August might be “silly season” for the UK media, but this month’s property news could have a serious impact.
In our first story, we look at the PropTech startup that wants tenants to pay to view properties – and ask if this breaks rules on tenant fees.
Next, we ask how well the UK rental market is performing after the end of lockdown. Get the latest facts and figures in our second story.
In our third item, Airbnb has gone out to bat for the short-term rental sector after a summer of attacks by politicians. Will the platform’s proposed reforms silence their critics?
Fourth, a new survey reveals the things that letting agents love and hate most about their profession. Read on to see if you agree with them.
Agents, landlords, tenants and other industry stakeholders are invited to contribute to a new code of practice for block management. Find out how to make your opinion count in article number five.
Finally, for our regular charity feature, Paul Shamplina has announced the date of his next Rumble with the Agents charity boxing night. Find out how you can support a great cause by buying tickets for your office – or stepping into the ring.
Can letting agents charge prospective tenants to view properties? A new online viewing management platform is encouraging them to do so, kicking off a debate over whether this breaks rules on tenant fees under the stringent provisions of the Tenant Fees Act 2019.
Estate and letting agents can use ViewRabbit, the new service, to offer guaranteed early-access viewing times to tenants and homebuyers in exchange for a £30 fee. Paying viewers see the property before any free viewings take place, and they get their money back if they buy or rent the property. All fees collected during the first 30 days go to one of three national charities, after which agents can keep the income (minus a platform fee) or use it to boost their listings on the platform.
According to ViewRabbit’s founders, charging for viewings will reduce no-shows and give agents a valuable new income stream, as well as giving serious viewers a better chance of securing the property. However, some agents are concerned that it could be illegal.
The Chartered Trading Standards Institute responded to say that letting agents can charge for viewings if the fee is optional, as it is in this case. But the Tenant Fees Act only allows agents to charge certain kinds of expressly permitted fees, a list that doesn’t include viewing fees, putting even voluntary charges for a premium service into question. In light of that, agents charging a viewing fee to prospective renters could find themselves on the wrong side of the law.
But charging for viewings may still have a place in the UK property market. Even if asking tenants for a viewing fee is illegal, nothing prevents agents from asking homebuyers to pay. Even so, industry experts question whether it makes good business sense, or whether agents could use other options like virtual viewings or open houses to filter out non-serious applicants instead.
Now that the property sector is fully open again, what is happening to rents?
New research by property website Home has found that rents are rising in every region of Britain. This includes a small rise in London, where residential property investors took a hit during the pandemic due to renters leaving the city.
Estate agency Hamptons strikes a slightly less optimistic note. While they find that rents increased again in July, the rate of increase was lower than in June – and although London rents are recovering, they are still down 11% compared to last July. Even so, four of the UK’s 11 regions recorded double-digit percentage rent increases year on year, and the average national increase was still a speedy 6.2%.
At the most basic level, rents are driven by supply and demand, which makes the position very fluid. In the latest RICS Residential Market Survey published this month, letting agents report rising tenant demand in all regions of the UK in July compared to June. Fuelling the rise, homes for rent are in shorter supply than usual, and those that do come to market are snapped up at record speed.
Some of this heightened demand could be the result of would-be home owners temporarily being forced to rent, after being thwarted by a continuing shortage of homes for sale. Increasing numbers of home movers are using renting as a stop-gap while searching for the right new property, taking around 10% of new tenancies agreed this year. But if house prices keep rising, or supply stays low, it could be a while before they exit the private rented sector again – pushing up rents in the meantime.
Airbnb has hit back at claims that holiday lets are damaging local housing markets.
In a statement released last week, the short lets platform said it is an “economic lifeline” for its users that had generated £5.1 billion in UK economic activity in 2019 alone. That figure is likely to be even higher now: domestic tourism is booming this summer and many staycationers are planning to travel within the UK again next year.
Airbnb also promised policy changes to reduce its impact on local housing markets, pledging to suspend or ban landlords reported by local authorities to be evicting long-term tenants in order to free up properties for listing on Airbnb. In addition, the company has given its backing to a registration scheme for short-term rental properties.
Not everyone is convinced. Airbnb only made its statement after renewed calls for a crackdown on the holiday lets sector by politicians this month. A group of Conservative MPs representing tourist hotspots have asked the government to impose stricter rules and higher taxes on short-term rentals. Former Liberal Democrat leader Tim Farron launched a petition to ban owners from turning family homes into holiday lets or second homes. In response, rural Scotland holiday let providers have expressed their worry that new regulations could make their businesses unviable.
The popularity of Airbnb and other short-term rental platforms is helping to drive rising second home ownership, according to industry experts. The number of second homes in the UK grew by around 30% between 2013 and 2019. According to estate agents Knight Frank, demand grew further still during the pandemic as city-dwellers sought out rural retreats – a trend blamed for pricing key workers and other locals out of areas popular with tourists.
A new survey by PropTech provider RentProfile has revealed letting agents’ favourite things about their jobs – as well as the parts they could live without.
Agents reported that the best parts of lettings are all about working with other people. Helping tenants to find new homes came out as the clear highlight of the job. Meeting new people and working in a team with other agents also scored well. On the flipside, dealing with rude clients was among the biggest negatives for many.
Other downsides, many agreed, include time-consuming, repetitive agency admin, particularly when it stops them from focusing on the human side of the business. Possibly continuing in this vein, many survey respondents reported working long hours, including weekends.
Others pointed to the sector’s poor reputation with the public. A poll last year by Ipsos MORI found that estate agency is one of the least trusted professions in the country, scoring worse than bankers and only slightly better than journalists and government ministers.
The results are unlikely to surprise anyone with industry experience, but they do potentially reveal a way forward for agencies. Adopting tools and systems that cut back on repetitive admin and improve transparency may not just improve efficiency, it could also massively boost agents’ job satisfaction.
The Property Ombudsman and Royal Institute of Chartered Surveyors have asked agents, landlords, homeowners and tenants to contribute to a new Block Management Sector Code.
Among other issues, the draft code includes guidance for agents on achieving fee and service charge transparency, resolving tenant disputes, and working with residents’ organisations. It also sets out the level of service that leaseholders should expect from block management agents.
Leasehold arrangements can be controversial. Earlier this year, as part of the Competition and Markets Authority’s ongoing investigation into issues in the sector, major housebuilders agreed to no longer double ground rent and to refund leaseholders. (Contracts currently stipulate a doubling in the ground rent paid by leaseholders on set dates during the lease, leaving them facing high charges and making it difficult to sell or mortgage the property.) Encouraging agents and others to be more transparent about charges could help to avoid similar disputes in future.
The draft code was written by the Regulation of Property Agents (ROPA) Code of Practice Steering Group, set up a year ago last month. In addition to codes for various subsectors of the property industry, the steering group is mandated to produce an overarching code of practice for the entire estate and lettings sector. Signing up to this code could become a condition of receiving a licence to work as an estate or letting agent.
Agents and other stakeholders can read and comment on the draft Block Management Sector Code online now. The consultation will close on 14 September.
Paul Shamplina, founder of Landlord Action, industry speaker and regular on Channel 5’s Nightmare Tenants, Slum Landlords, has announced that his next ‘Rumble with the Agents' white-collar boxing event will take place on 6 December.
The series, which has already raised more than £100,000 for charity, had events cancelled in May 2020 and May 2021 due to the ongoing lockdown. However, this time it promises to be a night to remember.
Attendees can look forward to five fights, a charity auction and raffle, a three-course dinner and celebrity guest appearances – all in aid of charity Cherry Lodge Cancer Care. And if even a ringside seat isn’t close enough to the action, Paul’s team is still looking for property professionals to step into the ring. No previous experience necessary, training and headgear provided!
