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December 2023

Monthly news for landlords brought to you by:

Dear Ms Rayner…. Associate director Nik Kyriacou gives his assessment of The Renters' Reform Bill's second reading. Last month the Renters’ Reform Bill finally received its second reading in the House before moving to committee stage.

would suggest anyone involved in the sector, just wants clarity and to be able to move forward with certainty.

Unsurprisingly it was a fiery exchange between the government and the opposition benches not least as a result of some of the key issues having been abandoned since its first reading.

With that in mind I decided to write to Ms Rayner, outlining some key concerns and asking if she would meet me to discuss these issues.

This included the abolition of Section 21 ostensibly because the court system was not equipped to process the claims quickly enough. However Angela Rayner MP, Labour’s opposite number to Michael Gove MP, was having none of it and suggested it was a “grubby deal” done with those backbench Tory MPs who were themselves landlords. This to-ing and fro-ing of key pieces of proposed legislation ignited once again frustration amongst the sector. Landlords, tenants, agents and indeed I

In the letter I explained how I’d had a less than impressive response from the government following my letter to Mr Gove and our meeting with one of our local MPs, Nadhim Zahawi. What follows is the bulk of the letter. “Firstly, as Mr Gove said, landlords are a good thing. They provide a service and an important one. Not all are bad, as was also agreed during the debate. However the proposals as they stand will not in my view address the bad apples, but rather encourage the good ones to leave – which will have a hugely damaging effect on the sector, most notably for tenants, many of whom will find themselves struggling to find

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alternative accommodation and/ or higher rents, or may indeed find themselves homeless. This is surely not what the Bill intended to do. “Landlords are already exiting the sector – for many reasons, not least the continuing uncertainty surrounding the details within the Bill. Too much dithering, last minute changes and u-turns have left thousands feeling they have no choice but to cash in their chips. “This spells bad news for tenants for the following reasons: the rental properties are not automatically re-let. Many will be sold within the residential sales market, thus reducing the number of rentals available. This will push rents up as tenants compete for a reduced number of properties. Those who can’t afford the rents will end up homeless. All this as a direct consequence of the Bill.

“Figures back this up. Recent research by Hamptons shows there is likely to be a net loss to the private rental sector of 30,550 homes in 2023, meaning landlords will have sold 297,390 more homes than they bought since 2016. Simply building more homes is also not a straightforward answer as most will likely go for private sale, penalising tenants yet again. “There needs to be a balance – to ensure landlords are given a reason to stay in the sector and provide the service they want to give, that of providing a safe, warm, dry and secure place for their tenants to live. “Given your party is likely to be forming the next government, and you are the minister responsible for housing, it is crucial you are given all the facts so some amendments can be made to the Bill to ensure it

is fair for landlords AND tenants. As it currently stands, the proposals within the Bill are akin to using a sledgehammer to crack a nut. Without landlords the sector will collapse. “I look forward to hearing from you.” Needless to say I’ve not had a direct response from her, merely her private secretary to say it’s being considered. I maintain the private rental sector is a good place to invest but we need engagement with our elected representatives and need to know they are listening to us all. I would like to think Ms Rayner will do us the courtesy of responding and granting us a meeting. I wait with baited breath!

Lacklustre autumn statement delivers little for PRS Nik Kyriacou gives his verdict on the chancellor’s autumn statement.

measure which would help stop landlords from leaving the sector.

The autumn statement from chancellor Jeremy Hunt MP was a missed opportunity to address some of the issues in the housing market.

In short it was underwhelming, lacked imagination and left most feeling disappointed.

There were no promises to kick start, let alone stay true to their manifesto pledge of building 300,000 new homes a year, nothing to help address the supply and demand imbalance within the private rental sector and nothing much for landlords to get excited about. Indeed those unincorporated landlords still can’t deduct their mortgage costs from rental income – had the government addressed this it would have been the one tax

It is also perhaps indicative of a government which has run out of ideas and run out of even vague attempts to give the impression they care about the private rental sector – not surprising when we consider how many housing ministers there have been since 2010. The only positive element was the announcement of tax cuts for those landlords who are self employed. These cuts are the abolition, from April next year, of class 2 national insurance for those earning more than £12,570 per year. Also from

April, Class 4 national insurance paid on profits between £12,570 and £50,270 will be cut from 9% to 8%. It is incredibly frustrating to have had an autumn statement which promised so little to help those in the industry who need it most – namely tenants struggling to find homes to rent and landlords for whom there is increasingly little financial incentive to stay. We can only hope there are better times ahead and there is more positive news in the budget next year – and no pre general election gimmicks. Nik Kyriacou

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Another housing minister for DLUHC after Sunak’s reshuffle Lee Rowley MP is sweet 16 as he returns to the housing brief following Rachel Maclean’s sacking. The revolving door at the Department for Levelling Up, Housing and Communities (DLUHC) has struck again as housing minister Rachel Maclean MP was sacked by prime minister Rishi Sunak. She was the seventh person to have the job in the last two years and the 15th since the Tories came to power in 2010. Ms Maclean, who lasted just nine months in the job, has been replaced by Lee Rowley MP who last held the job in 2022, lasting a mere six weeks. The reshuffle came in part due to pressure on the prime minister to sack then home secretary Suella Braverman MP.

The decision to oust Ms Maclean came the day before the Renters’ Reform Bill was due to go to its first committee hearing. Sheldon Bosley Knight’s associate director Nik Kyriacou said: “This is symptomatic of a government which has run out of ideas and is frustrating to say the least.

to thrive and wants it to survive. We can only hope Mr Rowley lasts longer than he did last time.”

“It also says everything we need to know about how it feels about housing in general and the rental sector in particular. To have had seven housing ministers over the past two years is ridiculous. How can any of us in the industry have any kind of relationship with them and how can they build relationships with us? “We need a government which cares about the sector, wants it

More changes to the Renters’ Reform Bill Private landlords are to be banned from having ‘no DSS’ and ‘no children’ policies. The government tabled the amendments to the Renters’ Reform Bill which is currently at Committee stage. It said the changes were designed to protect vulnerable tenants whilst also improving living standards. However, landlords will still be able to carry out reference checks to establish rent affordability and “have the final say on who they let their property to”.

Landlord Times

A Decent Homes Standard is also to be introduced in the private rented sector for the first time. It aims to ensure all rental properties meet the expected living standards of being “safe, warm and decent” and reduce non-decent rental homes by 50% by 2030. Housing secretary Michael Gove said the measures aimed to reduce the “far too many [who] live in conditions that fall well below what is acceptable”. Sheldon Bosley Knight’s associate director Nik Kyriacou said: “We

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support this in principle but while I think the introduction of a Decent Homes Standard will be a good thing, the devil will be in the detail. “It was an unexpected omission when the Bill was first published in May as it was always part of the government’s intention to include it. “The vast majority of landlords provide quality accommodation and so have no need to worry. For tenants they will be secure in the knowledge the rentals they live in will be at an approved standard.”

Latest market deals from Sheldon Bosley Knight

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“This is good news for tenants who are continuing to face increased competition for properties.”

Landlords remain bullish about the future Nearly nine in 10 (88%) of landlords with more than five buy-to-let properties have added to their portfolios in the last six months. A survey by Shawbrook Bank of 1,012 landlords found landlords remained bullish with many planning to invest in more properties next year. This compares to those investors with between one and four rentals of whom only 58% had added to their portfolio. Almost four in 10 (39%) said they would diversify by location, while 37% were actively exploring different types of residential property. In addition, 26% of portfolio landlords said they were considering student housing and

Landlord Times

21% were looking at the retirement housing market. Among those who said they were diversifying their property portfolios, a third (33%) said they had done so to respond to tenant demand, while 28% said it was to prioritise more energy efficient buildings. In addition, of the 88% who said they were planning to add at least one property to their portfolio, 36% wanted to capitalise on good deals currently in the market, with 35% already having capital ready to invest. Sheldon Bosley Knight’s head of lettings, Rebecca Dean, said: “Shawbrook’s research highlights there is still a good number of

Monthly news for landlords

savvy professional landlords who continue to want to invest and add stock to the market. “This is good news for tenants who are continuing to face increased competition for properties. “It is certainly a tricky economic market and uncertainty due to the progress through Parliament of the Renters’ Reform Bill, but with demand remaining high and yields and rents also on the rise, it is heartening to see landlords continue to have confidence in the sector. “As ever if you would like any advice or information, please pop into one of our branches or call our teams.”

Latest market deals from Sheldon Bosley Knight

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Rents hit 15th consecutive record, as average property receives 25 enquiries Each rental across the country is receiving an average of 25 email and phone enquiries. It is more than triple the number seen in 2019.

Overall, the number of tenants looking to move across the country is 41% higher than in 2019, while the number of properties available to rent is down by 35%.

The shock figures published by Rightmove also show average advertised rents outside London are at a new record for the 15th consecutive quarter and are now 10% higher than a year ago at £1,278 per calendar month (pcm).

The figures show how the supply and demand imbalance is affecting the market although it is slowly improving from last year. Demand has eased by 17% compared with 2022, while available supply is up by 14% over the same period. The number of new rental properties coming to market is now 7% higher than at this time last year, the biggest yearly jump since November 2022.

10% higher than a year ago at £1,278 per calendar month (pcm). The data measures the total number of enquiries by phone and email sent from would-be tenants to agents.

Sheldon Bosley Knight’s head of lettings, Rebecca Dean, said: “While the ongoing issue of not enough supply to meet demand is easing it is a drop in the ocean.

“Tenants will need to be savvy if they are to have the best chance of securing a property. They need to be flexible on viewings and moving in times, have their references already prepared and be ready to move in quickly. “For landlords it represents a good time to stick with the sector. From our own experience here at SBK, there is huge demand out there and with the pressure of increased mortgage rates affecting the first time buyers sector in particular, it represents a good opportunity for buy-to-let investors to consolidate and possibly expand portfolios. “As ever if prospective landlords or tenants need advice, our experienced letting teams will be happy to help.”

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Landlord Times

Monthly news for landlords

Latest market deals from Sheldon Bosley Knight

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Click on the properties to view further details brought to you by SH

NO OW W AP AV AR AI TM LA EN BL T E

IDEAL BUY-TO-LET OPPORTUNITY A collection of 24 new luxury apartments situated in the heart of the Midlands

Nik Kyriacou ASSOCIATE DIRECTOR For more information, please contact Nik Kyriacou on nkyriacou@sheldonbosleyknight.co.uk | 07542 301093 *All rental values and subsequent yields are only estimates unless tenanted, and subject to market fluctuations.

To follow Sheldon Bosley Knight click here

Beaconsfield Street, Leamington Spa • Current rent value of £1,025 pcm • Town centre location • Loft space with en-suite • Two bedrooms • Pretty courtyard garden • EPC - D

Gross yield of 5.5%

£195,000

East Grove, Leamington Spa • Current rent value of £975 pcm • Two-bedroom town house • Town centre location • On-street parking • Currently empty • EPC - D

Gross yield of 5.4%

• Current rent value of £1,400 pcm • City centre location

Gross yield of 6%

£215,000

Apartment 14, Rodborough House, Coventry • Two-bedroom ground floor apartment • 678 sq ft • Private patio • Private allocated parking bay • Walking distance to Coventry train station

*All rental values and subsequent yields are only estimates unless tenanted, and subject to market fluctuations.

£280,000

AV AI

A collection of 13 new luxury apartments situated in the heart of South Wigston

APARTMENT

BEDROOMS

SQ FT

PRICE

RENT (PCM)

YIELD (GROSS)

464

£119,950.00

£700

657

£159,950.00

£850

6.40%

420

£119,950.00

£700

785

£169,950.00

£850

464

£129,950.00

£725

6.70%

624

SSTC

£800

5.60%

431

£129,950.00

£725

6.70%

799

£199,950.00

£875

5.30%

474

£129,950.00

£750

6.90%

398

£109,950.00

£700

7.60%

663

£174,950.00

£900

6.20%

420

£124,950.00

£750

7.20%

443

£124,950.00

£750

7.20%

For more information please contact the

Andrew Granger New Homes Team on 0116 242 9922

To follow Sheldon Bosley Knight click here

Coundon Road, Coventry • Current rent of £1,700 pcm • Ground floor shower room and first floor bathroom • EPC - D

Gross yield of 6.8%

• Four double bedrooms HMO

• Annual rent of circa £24,000

Gross yield of 8.0%

• Tenancy secured for next academic year (23/24)

• Off road driveway parking

• Large breakfast kitchen

• Generous size rear garden

• Double glazed with central heating

• EPC - D

• Currently managed by Coventry University • Well appointed three-storey town house • Within walking distance of Coventry city centre • Five lettable rooms • Communal lounge, breakfast room and kitchen

£300,000

Waverly Road, Leamington Road

*All rental values and subsequent yields are only estimates unless tenanted, and subject to market fluctuations.

OIEO

£300,000

• EXCL

ON SALE NOW

OPPOR

U VE

E IV

Y • EXCL

OPPOR

T NI

EXCITING NEW DEVELOPMENT IN BROMSGROVE • Ten luxury apartments in a superb conversion

• Ideal for a buy-to-let investment

• Two and three bedrooms over three floors

• Town centre location

• Three further two-bedroom town houses

• Great access to motorways

• Low maintenance grounds • Gated access

• Lift access For more information, please contact Nik Kyriacou on nkyriacou@sheldonbosleyknight.co.uk | 07542 301093

• EXCL

Off

Market NI

OPPOR

To follow Sheldon Bosley Knight click here

• EXCL

Thornton House, Leamington Spa • Two bedrooms

• Tenant in situ, rent of £1,200 pcm

• First floor apartment

• One allocated parking space

• Walking distance to town centre

• EPC - D

Gross yield of 4.4%

£315,000

• Two bathrooms

Gordon Street, Leamington Spa • Six-bedroom HMO

• Recent annual rent of £36,300

Gross yield of 9.9%

• Town centre location

• Walking distance to train station

OIEO

• Three storeys

• Current HMO licence

• Double glazed with central heating

• EPC - C

*All rental values and subsequent yields are only estimates unless tenanted, and subject to market fluctuations.

£365,000

To follow Sheldon Bosley Knight click here

Melbourne Road, Coventry • Eight double bedrooms

• Tenant in situ, rent of 11 x £400 pcm

Gross yield of 14.3%

• Current HMO licence valid until September 2024

• Off road driveway parking

OIEO

• Three storeys

• Huge scope for further modernisation

• Double glazed with central heating

• EPC - C

£370,000

Earlsdon Avenue North, Coventry • Six-bedroom HMO • Six bathrooms • Immaculate condition • Popular location • Low maintenance rear garden

• Rent starting from £500 pcm per room • Communal kitchen/diner • Traditional double bay window • EPC - D

*All rental values and subsequent yields are only estimates unless tenanted, and subject to market fluctuations.

Gross yield of 9.0% OIEO

£400,000

To follow Sheldon Bosley Knight click here

The Square, Kenilworth

Off

Market NI

OPPOR

£475,000

Y • EXCL

• Total annual income £31,200 Gross yield of 6.5% • Two-bedroom apartment - £825 pcm • One-bedroom apartment - £795 pcm • Kenilworth town centre • EPC - TBC

• Mixed use unit - residential and commercial • Two upper floor apartments • Ground floor commercial premises • 159.12m (1,712 sq ft) GIA • Shop - £7,800 per annum

• EXCL

Vale Park South, Evesham • Access to the A46, M5 and M40

• ERV £446,000pa

• 10m clear internal height

• £175 per sq ft freehold

• 50m yard depth

• BREEAM Rating - Very good

• Excellent parking

• EPC - A

*All rental values and subsequent yields are only estimates unless tenanted, and subject to market fluctuations.

Gross yield of 5%

£175 per sqft

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