.2m being spent. The council says it recognizes ‘good’ landlords and rewards them with lower fees, as well as five-year licenses. 

The meat of these proposals is, as of yet, unknown so no doubt there is more to follow on this and I will keep you posted as I hear more.