In the clamour of competing headlines, property news continues to steal the limelight for many of the UK’s landlords. By keeping abreast of the latest changes, you can stay ahead of the game and help ensure that your buy to let business remains profitable.
So, let’s take a brief look behind some of those headlines.
Court rules Section 21 invalid without a Gas Safety Certificate
Any landlord should know of their responsibility for sharing with tenants the results of the obligatory annual gas safety inspection – after all, the requirement features in the latest version of the How to Rent handbook that landlords have to give to all new tenants.
But that annual gas safety certificate could prove even more critical to a landlord’s freedom of action following a decision of the County Court in Hastings, revealed a story by Propertymark on the 9th of January.
The case in point involved a landlord who installed a new gas appliance – a gas-fired boiler – just a day after new tenants moved in. Although the gas engineer who installed the boiler made sure that it was functioning safely, no gas safety certificate was issued.
When the landlord subsequently attempted repossession of the property by way of a Section 21 notice, the court ruled in the tenants’ favour that the notice was ineffective because the tenants had not been shown a copy of a valid gas safety certificate following the installation of the new appliance.
House prices fall 1.8% over the course of 2023
In its retrospective of 2023, Nationwide Building Society revealed that average house prices fell by 1.8% during the course of the past 12 months.
Its house price index for the year showed that average prices fell across the whole of the UK – where those in East Anglia dropped by as much as 5.2% – with only Scotland and Northern Ireland recording price increases.
Looking ahead to the new year, Nationwide is unable to foresee any marked improvement or activity in the underlying housing market. This is despite a gradual lowering of mortgage interest rates which has encouraged buyers even in the face of poor consumer confidence in the rest of the economy.
Scottish landlords want to sell up
In an article on the 8th of January, the website for residential agents, The Negotiator, reported that 100% of Propertymark member landlords in Scotland were thinking of quitting the buy to let market and selling their rental properties.
Landlords across the UK as a whole have been tempted to sell up and it is in Scotland, in particular where the buy to let bubble seems finally to have burst.
Commenting on the exodus of Scottish landlords, the Guardian newspaper on the 13th of November had pointed out that during the past year, rents have risen (by as much as 5.1% despite the rent cap that is in force in Scotland). The increases have been in response to harder times for landlords who struggle with steeper mortgage interest rates and more punitive tax regimes. Those landlords still in business are operating in a market with fewer rental properties available – so rents inevitably rise still further.
Landlords forced to take a hit on costs by asking lower rents
Further signs of the difficulties facing landlords were revealed in a story in Landlord Zone on the 9th of January.
It noted that the dwindling stock of rental properties had indeed driven steep increases in rent levels towards the end of 2023. Outside of London, rents in other parts of the UK rose by as much as 10% while those in the capital went up by around 6%. Further increases of 5% and 3% have been forecast for the remainder of 2024.
Despite these trends, however, landlords continue to struggle to maintain a profitable business – they still have (higher) mortgage repayments to make, of course. In order to attract dependable tenants, therefore, Landlord Zone has detected a marked number of landlords prepared to drop the price of their initially advertised rent. Such rent reductions have been recorded among 23% of all properties, according to the journal, compared with 16% of rented dwellings at the same time in 2023.