Nottingham City Council has announced a fee increase for their ailing Selective Licence Scheme that was only launched in 2018. In a move that will anger landlords and undoubtedly increase rents further for tenants, the fee from April 2020 for new licences will increase to nearly £900!

The city council claims that the current fee structure does not cover overheads and they need to recruit more staff, which is pushing up the fee. The council have also recently started to add penalty fees to current licence applications if they have had to raise queries. Landlords on the other had are questioning what the positive impacts of the scheme have been after the recent progress report showed very few licenses issued, very few prosecutions, and a huge shortfall in the anticipated number of applications.

With Nottingham’s Selective Licensing Scheme already the most expensive of its kind in the country, the scheme has been controversial since inception. Before launch, the vast majority of landlords and agents warned of rent rises and increased homelessness, and both are appearing to be very justified concerns. Agents across the city are seeing landlords throwing in the towel, which whilst great for first-time-buyers, is only serving to reduce supply at a time when both the city’s universities are over-subscribed and struggling to fulfil their own housing need.

Rent UP

Rising Rents

According to research carried out by Zoopla, Nottingham has seen the rents rise at the fastest rate in the country and this is being largely attributed to the licensing scheme. https://www.nottinghampost.com/news/nottingham-news/selective-licensing-blamed-nottingham-reaching-3435063

Selective Licensing is being seen as the preferred method by councils to drive out the so-called ‘rogue landlords’ and improve standards. The problem with the Nottingham scheme is that it is so vast, the council clearly can’t cope with the application process itself, never mind doing the job the scheme is meant to perform. Similar, more concentrated, schemes in other parts of the country have proved to be a great success but those lessons have been sadly ignored. 

 

Rising rent prices across the country show no signs of abating with prices in the north showing larger increases than in the south.

The ARLA Private Rented Sector (PRS) report shows the number of tenants experiencing rent rises fell marginally in September, but 58% of the agents that responded stated that rents on the whole are still going up. Year-on-year, the figure for rent rises is up from 27 per cent in September 2017 and 31 per cent in September 2018, as they remain high. Tenants in the North East of England were the worst affected with 86 per cent of agents witnessing an increase in rent prices.

In Nottingham, rents have risen consistently for the past three years, driven in no small part by Selective Licensing, Landlords exiting the market, huge student numbers, and more recently by the Tenant Fee Ban. 

Properties in the city appear to be seeing the highest rises as demand massively outstrips supply, and agents across the city are increasingly fully let. 

See the full ARLA report here. https://www.arla.co.uk/news/october-2019/no-relief-for-tenants-as-rent-costs-remain-high/

After many months of deliberation The Ministry of Housing, Communities and Local Government (MHCLG) has announced that mandatory five-year electrical installation checks on private rented housing in England will be introduced in the coming months.

In a surprisingly sensible manner, the government are introducing the legislation in a 2 year staged process to give landlords plenty of time to fulfil the requirements. In year one, all new private tenancies will be affected, and in year two all existing tenancies will come within the scope of the scheme.

The implementation date has not yet been clarified, but MHCLG has stated its intention is to introduce the legislation as soon as parliamentary time allows. Landlords and agents will then be given at least six months to familiarise with the new legislation before it comes into force.

Properties that already have a valid electrical installation condition report (EICR) will not need to replace it until five years have passed since it was issued.

 

Pricing your property accurately, and choosing your buyer wisely are becoming all the more important with Brexit looming and lenders confidence dipping. As we saw in 2008 down-valuing now appears to have hit Nottingham and lenders are treading carefully when it comes to property valuations.

Down valuations by lenders, can mean buyers having to pay thousands of pounds extra, up front, or renegotiate their purchase price to avoid the sale collapsing.
“Reduced valuations are often due to surveyors covering their backs, but they are almost impossible to argue with the lender” comments Jonathan Detheridge from Granger & Oaks Estate Agents. “We saw this a lot in 2008, particularly from one lender who at the time offered the most favourable rates, but thankfully it didn’t last very long”

Down-valuing is problem that has been affecting other parts of the country during 2018, but with price growth in Nottingham being strong in 2017-18 it appears that lenders are now sharpening their pencils and adopting a more cautious approach.

See BBC story below from July 2018

https://www.bbc.co.uk/news/business-44202542

To mark our 15th anniversary, we are today embracing the glorious weather and embarking on a 15 mile charity walk to raise money for the Alzheimers Society & Maggies. 

To allow the walk to take place, this week we are closing early, so the office will close for business at 12:30pm. 

If you've not already sponsored us, there is still time. The link is below. We're aiming to raise £1500 pounds, and as I write we're only 8% short of the target. 

https://www.justgiving.com/teams/GnO2

Granger Oaks 15 Miles for 15 Years