Two separate investigations in Camden and Mansfield involving unlicensed Houses of Multiple Occupation (HMOs) led to sanctions for landlords and agents. West Northamptonshire is the latest council to announce a crackdown on unregulated and poorly managed properties.

Serious fire safety failings

In July 2023 Camden Council brought charges under the Housing Act 2004 and the Management of Houses in Multiple Occupation (England) Regulations 2006 after inspectors discovered partitions had been used to create two extra bedrooms without adequate fire escape routes, fire detection or fire-resistant doors.

Continued rising costs for landlords that impact increasing rent levels for tenants and the mismatch between supply and demand are exacerbated by the ongoing regulations.

The Scottish Parliament’s Local Government, Housing and Planning Committee sought views on the Cost of Living (Tenant Protection) (Scotland) Act 2022 (Amendment of Expiry Date) (No. 2) Regulations 2023, which were laid in the Scottish Parliament on 1 June 2023.

The Regulations extend the effect of Part 1 of the Act for a further and final six months, providing that: 

• Most in-tenancy private rent increases would continue to be capped at 3%
• Alternatively, private landlords could apply for increases of up to 6% to help cover specific increases in costs in a specified period where these costs can be evidenced
• Enforcement of evictions would continue to be paused for six months for most tenants, except in several specified circumstances
• Increased damages for unlawful evictions of up to 36 months’ worth of rent would continue to be applicable

On 1 June 2023, the Minister for Zero Carbon Buildings, Active Travel and Tenants’ Rights, Patrick Harvie MSP, wrote to the Committee saying that the Scottish Government decided that it is necessary and proportionate for the Act to be extended until 31 March 2024, subject to approval by the Scottish Parliament

In the letter, the Minister said that over the period from 2018-2020, 63% of social rented households and 40% of private rented households did not have enough savings to cover even a month of income at the poverty line, compared to 24% of households buying with a mortgage and 9% of households owning outright. Consequently, rented sector households entered the cost of living crisis in a more vulnerable position than owner-occupiers.

Property agents speak out

Recent Housing Insight reports from Propertymark show that pressure on rents remains with 50% of responding agents reporting rents increasing month-on-month on average at their branch in April 2023, while the number of properties available to rent per member branch remained stubbornly low at nine in May. This is 12 per cent lower than in May 2022 when we saw the market starting to significantly overheat. Ultimately, the pressure of rising costs faced by landlords, higher demand for properties than the number made available, and a cap on rents in Scotland have combined to raise costs for tenants.

According to the property portal Zoopla, in April 2023, rent in London was 13.5% higher than a year ago, in Scotland it was 13.1% higher, and the Northwest of England saw a 10.5% increase. This amplifies Propertymark’s member feedback that landlords in Scotland are increasing rents between tenancies to cover their costs and anticipated costs due to a fear of ongoing rent control legislation.

It's been five years since Propertymark started campaigning for leasehold reform and our latest report: Leasehold 2023: Has Anything Changed? shows that our members are still concerned and experiencing difficulties with a number of facets relating to leasehold law.

Sustained research

Following our 2018 report Leasehold: A Life Sentence, where we identified thousands of homeowners were stuck in leasehold houses they cannot afford to live in and cannot sell, our continued lobbying to drive legislative change was instrumental in The Leasehold Reform (Ground Rent) Act 2022 coming into place.

However, this only related to new leases and didn’t address existing homeowners who have a property with escalating ground rent. 78% of our agents stated will struggle to sell these properties, even if priced correctly. This highlights the importance that further legislation is required.

Some key aspects of our leasehold research

CONSUMER AWARENESS

Propertymark agents saw a 72% increase in homebuyers’ awareness of the issues surrounding leasehold property than five years ago and now ask for leasehold particulars before they view the property.

67% have been encouraged to negotiate harder on leasehold property, which suggests issues surrounding leasehold are artificially restricting prices of these properties, and as a result, future change in legislation would ease such issues to see a rise in the value.

MANAGING AND SELLING LEASEHOLD

92% of letting agents who responded to our survey reported managing leasehold property. 44% of those reported they sometimes struggle with the freeholder’s managing agent. Further commentary suggested that this is primarily based on communication delays.

However, many leaseholders continue to face issues buying and selling within buildings over 11m tall. Barriers and solutions to the issues consumers face in obtaining a mortgage on leasehold property are affected by the Building Safety regulations, with 51% of potential buyers asking about cladding before they view. Alarmingly though, 11% asked after they agreed to purchase and 16% asked when the bank queries the situation as part of the buying process.

As the legislation is relatively new, it is clear that more needs to be done to raise awareness.

MATERIAL INFORMATION

74% of member agents reported they regularly advertise the leasehold particulars when marketing a property for sale.

Propertymark’s updated Property Information Questionnaire dives deeply into leasehold property so buyers and fully aware and this can also speed up the buying process at the conveyancing stage.

Running from 3-9 July, the theme of the week is Know Your Rights. Recent YouGov research commissioned by Resolve found that almost 1 in 5 people have had to consider moving home because of the impact ASB was having on them; 1 in 10 have actually moved. Despite this, over half who were either a victim or witness of ASB did not report it.

The campaign puts a particular focus on the ASB Case Review – a powerful tool their research highlights only 6% of people know about. Tenants who experience ASB should initially report incidents to the anti-social behaviour team at the local Council, or to the Police if they feel that they are at immediate risk or in danger.

Victims of persistent ASB who have reported it at least three times have the right to activate an ASB case review. This demands that the Police, Local Authority and any other relevant agencies come together to try and find a solution.

Reforms to boost ASB eviction powers for landlords

The UK Government’s ASB Action Plan aims to crack down on anti-social behaviour, with new tools for landlords included in the Renters (Reform) Bill to ensure that anti-social tenants will face consequences - including making the grounds for possession faster and easier to prove.

The Action Plan is clear that sustained acts of intimidation or disruptive behaviour will not be tolerated and should lead to the eviction of the tenant involved.

In 2018 Propertymark published a report titled Leasehold: A Life Sentence? Based on the findings of that report, we helped to drive legislative change that has so far culminated in the Leasehold Reform (Ground Rent) Act 2022. Following this change Propertymark decided to investigate whether anything had changed in the world of leasehold.

We asked our members whether they have noticed any change since the implementation of the legislation and take a look at the alternatives to leasehold. On a positive note, consumer awareness around issues in leasehold has improved. Yet, perhaps because of this, our members report that leasehold property is harder to sell.

Members also told us of their concerns regarding the short period of many leases, the high cost of renewing a lease, difficulties obtaining information from management companies, and the need for more clarity on processes and rights for acquiring the freehold.

Selling leasehold properties

Not all estate agents will sell property on behalf of developers, but 54 per cent of those that do, reported in our survey that developers do not always provide the pertinent leasehold information to the agent. 

Further investigation revealed that it is generally the small-scale developers who fail to have this information ready in time for marketing of the property. It appears, for these developers, leasehold particulars are placed toward the end of the to-do list. This causes obvious issues with consumer awareness – it is impossible to understand one’s obligations, if they are not provided in writing when necessary.

On the positive side, 74 per cent of agents responding to the survey reported that they regularly advertise the leasehold particulars when marketing a property for sale.

Figures released by the Institute for Fiscal Studies (IFS) back up evidence given to the Department for Work and Pensions (DWP) Commons Committee by Propertymark on 28 June 2023. Head of Policy and Campaigns Timothy Douglas warned MPs of vulnerable tenants being priced out of the market.

The IFS report outlines that given 38% of private renting households (2 million) are on housing benefits, this sharp reduction in affordability could lead to demand for affordable properties far outstripping supply.

This is the lowest level on record. While there is some variation between the nations and regions, this decline in affordability has been felt across Britain, with the share of properties that are affordable for benefit claimants ranging from 2.5% in Wales to 6.9% in the North East.

Douglas took the opportunity to present the key issues to the DWP that Propertymark members have brought to the fore, stating the demand for rented property continues to outstrip supply in a highly competitive market. Evidence from a survey of Propertymark members shows that demand is up 24% in April 2023 compared to the previous year.