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Category: Howsy Property

How the weather is affecting your rentals

by Alysha Taylor SmithPosted on

In recent years, the impact of climate change has become increasingly apparent causing unfamiliar weather events across the world, including the UK. With the unpredictability of summer weather changing between heatwaves and large downpours of rain, how can landlords ensure they are prepared?

Rising Utility Costs

Fluctuating temperatures contribute towards higher utility costs and tenants may rely more on electricity to cool or heat their living spaces, leading to increased utility costs for landlords and tenants alike. Higher temperatures can result in increased water usage, further burdening the electrical grid and city resources, thereby escalating costs. Landlords offering bills included should carefully consider the monthly charge to make sure that it covers expected usage. 

Coastal Risks

Coastal towns are particularly vulnerable to weather impact, such as flooding and rising sea levels. The structural integrity of properties in these areas is at risk, and the demand for property insurance increases alongside repair bills. Landlords letting properties near the coast, particularly in areas with rougher seas (for example, Cornwall) should seriously consider implementing measures to protect their properties in the case of flooding – Or even consider moving to inland investments.

Property Damage and Market Appeal

Weather-related property damage can significantly impact a landlord’s bottom line. Continuous exposure to weather-related calamities can make properties located in high-risk areas less attractive to potential tenants. Renters are increasingly considering the risks associated with extreme weather events, making properties in these locations less desirable. Consequently, selling properties in such areas may lead to reduced profits or even losses, as real estate prices tend to drop in climate-impacted regions. It may be a good idea to look forward to the future and aim to predict which areas are likely to suffer from weather damage in the long-run to adjust your property investment strategy for better long-term success.

Changing weather patterns caused by climate change pose significant challenges for landlords in the UK. Being proactive and implementing climate-resilient measures can help landlords protect their rental properties from potential damages and maintain their market appeal. Constructing energy-efficient buildings, reducing energy consumption, and embracing sustainable practices are crucial steps in mitigating the impacts of changing weather on rental properties. By adapting to these challenges, landlords can safeguard their investments and contribute to a more sustainable future.

Reasons for new landlords to join the buy-to-let market

by Alysha Taylor SmithPosted on

The rental market is experiencing continued demand, with indications pointing to this trend continuing in the long term. With lower numbers of rental properties than potential renters on the market, the rental market is set to become even more competitive causing difficulties for young renters looking for suitable accommodation.

What do landlords have to gain from the current rental supply imbalance? 

Reduced Vacancy Periods

With a higher demand for rental properties, landlords can enjoy shorter vacancy periods. Properties are more likely to be rented out sooner, minimising the time properties remain unoccupied. This ensures a steady stream of rental income and mitigates the financial strain associated with prolonged vacancies.

Selective Tenant Screening

The growing demand for rental properties allows landlords to be more discerning in their tenant selection process. Landlords can carefully screen potential tenants, choosing those with excellent rental histories, stable incomes, and responsible behaviour. By selecting reliable tenants, landlords can minimise the risks associated with property damage and unpaid rent, ensuring a smoother and more profitable rental experience.

Increased Rental Prices

The competitive rental market resulting from rising demand empowers landlords to charge higher rental prices. As demand surpasses supply, landlords gain leverage to adjust rental rates to match market conditions. Higher rental prices enable landlords to maximise their return on investment and boost their profit margins, leading to increased financial stability and growth.

Expanded Profit Margins

The combination of shorter vacancy periods and higher rental prices contributes to expanded profit margins for landlords. By reducing the time a property remains unoccupied and optimising rental rates, landlords can achieve a more favourable return on their investment. These improved profit margins create opportunities for further property investment, property maintenance, and enhancement of rental offerings.

The increasing rental demand in the market has a positive impact on landlords in various ways. Landlords benefit from shorter vacancy periods, enabling them to generate consistent rental income. They can also be more selective with tenants, reducing the likelihood of property damage and rent arrears. Additionally, the competitive market allows landlords to charge higher rental prices, leading to improved profit margins. With careful management and adaptation to market trends, landlords can thrive in the evolving rental landscape. Additionally, as more landlords enter the market the supply and demand crisis will inevitably level out, causing positive knock-on effects for tenants. 

EPC regulations to be delayed until 2025

by Asif AliPosted on

Technical difficulties in the UK government’s Energy Performance Certificate (EPC) database have led to a delay in implementing new regulations for landlords in England. As a result, Landlords will not be required to make certain energy-efficient improvements to their rental properties until 2025 at the earliest. 

Why are EPC regulations becoming stricter? 

According to a recent survey, 90% of tenants believe that energy-efficient homes are essential, and 82% would be willing to pay higher rent for such properties. Additionally, poorly insulated and inefficient properties can lead to 21% higher energy bills, on average, for tenants. Furthermore, the carbon footprint of a typical rental property is 19% higher than that of an owner-occupied home.

Despite the delay in new EPC regulations, Landlords should take steps to improve the energy efficiency of their rental properties as soon as possible. Making energy-efficient upgrades can save an average of £350 a year on energy bills, and upgrading from an EPC rating of D or E to an A or B can add an average of £16,000 to a property’s value.

The most common ways to improve a property’s EPC rating include:

  • Adding (or improving) loft and wall insulation
  • Replacing older boilers for more sustainable alternatives. (This may also save you from costly boiler repairs). 
  • Installing solar panels or alternative methods of creating sustainable energy within the rental homes. 
  • Ensure that glass in your properties is double glazed to improve energy efficiency. 

It is vital to note that the delay in implementing new EPC regulations is a significant setback in the UK’s efforts to achieve its goal of net-zero emissions by 2050. However, Landlords can still make a significant impact by taking action to improve the energy efficiency of their properties. By doing so, they can not only save money and increase the value of their property but also improve the quality of life for their tenants.

Why Landlords are holding onto their investments – A positive outlook for Landlords in the UK Housing Market

by Asif AliPosted on

The UK property market has been unpredictable for some time now, it’s important for Landlords to carefully consider the pros and cons of selling up versus holding onto their investments. While there are certainly challenges to be faced in the current housing market, there are also reasons to be optimistic about the future.

The current housing crisis in the UK has been a highly talked about topic through the property investor communities over the last year. The crisis, caused by a lack of Landlords and an increasing demand for rentals, has caused significant impact to both property investors and individuals seeking suitable rental accommodation. 

The Guardian reported on the top challenges faced by current Landlords and buy-to-let investors:

  • Recent stamp duty increases have made buying new properties more expensive, reducing the amount of new landlords entering the market
  • The phased reduction of mortgage interest tax relief has reduced landlords’ profits, making it less financially viable to continue renting out properties
  • Proposed changes to the eviction process (For example, abolishing section 21 evictions) could mean that landlords may have to give tenants longer notice before evicting them

However, despite these challenges Landlords are holding onto their property investments and here’s why:

  • Yields – Rental yields in the UK are still high compared to other countries, providing a strong income stream for Landlords. Landlords have justifiable reason to raise rental prices in the current market, maintaining profits in the short term and potentially leading to high-yields in the long-term when financial strains ease again.
  • Demand – The demand for rental properties is likely to remain high, as many people continue to struggle to get onto the property ladder due to rising house prices. This creates a pool of tenants willing to pay higher monthly rent, and provides landlords with a wider choice of higher-quality tenants who are less likely to miss rental payments.
  • Long-term investment – While the market currently presents some concerning challenges and instability, it’s important to remember that it will stabilise again. When that happens, Landlords who hold onto their investments might benefit from increased yields in the future. 

As a Landlord, you should ensure that you are well-informed about changes to the rental landscape in the UK and how your investments will be affected. It’s best to take time to properly research the potential implications the changes have on your investments and weigh up the risks vs benefits. Whilst it is tempting to sell up when there are challenges in the market, impulse decisions can lead to large losses and potentially missing out on opportunities in the future. 

Renters’ Reform Bill: Everything you need to know before May

by Asif AliPosted on

Announced in June 2022, the Renter’s Reform Bill outlines the Government’s plans to build a fairer private rental sector in the UK. Over the past year, landlords have been following updates relating to this bill, preparing for its live date. Since we are now getting close to the bill due-date (May 2023), this article will summarise everything you need to know should the bill go ahead. 

The end of Section 21 notices

The most significant and talked about change caused by the bill is the end of Section 21 notices. 

Currently, Section 21 notices allow landlords to evict tenants without providing a reason. Under the proposed new rules, landlords will need to provide a valid reason for evicting tenants, such as rent arrears or anti-social behavior. The changes are designed to provide tenants with greater protection and reduce the number of unjust evictions.

Changes to Section 8 notices

Landlords will still be able to use Section 8 notices to evict tenants for specific reasons. However, the grounds for eviction may be limited, and the process time-consuming. For example, landlords will need to give tenants six months’ notice before they can issue a Section 8 notice for rent arrears.

Eviction reasons for a Section 8 notice must be one of the following: 

  • If a tenant has rent arrears
  • If the tenant damages the property
  • If the tenant is causing a nuisance to the neighbours

Security of tenure

The renter’s reform bill will provide tenants with greater security of tenure. As per the plans outlined in the bill, the minimum notice period for tenants to leave a property will be increased from two months to six months, giving tenants more time to find alternative accommodation. 

Additionally, landlords will need to provide tenants with a minimum of three years’ security of tenure before they can end a tenancy.

Preparing for the changes in May 

To prepare for the upcoming changes, landlords would need to review their policies and procedures to ensure they comply with the new rules. This includes ensuring that all tenancy agreements are up to date and providing tenants with the correct documentation.

Working with a letting agent can help landlords to navigate the new rules with ease and ensure that they are properly prepared for all of the new policies which will be coming out of the bill once it is live in May 2023.

How to avoid EPC penalties

by Asif AliPosted on

What is an EPC?
An EPC (Energy Performance Certificate) is necessary for providing insight into the energy efficiency and emissions from a property.

The gov.uk website sets out clear rules for ordering EPC’s: 

  • When selling a property, you must order an EPC for potential buyers and tenants before you market your property to sell or rent.
  • In Scotland, you must display the EPC somewhere in the property, for example in the meter cupboard or next to the boiler.

An EPC will provide an energy efficiency rating for the reviewed property from A (most efficient) to G (least efficient), this rating will then be valid for 10 years. 

Changes to EPC policies

In April 2020 the government introduced the current rules for property EPC’s which apply to all existing tenancies. These changes prohibited letting properties which scored an F or G efficiency rating, landlords who failed to comply with these regulations were faced with fines up to £5000.

After a consultation in December 2020, the Government announced new standards for England and Wales which are set to come into law by 2025.

The change signifies a large-scale shift towards the prioritisation of environmental considerations in the UK property market. From the activation date of the new law, all rental properties will be required to have an EPC rating of between A and C. The regulations will apply to all new tenancies in 2025 and all existing tenancies by 2028.

Not complying with the new law after 2025 will result in a significantly higher penalty of £30,000. 

What can landlords do to avoid EPC charges? 

Landlords should now review the EPC ratings of the properties within their portfolios. For landlords whose properties have a rating of lower than C, it’s advised to start taking action now to prepare for the upcoming law changes in 2025.

The energy provider EDF outlines some of the most effective ways to improve the EPC rating of a property:

  • Adding/ improving loft insulation 
  • Adding/ improving wall insulation 
  • Replacing boilers 
  • Installing solar panels
  • Double glazing windows

The changes will inevitably be costly to landlords whose homes do not have existing energy efficiency measures in place. Landlords are advised to start implementing measures to improve property EPC ratings early in order to spread the cost over a longer period of time, making the home improvements more manageable. 

Landlords look forward to predicted drop in mortgage repayments

by Asif AliPosted on

Most UK landlords will be using fixed rate mortgages, but there’s good news on the horizon for those who aren’t. New analysis from wealth manager, Quilter, suggests that monthly mortgage payments could fall by around 25% by the end of 2023.

How does this affect landlords?
For affected landlords, this potential drop in mortgage costs could significantly increase cash flow, allowing them to increase profits or reinvest finances back into their rental property. For example, by using the additional income to pay for property repairs, improvements, or even to purchase additional rental properties.

Moreover, landlords may be able to consider mortgage repayment strategies to pay off their mortgages faster by making higher monthly payments or increasing their repayment frequency.


What evidence suggests the 25% drop?
Recent statistics released by the UK government’s house price index indicate that the average cost of a property in the country was £294,910 in November 2022. Mortgage rates surged to roughly 6% in the aftermath of the mini-budget, adding to the already high cost of investing in new properties. 

However, it is anticipated that house prices will fall by 8% in November 2023 as predicted by Halifax.

The director of Halifax Mortgages, Kim Kinnaird, said “We expected that the squeeze on household incomes from the rising cost of living and higher interest rates would lead to a slower housing market, particularly compared to the rapid growth of recent years,”

Halifax predicted that mortgage rates will continue to decline, potentially hitting 4%. As a result, the average UK house price could fall to £271,317, leading to an estimated 25% decrease in monthly mortgage payments compared to the previous year, with payments amounting to £1,145.

Karen Noye, mortgage expert at Quilter says:

“Rising mortgage rates have played a significant role in the affordability of buying a first home or moving home, and for many these costs were pushed to unaffordable highs. It is therefore a real positive that looking forward we can hope to see such a significant dip in monthly mortgage payments by the end of the year should house prices and mortgage rates continue to fall as expected.

The potential reduction in mortgage costs could make it easier for landlords to obtain new mortgages or refinance their existing mortgages. With lower interest rates, landlords may be able to secure more favorable loan terms or lower monthly payments. Additionally, with a lower mortgage payment, landlords may be able to increase their borrowing capacity, allowing them to expand their property portfolios.

Whilst substantial evidence points towards a fall in mortgage rates, this is still vulnerable to many different factors such as inflation, government intervention, the type of property and location. It is not impossible that mortgage rates will rise during 2023, and landlords should stay cautious and up-to-date with new developments as the year progresses.

How landlords can increase rental prices fairly

by Asif AliPosted on

Average rental prices are increasing across the country with rental demand outweighing housing supply, but how can tenants cope with rising rental prices? And what can landlords do to protect their investments? 

Almost two-thirds of UK landlords will be forced to raise rental prices by at least 10% within 2023 if market conditions don’t improve. Increasing rental prices is a necessity for landlords seeking to protect their profits, but this will be at the expense of tenants who are unable to keep up with rising costs teamed with the cost of living crisis. 

Research by Aldermore Bank found that landlords are conflicted about increasing rental prices at this rate during such a challenging financial time for tenants; with 64% of landlords stating that they would be worried about their tenants being able to keep up with increased monthly payments. 

Guidelines on increasing prices for your existing rentals 

For landlords who are in a position where increasing rental prices is necessary, the below guidelines must be followed to ensure fair and legal practice and to minimise negative consequences for either party. 

  • Tenancy agreements should always include how and when rent prices will be reviewed. Landlords are responsible for ensuring they follow-out the agreed pre-agreed process for increasing rent. 
  • Landlords must seek permission if they want to increase rental prices by more than previously agreed. 
  • Rental increases must be fair and realistic in consideration of local rental prices.

If the tenancy agreement does not state the procedure for increasing rental prices, landlords can: 

  • Increase the monthly rent of a property when the lease is renewed. 
  • Agree a rental increase with the tenant where the tenant must provide a signed written agreement of the rental increase. 
  • Use a landlord notice to increase rent after a fixed term has ended. 

Long-term solutions 
Whilst landlords are facing many serious short-term challenges which are driving up rental prices, landlords should continue to think about their investments with a long-term perspective.

Whilst landlords generally seem concerned about rising living costs, Aldermore’s study revealed that 54% of landlords still feel optimistic about the future. Additionally, it continues to be widely accepted that buy-to-let investments are still a stable way to make a good income.

By making intelligent investment plans, avoiding panic-decisions on current rentals and preparing properties for the future (such as improving energy efficiency), there is still a bright future for buy-to-let landlords in the UK.

How to guarantee rental payments as cost of living increases

by Asif AliPosted on

Cost of living prices in the UK have been steadily increasing over recent years, having serious consequences for renters. A study in August 2022 revealed that food prices had risen by 12.5% compared to one year earlier. Additionally, rising gas and electric prices are putting huge strains on renters across the UK trying to keep up with the rising prices without compromising on their quality of living. 

Many renters are now facing difficulties being able to pay their monthly rent, due to no fault of their own. Long-term renters chose rental properties which fitted their budgets given the average cost of living prices at the time of entering their rental contract. However, renters who have been in their property for 2+ years are now finding their financial circumstances drastically changed, despite having stayed in the same property. 

Whilst a lot of renters have developed plans to cope with the rising costs, the significant increase in cost of living is inevitably causing serious problems for some renters, with knock-on consequences for landlords as tenants struggle to pay rent each month. 

What can landlords do to guarantee rental payments? 

When entering into new rental contracts, landlords should now pay more attention than ever to the average cost-of-living in the local area, and account for this when bringing in new tenants. Ensuring that your potential new tenants can provide proof of yearly income 30 times the rental cost will create a safety-net which should guarantee timely rental payments each month, whilst leaving space for cost of living prices to increase further throughout the next year. 

In addition to this, the most effective way to ensure timely rental payments is to enter into a “Rent Guarantee Scheme”. For a small monthly payment, this insurance will guarantee rental payments when a tenant does not pay their rent within 10 days of it being due – meaning that landlords will receive the rental payments each month even when their tenant is unable to pay. 

In summary, the cost of living crisis in the UK continues to cause serious challenges for both tenants and landlords. However, by developing an informed plan, landlords can limit the impact these challenges have on their monthly profits and gain more security with their investments.