Licensing Updates and Rent Increases
Nobody can argue that 2022 wasn’t a busy year news wise. And what better way to kick off our first 2023 Mashroom Show than with an update on the stories that got us talking from last year!
Don’t forget, there’s always plenty of conversation about the latest topics on the Mashroom Landlord Community on Facebook, so if you have anything to add, or there’s some breaking news in your area, head on over and join us – we love a chat and it’s great to hear what’s going on where you are!
Selective Licensing scheme extension in Nottingham
Licensing is a real landlord bug-bear, and the landlords of Leicester certainly had something to be peeved about in October.
Three areas of the city had their selective licensing scheme extended, with landlords copping bills of £1,090 per property, making Leicester the priciest location in the Midlands.
Not to be outdone, Nottingham is following Leicester’s lead. A new proposal has been launched with a bid to extend the region’s current scheme, and if given the green light, properties in Broxtowe and The Park would be set to fall under it too.
The current scheme was due to finish its run in August 2023, when it is likely to be renewed, and the proposed extension could also come into force.
Payable in two parts, landlords will have to find the costs out of their own pocket, with, according to the council, ‘no rent increases needed to cover the fee.’
Talking about the plans for the scheme, local councillor Toby Neal has been positive about the proposed change, hoping that it will raise standards in the 45,000 privately rented properties in the area:
People renting privately have a right to expect a decent standard of accommodation. Many of the 45,000 plus privately rented properties in the city are well-managed but, as part of the first scheme we still find properties that are to a very poor standard. Homes with damp and mould, homes with no smoke alarms or hot water or heating; so there is more work to be done.
According to Mr Neal, the council believes the introduction of a new licensing scheme would benefit tenants, local communities and landlords, as they will be able to demonstrate to prospective tenants that they meet required standards.
The introduction of the Decent Homes Standard, which comes as part of the 2023 rent reforms, also serves to tackle these concerns.
If you have a property in Nottingham, you can keep up to speed with the latest on the new licensing laws here, and see if your property is located within the proposed extension.
Rental rates rocket into 2023
The cost-of-living crisis is no surprise to anyone, and everyone is feeling the pinch. From electricity to eggs, costs are rocketing and money just doesn’t stretch as far as it did this time last year.
The government has issued up to £1,350 of cost-of-living support help to households hit hardest, with new cost of living payments available for those on benefits, another for pensioners and one for those with disabilities in a bid to help with high energy bills, food costs and other pricey necessities.
Government help aside, costs continue to rise, and this is also true of rent. Average rents across the country have crept up, with private rental prices paid by tenants across the UK rising by 4.2% between December 2021 and December 2022 (according to the ONS’s Index of Private Rental Prices).
Whilst high, 4.2% pales into insignificance compared to the prices faced by tenants in the capital though – according to Foxtons Lettings Market Index, London prices were 20% higher at the end of 2022.
With less than 20,000 properties available in the capital at the end of the year, competition forced prices through the ceiling, and made a London rental property a pretty tricky thing to secure. In fact, there were an average of 18 tenants competing for every property within London, leaving landlords with some complex choices to make.
Outside of the M25, landlords across the country may be finding themselves with a deluge of tenants too:
- On average, there were 32% fewer listings in 2022 compared with 2021
- But there were 14% more tenants looking for their perfect pad
- Now is a great time to be a landlord with supply and demand definitely on your side.
That said, whilst it can be tempting to hike rents to take advantage of the market, take care – times are hard and finances are stretched.
The Office for National Statistics (ONS) has reported that 93% of adults are admitting to noticing a marked increased in their living costs compared with a year ago, and worryingly, according to research from Direct Line Insurance, 22% of households report that their finances have become so precarious that they would only be able to last a month if the main earner was unable to work.
Whilst signing up a tenant on a sizable rent looks great on the bottom line, make sure you do your due diligence and protect yourself against rent arrears. Whilst nobody can predict the future and a financial hiccup can happen to the very best tenant, in tricky times, a belt and braces approach to keeping your own finances secure (whilst always being sure to remain understanding to the plight of your tenants) is an absolute must.