5. How could Government encourage landlords to
improve the quality of their rental homes?
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0%
Other
Make 'improvements' to
a rental property tax
Greater tax allowance
for furnishings
Greater subsidies for
energy efficient
investment
6. Have you heard of the Green Deal? Do you
understand it?
55% - No
33.5% - Yes, but don’t know
much about it
11.2% - Yes & understand
0.7% - Going to take action
7. Should it be mandatory for letting agents to have
formal qualifications before handling funds?
75% agree or strongly agree
10. What one thing you would like the
Government to do to improve the
Private Rental Sector?
11. No answer 20.99% Don’t know / nothing
Legislation 30.39% Regulate agents / landlords / the
sector
Increase protection against bad
tenants
Simplify regulation
Abolish or improve HMOs
Financial aid
for landlords
37.02% Tax benefits / relief on furnishing
or green measures
Incentives to invest / make
borrowing easier
CGT
12. MISC 3.04% No VAT on agency fees
Educate LLs about Green Deal
Cap rents
Create a grading system to help
determine percentage of deposit
deduction
Relationships 4.14% Encourage attitude that renting is a
viable alternative to buying
Ensure equal rights for tenant and
landlord
Build a database of bad landlords
and tenants
Property
standard
4.97% Annual inspections
A universal minimum standard
13. Investment Opportunities &
Trends in Oxfordshire
Seeing the wood for the
trees: deciphering property
propaganda
Panel Discussion: What
next for the PRS?
Editor's Notes
This is our first survey which we have conducted to find out our clients’ opinions on the private rental sector. We had a great response, with 415 people taking part.
54% investors 36% homeowners (it’s your own home or an annexe of your own home) <2% corporate 8% ‘other’ Half have 1 property 40% have 2-5 properties Remaining 10% have more than 5
Are you planning to buy more rental property in the next 6 months? * Large percentage not looking (70%) * Just under 20% are interested but not actively looking * Just over 10% are actively looking * Less than 1% are waiting for prices to fall In a sample of around 400 this is pretty much what we expected
OF THE CLIENTS LOOKING TO BUY 85% looking in or around Oxfordshire, 13% in London and 25% elsewhere ‘ Elsewhere’ – all over UK with no one place being mentioned more than once The next topic, presented by Frank, should certainly be of interest to many of you as he’ll be covering developments around the county Nearly two thirds of those looking to buy suggested they would be putting down a deposit of less than 50% A third would be mostly cash buyers, with more than 75% deposits THE VAST MAJORITY OF THESE RESPONDENTS WOULD BE LOOKING TO LET THEIR PROPERTY OUT FOR MORE THAN 5 YEARS (86+%)
80% wanted to make ‘improvements’ to a rental property tax deductible 40% wanted greater subsidies for energy efficient investment - more on that on the next slide 30% felt greater tax allowance for furnishings was important *Important to mention that maths has not gone out of the window: we know that those percentages add up to more than 100, but the reason is that respondents were allowed to choose more than one answer if they wanted Of the 9% ‘other’ responses common themes were: * To introduce a legal minimum standard * To take away bureaucracy * To review capital gains tax
Interestingly, despite 40% of respondents wanting greater subsidies for energy efficient investment, 55% of the respondents did not know about the Green Deal and 34% were aware of it but did not know much about it. This doesn’t say much for the government’s £16million spend on administrating and marketing the scheme! This ties in with recent figures released from the Department of Energy & Climate Change (DECC) which show that by the end of August this year only 372 households had actually signed on the dotted line and only 12 had taken out a loan and had the work done. Under the scheme, householders can borrow money to install double-glazing, insulation and more efficient boilers. The savings they make on their energy bills should outweigh the cost of repayments. However, if a house or flat is subsequently sold, the loan transfers to the buyer. This will be covered a bit more in the panel later on
Just over 75% agreed that it should be mandatory for letting agents to have formal qualifications before handling tenant or landlord funds Not too surprising and it’s something that we absolutely agree with too That is why we have invested a lot in training our staff and that is why 79 members of our team have the NFoPP Technical Qualification in Residential Letting & Property Management
We were surprised by this result, but we assume the reasoning is that a) All of our clients are good, conscientious landlords, and b) the respondents feel that being regulated would make their property more desirable to tenants In theory we agree: regulation could reduce the number of rogue landlords and improve the reputation of the letting market. However, with lack of enforcement this would just be an unnecessary regulation on those who already comply with the rules. Fees would probably be passed on to tenants or result in properties being sold, which is counter-productive. Oxford City Council introduced mandatory licensing for Houses of Multiple Occupation (HMOs) in January 2011. As of one year ago (October 2012) only 1,948 HMOs had been licensed, despite there being an estimated 5,069 HMOs in Oxford. As of April this year, only 34 landlords have been successfully prosecuted or issued a formal caution. In total, landlords have been ordered to pay just over £55,000 in fines. Our question: is the licensing being enforced? The issue of legislation and enforcement will be discussed later on by the panel
Nearly 68% of respondents said that they didn’t think tenants should have the right to demand a 3 or 5 year tenancy – something we are quite relieved to hear! One landlord even said “The great thing about the private sector is its flexibility and any interference like giving tenants the right to demand longer leases will reduce flexibility and supply.” However, just last week the Community Secretary Eric Pickles announced his ‘Tenant’s Charter’: a measure to raise standards in the private rented sector. One of his proposals is for longer fixed term tenancies, which are great for giving greater stability to tenants. However, we would be wary about moving towards a more European attitude to tenancies where leases can be for a minimum fixed term of 3 years (as they are in France) or unlimited (as is the dominant form of contract in Germany) with little rights for the landlord to get the property back. Again, this Tenant’s Charter will be discussed more by the panel later on.
Now we know that this might slightly overlap with the question about improving property standards, but there were some other interesting suggestions
FINANCIAL AID LL: Perhaps it’s not surprising that the most common suggestions were related to financial aid. One landlord wrote: “ If all landlords sold up the country would be in a real mess and we are being taxed for taking this risk and for having money tied up in this long-term investment” LEGISLATION: Many people responded with suggestions of regulation, although several felt that it is not the government’s role to improve the rental sector. One landlord even wrote: “The only sure thing you know about regulation is that it does not do what it is intended to do. It’s nigh on impossible to design the right regulation – I speak as someone who spent 15 years working in regulation!” another wrote: “Current legislation such as health and safety is over-prescriptive and any extension should bear in mind that landlords do not have a bottomless pit of money and generally have limited time available”
MISC: Interesting suggestion about capping rents; a topic which will feature in the discussion panel RELATIONSHIPS: An interesting category of answers, and perhaps some of these could be fulfilled by regulating letting agents STANDARDS: Again, mentioned earlier and will be discussed in the panel. Smaller percentages (less than 2%) mentioned: financial aid for tenants, supply of housing and tenancy length
Up next, Frank Webster will discuss investment opportunities & trends in Oxfordshire Then our first special guest, Graham Norwood, will e xplain why house price reports differ and which statistics you should trust to guide your major decisions in the property market Finally, our panel will discuss the Commons Select Committee’s recommendations for the Private Rental Sector including many of the topics which came out of this survey, such as long term tenancies, licensing landlords and capping rents
