What an amazing episode of the growing Movebubble Me Lunchtime Chat Series, where we get those at the top of the property game into a conversation on some hot topics within the property space. This was no exception, and we were so excited to have such a wealth of experience onboard talking about the issue of Supply and Demand in the UK Housing Market. Below is both the show notes, and the video recording of the webinar. If you have further questions or comments please drop them in the comments section at the bottom of this post and we will ensure they get answered.
Show Notes and Transcript
Logan: Hello ladies and gentleman, and welcome back to Movebubble Me, our series of lunchtime chats with those in the know when it comes to property and the housing market. So this is, I think, I’m pretty sure this is our 6th episode, which is exciting, and it has evolved quite considerably, so for those of you who have been with us from the beginning, you will have certainly seen a change in the format and the way we go about these webinars. It’s pretty exciting as well that from our end that this is fast becoming the platform of choice for renters and properties owners to engage in conversation on real topics that are affecting both of them, and get access to the best in the game. Once more we’ve got a treat for you all today, and I’m really honored that we’ve got both Kate Faulkner and Vanessa Warwick with us today. So hello to you!
Vanessa: Hello
Logan: Look at that we got a double-handed wave there from Kate, very excited. So Kate runs PropertyChecklists.co.uk, she couldn’t be more involved in the property market if she tried. I mean, she’s reporting weekly on what is really going on in the property market, walking us through purchase and rental prices, if you really dig into her online profile, she confesses to unusually having experience across the whole property market, from, bare with me, buying, selling, property investment, part-exchange, renting, letting, self-build, renovation, conversions, DIY, property history, property types, house prices and rent. So wow, yeah.
Kate: I don’t sleep much
Logan: Just dream property, that’s an impressive list. She’s regularly on the BBC, ITV, ITN and is in all the important press with commentary on the market. So thanks for joining us Kate.
Kate: Pleasure, thanks for having me.
Logan: I know your schedule is incredibly busy to say the least; Kate drove rather quickly to join us today. I did say I wouldn’t say that…
Kate: The cars still smoking outside!
Logan: Oh dear, at least you got there. At then Vanessa Warwick, I mean Vanessa’s an absolute superstar, I’ve known Vanessa now for about a year, she’s been an inspiration to me and she has a real passion for engagement and social media. And Vanessa started somewhere very different to property. She started out as an MTV VJ, and again in her words exchanging rock and roll for bricks and mortar, so that is a pivot, as we say. She’s been a property investor since 2004, and along with another superstar inspiration for me, Nick, her husband, has built a portfolio in North London and the South East.
Vanessa: That’s right yeah.
Logan: Yeah, pretty exciting. As I said she’s got an enormous online presence across social media, I think you’ve got over 10,000 followers on Twitter, is that right Vanessa?
Vanessa: Yes I think its coming up to 12,000, yes.
Logan: Wow, ok. Dwarfs my miniscule Twitter following. And you’ve even contributed to over 10,000 posts on various property forums. Impressive.
Vanessa: Indeed
Logan: Impressive. Vanessa and Nick founded PropertyTribes, which I’ll give a personal plug as perhaps the most close-knit community of landlords and property owners in the UK. And it’s exciting for Movebubble to be a part of that, because we sponsor the Digital Tribe. Vanessa is also currently the Digital Communications Consultant for a national approved letting scheme, and is busy speaking all over the UK at property events. And much like Kate, is well used to the media and microphone, being interviewed for the Guardian, the BBC, radio 4, you name it. So yeah, another big welcome to Movebubble Me, thank you so much for joining us. I suppose we should get stuck in. This is a lunch date, a light lunch as well call it. And we’re going to try and keep this around about 30 minutes, give or take. For all the audience now, don’t forget you can ask questions throughout the show, you can either use the GoToWebinar control panel, there’s a questions and a chat tab, or you can tweet @Movebubble, or you can also tweet either one of our panelists. Vanessa yours is @4_walls and Kate yours is @KateFaulkner, ok, perfect. So between us we’ll have our eyes and our ears open. There’s a thread on propertytribes where you can ask questions as well. So as I say, between us, hopefully we’ll catch any questions you want to throw at us. So lets start with a simple, well simple questions the wrong word but something to get us going. Is there a housing crisis here in the UK, and is this different to a property price bubble?
Kate: Oooh, who wants to go first, do you want to go first Vanessa?
Vanessa: I don’t mind, it really depends on how you define ‘housing crisis’. I think there are a number of major issues affecting the private rented sector. Obviously with what we’re talking about today is mainly to do with supply and demand and there most definitely is a supply and demand imbalance in the UK and I can only see that getting worse over the years ahead. It’s a very interesting time to be having this webinar, because for the first time, this year, private rented sector and housing tenure outgrew social housing tenure, so private landlords in the UK are now housing more people than social housing, and that’s a very interesting kind of tipping point in my opinion, and there’s just so many factors that are affecting this supply-demand imbalance, some of which have been around for years and will never change, of course the major one being that we’re an island, and nobody is making anymore land. That’s never going to change, so there’s never going to be more land, that’s a major issue. We’re not building enough homes every year to meet the demand, people are living longer, many factors affecting it, and one just really came to light yesterday and I don’t know if Kate has any thoughts on this, but the lenders are now saying that they are going to be very reluctant to lend to anybody for a residential mortgage over the age of 40 years. So, where are these people going to live who can’t get a residential mortgage because they’re too old in the eyes of the lenders. They’re going to have to live in rented accommodation, so we have a strange situation where people are having to save much longer to get a suitable deposit, so they’re saving until they’re in their early to mid 30’s, but then by the time they’re in their early 40’s, they’re too old to get a residential mortgage. So there seems to be that the window of opportunity for people to actually own their own home has squeezed very dramatically. And that is going to have a huge impact on the private rented sector.
Logan: It fascinates me your last point, because life expectancy is going up, so you know, we’re now going to be spending much more of our lives in rented accommodation. Kate have you got any insights on the UK housing crisis?
Kate: Yeah, I think that it is a UK wide housing crisis to some extent, but there are some areas where I think there is a crisis, and I think in terms of the amount of properties that are available for the number of people that want to live in them, and in other areas I actually think that the crisis is that people are being told so often that they can’t afford to buy, that they don’t actually realize it is possible. So to give you a good example, if you take two comparisons, lets take London, our capital city – a massive supply and demand problem. Now, interestingly you don’t compare London to anywhere else in the UK, you have to compare it to Paris and Milan and New York because it’s a capital city at the end of the day, and it suffers with all the problems that other capital cities do, but when you’re in a situation every one of the 32 London boroughs now, the average house price is over a quarter of a million, and having been looking there myself, its very hard to get a decent property for under that. So, we’ve now got a situation there in whereby any first-time buyers not only have to save £10,000, however much to actually buy a property in London, and people might say that’s impossible, but actually with shared ownership it isn’t, and that’s definitely the way forward in somewhere like the capital city. But they also then have to save double, triple, the amount that anybody else does outside the capital because they’re being stitched with a £7,500 + 3% stamp duty and that’s completely and utterly kind of unfair, so somewhere like London you’ve got a massive housing crisis, nowhere near enough properties being built for the of people that work there. No consideration for the fact that it’s actually great news that London prices have gone up, but there’s no point in my mind in owning a million pound home in London if it’s on fire and the firemen can’t afford to live near enough to put it out, the police can’t afford to come and help you out if you’ve been burgled and indeed an ambulance can’t come to you because they cant get the people there. And that’s the serious issue that we have in London is that the communities are going to fail if they don’t sort out the housing crisis there. If you come to somewhere like Nottingham, property prices are…you can get a decent 2 bed for about £60,000, if you take it two people are on a joint salary of £20,000, it’s very easy for them to afford a property. I think the problem is that we tell everybody that there’s a housing crisis everywhere, so everybody thinks that it’s impossible to solve, so nobody really makes the effort. And the housing crisis we have exists because for the last 30 years, our MP’s in successive Governments, doesn’t matter what colour they are, and the majority of local authorities have utterly, utterly failed their local communities and they are not putting enough roofs over peoples heads. Although this is now recognized, it is staggering that coming up to the next election, they are still not promising to find a way to put enough roofs over peoples’ heads. In London, we are still building half of what we need to, and that’s still a big amount, and elsewhere I think we’re building something like, I think the best is, we need about 250,000 homes, plus a million that we didn’t build during the recession, plus then you’ve got the 250,000 homes that you need every year, and we’re on what, 100, 150 maybe at best. So there are huge failings in the marketplace. It’s down to the MP’s, it’s down to the local authorities and they have to be doing more, faster, because it’s not fair on local people.
Logan: I find it fascinating because, Kate Barker 10 years ago, reviewed the housing market and suggested just that, that we needed to keep building, well the figures are 260,000 homes, and we’re now at 115,000 so it does seem to be a fairly major issue right at the top with the policy makers. So in shortness, there are not enough properties in London specifically, outside of London the disparity we see is an interesting one because you know, people argue that England is a one city country, and in my head I can already see another webinar coming out about infrastructure problems within the UK.
Kate: There would be a lot of other cities very upset if you said that.
Logan: Absolutely but you know, its really what the press says, and people get pre-occupied with the housing crisis in London, and you’re saying that prices in Nottingham are absolutely affordable. So this is an interesting dialogue because you know, I’m sat in London, and I’m sure many of our listeners aren’t sat in London, so sort of their micro-communities aren’t quite seeing what we’re seeing here in London
Kate: But they’re being told, so even if they’re not seeing it in their area, their perception is that they think there is a housing crisis everywhere and their perception is that they can’t afford, so they don’t bother to look and they don’t bother to save. So, a good example is, people that I know that live in Nottingham think that you cant buy a house for any less than £120,000, and they think that they’ll never get a mortgage to buy that kind of property. And that’s utter rubbish because its not that kind of level and we are driving, the media, and those hunting this kind of area, are driving people to not buy, and driving people to believe they cant afford, when actually it’s not always the case.
Logan: It’s interesting, the dynamics there are perhaps beneficial to property investors outside of London, if less people are looking to purchase property, there’s more opportunity for landlords, is that…
Kate: Yeah, I mean I find Nottingham fascinating, I was at one of the property clinics down in London and I was astonished how many people investing in Nottingham, I mean Nottingham like most areas splits into 2, your nice [inaudible] suburbs and your wealthy [inaudible] suburbs, not going great on capital growth but they’re doing alright, they’re starting to make a recovery since the falls back in 2009, which everyone seems to have forgotten about, which I find astonishing, when we talk about prices rising, in the main, they’re recovering. There’s a massive difference. North of Nottingham, fantastic for yield but I’m telling you capital growth doesn’t exist, it hasn’t existed for a long time. We’ve got flats in the center of Nottingham sold for £140,000 back in 2005, 6, 7, selling at 58. There’s no way that they’re going to grow 100% in then next 10-20 years in value, you know? I think that there’s more of those dilemmas out there than people realize.
Logan: It’s a fascinating topic, you know, it’s fuelled by the media. Is there a responsibility here for business and/or policy makers to make sure this is more evenly spread, and what can they do?
Vanessa: Well I think the first thing that Government can do is build more homes, one of the initiatives they’ve put into place fairly recently is permitted development, where old office blocks can be turned into apartments without going through rigorous planning processes, which has definitely freed up some of the old out of use building in city centers and town centers to be turned into residential accommodation. So that window is currently open but there’s no guarantee that when it expires they will renew that. But I think that if we go back to grassroots level that there is the issue of education and financial education as well, and there’s also I think a stigma attached if you don’t own your own home and I struggle with that, because where you live is a lifestyle choice, and someone that always springs to mind is a very good friend of mine he’s got over 100 buy to let properties, but he actually lives in a rented property and that is his choice. He actually lives in a rather stunning barn conversion and I think this is one of the points I wanted to get across about the private rented sector and about the role of the private landlord is that the private landlord offers a massive amount of choice to people that may not necessarily wish to own their own home and I think that we are going to become much more a European model in respect to the number of people who are renting compared to the number of people who are owning and I think that we’ve got to accept people and their lifestyle choices and not stigmatize the fact if you don’t own your own home. It’s as simple as that we’ve got this, I don’t know, mentality in this country that an Englishman’s home is his castle, and that’s kind of outdated. Tenants can feel very secure in their property if they have an ethical landlord, and they make that choice to be a renter if they don’t wish to buy, it’s a very complex issue and its very much clouded by the media who try and create memes that people jump on the bandwagon and expand on, and in reality supply and demand is actually a very simple concept, as Kate said successive governments have not maintained the house building program in this country for the past 30 years and we’re lagging way behind, and the fact is that more and more people are coming to the UK to live and work here and they are putting even more up the pressure on the demand side of it, so it really is down to Government to take action, and its very interesting to know that housing is now a top 3 political issue on all agendas as we move forward to the May 2015 election.
Logan: Yeah there’s certainly no surprise there, a recent report come out from KPMG and Shelter, I’m not sure whether you’ve managed to read it, but it talks about…where is it, let me just quickly find it, I made some notes on it earlier. So it says that the cost of living being the most important issue in determining which party candidate to vote for, and of this 50%, a whopping 72% say the situation would be improved by lower housing costs, so you know this is a hot topic, right? Not just for us, not just for renters and the property owners and the landlords but also for politics. Now, to me I think that there’s a concern that we might see poor policy choices made for short-term populism i.e. to get voted, not the right long-term choices. I’m not sure what your thoughts are on that, Kate?
Kate: Well, I’ll give you a great example. The problem in the private rental market from an affordability perspective is hot on the agenda at the moment, and the reason that problem exists is because that’s what successive governments have created a policy to support. So, this started back in the late 80’s and whether you agree with this stuff or not, it’s almost irrelevant, this is kind of the way it’s happened, so back in the late 80’s, huge sale of 2 million properties being sold off through the right to buy. So the idea being that we’d chuck people out of social housing and the need to maintain these properties, then rather than build and cost the taxpayer of building social homes or maintaining social homes we will drive them into the private rental sector, now that is – that led to the likes of buy-to-let really coming to [inaudible] what I find interesting with this, is that the way that buy-to-let took off is that it needed finance. To not be given based on salary but based on rent, which is what happened, but the mortgage lenders said we’ll only do that as long as you stick to a maximum 6 months tenancy agreement, so that’s where the AST came in and that’s where the 6 month tenancy agreement came in, to reassure lenders that they could kick people out and they could then sell those properties on if they needed to. Now we’ve moved from that now, to letting agents and landlords being vilified for normal business practice. Firstly, renting properties at a price that they can afford vs. their cost, but also at a price at which they can get tenants in. And lettings agents charging some fees, I appreciate that some charge an extortionate one, but successive governments have refused, and we’re not just saying haven’t, but have refused successive calls for the last 25 years to regulate to private rental sector, so that when they do put somebody who’s socially vulnerable or low paid into that market, it’s regulated, just like you wouldn’t expect to go to a hospital where somebody hadn’t checked if the doctors and nurses were ok. You’d kind of want them to check that the letting agent was a good guy or girl, and the same for the landlord. But governments refuse to do that, and now the policy is, ‘I tell you what we’ll do’, because those people can’t afford this and because we’re spending this huge amount of housing benefit, and these greedy landlords as they’re called are taking this housing benefit from people, they’re now blaming them for the affordability problem the government has caused, if that makes sense. And that scares me with these policies coming out, they’re going to ban tenancies, Labour want to ban tenancies, and I’m not saying all parties get it right, I’m certainly not picking on Labour with it, but this is a classic case of yes the MP’s are starting to take property seriously now and so they should, it’s a bit late, but better late than never, but what they’re not doing is really understanding who are the people are that they’re trying to engage with and what the policy changes are. They’re not blaming the mortgage lenders for lending money to rogue landlords, they’re not blaming the mortgage lenders who are doing very little to educate a landlord and who do nothing to make sure that the property is legally let, typically neither do they do that for the insurance companies either, it’s all the fault of the landlord, it’s all the fault of the letting agent, when actually it’s not their fault at all. The reason that some people are struggling to afford the private rental sector is because they were people that in the past should’ve had a social home to go to, and successive Governments decided not to build it, and now what they’re doing is picking the front line of the industry only, not anybody else, and that is why they’re getting their policies entirely wrong.
Logan: Yeah, I know I mean, there’s a statistic here that I found yesterday, it says ’29 of the 30 years up to 1978, local councils built 90,000 homes per year, in 1999 this was 50. So it dropped off a cliff.
Kate: You’d be lucky if it was 500 now
Logan: Yeah, I don’t doubt, its absolutely bonkers, you know as you say, property owners, landlords are vilified and sort of dragged kicking and screaming through hedges in the press and it doesn’t seem fair and I think what that does for the renters is it makes renters anxious I think to deal with property owners and to deal with agents and that’s one of the things we see at Movebubble.
Kate: And what they see is, they see it as the norm so if you tell everybody, my background is marketing, so if everybody is told, which they are on a daily basis, ‘all letting agents are bad, all landlords are bad and all rented properties are horrible’, if you turn up to a letting agent that doesn’t treat you very well, or a landlord that doesn’t treat you very well, or you find a property in a bad condition, they assume its normal. Whereas what we should be doing, and I strongly urge the housing groups and I know they’re trying to do the right thing by their tenants, but actually that kind of stuff isn’t helping, we need to say if you use an agent make sure they are [inaudible] registered or have indeed got the client money protection insurance, even though they brought the ombudsman’s requirements in, that’s not enough in my view because they don’t have to have client money protection. If you’re renting from a landlord direct, make sure they’re a member of the RLA or the NLA and ask 3 things when you turn up; can I see the energy performance certificate? Is there a gas safety certificate so there’s a boiler? And where do you protect my deposit? Those are the messages that we need to get out, and nobody mentions them.
Logan: No, absolutely.
Kate: And you know, if we all went out with that message then tenants would get a much better, and what Vanessa said was crucial to this, is education. And we’re not getting that, and there is no support for the big guys in the industry, there really isn’t and that has to improve.
Vanessa: Kate’s absolutely right, it is about education and awareness, but its also about enforcement and it’s shocking that just this morning I’ve read, I need to check the story but it was something like 99.5% of tenants haven’t heard of mandatory redress, so this is a new government initiative which was brought in on the 1st October that all letting agents have to be a member of a property redress scheme, of which there are 3 Government approved schemes to choose from. But this has completely passed tenants by, they don’t know what to ask for, and what Kate said about the 3 questions they should ask is absolutely right. So it is education but it’s also enforcement, but unfortunately whilst there is all this legislation that the good guys, the ethical agents and landlords adhere to, the rogue landlords and lettings agents just ignore it, they stay under the radar and they carry on with their unscrupulous practices. And it’s not enforced, so therefore there’s no incentive, and the message isn’t getting out there that if you act in an unscrupulous manner there are heavy penalties and it’s utterly disgraceful, the local councils could do so much more in monitoring the quality of private rented accommodation, I think Newham council is one of the most aggressive they’ve introduced mandatory landlord licensing and they are literally going from street to street, knocking on doors and checking private rented accommodation, these kind of actions are the only things that will weed out the rogues and improve standards in the private rented sector, which I know is something Kate and myself feel so strongly about, it is the minority of agents and landlords who cause a problem but you know that’s what you hear in the press, its boring to hear how an ethical landlord provided a superb home for a mum who had just lost her husband and her job and was on benefits, you don’t hear those stories so its very much about consumer awareness and Government can play a much bigger part in that, they recently released the how to rent guide but how many tenants even know that exist? You know, this basic stuff, I almost think when people leave school they should have an hour session on managing your finances and how to find a suitable rented accommodation. Being a founder of a property forum I hear horror stories everyday about the conditions that tenants are living in and what they have to put up with and its got to be led by policy makers, its got to be community led as well and this is very much where the likes of PropertyTribes, PropertyChecklists and Movebubble, we can all work together to create this awareness for consumers.
Logan: Absolutely, I think personally, policy might lag, might be a bit too slow for people but I certainly agree that the community focus is really important. I mean some the things we see at Movebubble is that renters want foresight about who they’re dealing with as much as property owners and landlords want foresight about the renters and so it’s kind of providing that and providing the renters a voice, if it’s a bad property and being treated badly then they should have a voice that’s visible to other renters and it should damage rogue landlords and agents, it should damage their business quite considerably.
Kate: But the thing is with this is, and I’ve been doing property advice for consumers now for, well I think we’ve just celebrated 10 years, and the issue I have is they don’t ask, and the reason they don’t ask and they don’t do the checks is because we have this poor communication, I don’t think the landlords and agents are particularly good at, the good ones are good at communication the good things they do. So they don’t say, you know in this area when I talk to a tenant I say look, before we talk about anything else, please just do 3 things for me before you go and view a property, ask for these 3 checks, if you turn up and they haven’t got one, run away. But they don’t know to ask, because all they hear in the media is like Vanessa said, bad stories. Very rarely do they get educational pieces, and then because the media don’t know to ask, they go through bad stories so they assume that all the industry is kind of bad. And I think it is this, and I call it the 3 E’s, which is the education, the enforcement and actually the excellence of PRS, which we don’t communicate enough. And one of the things the Government is doing, which this government are doing which hopefully whoever gets in will continue, is very interesting, one of the reasons why we have so little supply thus southern, is two fold, one is we don’t solve bills as much as anybody else, so that’s an interesting one but the second thing is we don’t have institutional investors like they do abroad, so in our country 1% of our housing stock is by large landlords who maybe have lots of flats and 200 funded by pension payments etc. Abroad something like America has 20% of it’s housing stock provided by these long terms, high quality landlords. Similar and even more in the likes of Germany, Netherlands etc. So we’re missing out on this huge stock, and do you know why we’re missing out on it? Because in the late 60’s they introduced rent controls, again something else that is back on the agenda, so the thing that makes me laugh is that in this country we have rent controls, already we have it in the social sector, and the result has been that since 2008, rents in the social sector, and this is English Housing survey by the way so its highly robust, have gone up by 22%. Private rental sector rents have gone up by 7. 7. And on average rents go up by about less than 1% a year, so we have this odd situation that everybody is shouting for tenants to have rent controls, the reality is, run the [inaudible] lettings index, if we did have rent controls, I estimate that people will be paying about £120 more a month on a £720 rent than they are now, if you apply the same increases that social landlords have access to. Our rents and landlords can only rent to people based on what they can afford and what’s in their back pocket. And that’s based on wages. Wages haven’t gone up and their rents have gone up.
Logan: I’m glad you bring up rent control because it’s obviously one of the mechanisms by which Governments feel they can have an impact. Vanessa, what’s your thought on rent control?
Vanessa: Well I don’t agree with it for the reasons that Kate mentioned, but you know it’s a fair market. The supply of brussel sprouts is based on supply vs. demand, the housing market is no different, it should be allowed to find its own levels within, it stands to reason that the capital city is going to be a very desirable place to live and then it stands to reason that commuter towns within 2 hours commute are going to be very desirable places to live. It does stand to reason and that should be allowed to find it’s own level and I think one of my main concerns is that all of this anti-landlord sentiment in the media, it creates them and us and I do my best through my online contributions to try and dispel that and I was a tenant once, I lived in rented accommodation, I’m not this greedy landlord that’s making a fortune out of providing private rented sector accommodation. What must be understood is all a landlord is, is somebody who is willing to take on the financial risk of the tenant not paying the rent. Now I’ve chosen to take on that risk but other people may not want to take on that risk and that’s their choice but it is, as you said at the beginning, it is a business, and businesses should be allowed to make a profit, it’s healthy for the economy, landlords pay tax, we support a lot of services like lettings agents, builders, handy-men, accountants, we actually make a massive net contribution to the economy. Those things are never mentioned in the press, and the majority of landlords in this country, there are about 2 million of us small, private landlords; the majority of us run an ethical and compliant business and want to put a good roof over tenant’s heads and provide a great service for them, it’s only the minority that cause all the problems, but because like I said earlier, legislation isn’t enforced, they just get away with it. So, it’s so much about consumer awareness and being led by policy makers and Government and also as I said through community awareness as well.
Logan: And lunchtime chats just like this. Sorry go for it Kate.
Kate: Yeah, one interesting thing is, Vanessa’s absolutely right, and we’re actually trying to work on the numbers at the moment, there has been and I’m thrilled this has happened, we are stuffed as a country if we don’t start building to the rates that we need. We are starting to see a mood change; the National Housing Federation has got a fantastic campaign called Yes to Homes, and in the past I think we have always seen new homes as a bad thing, they weren’t always best built back in the 80’s but that doesn’t matter now. We have some of the best new builds, the best quality new builds in the world, that are built. And, one of the things that’s really changed the hearts and minds, certainly of the MP’s is that for every pound you spend on a new build, it delivers £2.86 back into, what is typically the local economy. Huge number of apprentices, we all talk about young boys and girls that aren’t getting well paid jobs, the one thing I love about property is that you don’t need a degree to get into it, why should you have to have a degree to get on in life, you can come as an apprentice, and there’s a load of people I meet who are right at the top of property gain and they just started work as an apprentice on a build site, or a runner in an estate agent. We talk about all this social mobility actually, property is fantastic at that, we’re better I think at it than any, any other industry, also lots of women in it as well. You know, sitting here with me and Vanessa, you’d struggle to get that if this was a different conversation in a different sector. So we do have to understand that property is a massive, massive contributor to our economy. And Vanessa’s absolutely right; when you look at what we spend as a landlord it’s a phenomenal amount of money. Look at what letting agents spend on their businesses, if you wipe out their tenant fees, what’s that going to do? How many people are going to lose their jobs? Because in a decent letting agents, you’d have one person looking after, who’s paid, effectively, to look after the tenants. And that’s all their job is, making sure the tenant is ok. And, what if they start losing their jobs? How’s that going to help everybody? It’s certainly not going to help the tenant. They’ve got nobody to look after them anymore.
Logan: No, I find it fascinating because what we’re saying is that there is a place for agents, absolutely. There’s a place for good agents and I think it’s very much about this increasing visibility, and at Movebubble we believe we can do this through technology, you know we can increase visibility for renters, owners and agents alike so they know who they’re dealing with, an that people don’t make mistakes. I’m aware that we’ve snuck over half an hour.
Kate: Where did that time go?
Logan: I know, I told you it goes quickly; it’s always a bit of fun. So, we’ve got a couple of questions here from some people. So, Carly’s got a question, ‘what piece of advice would you give to renters to help them acquire rental properties in the future?’
Vanessa: Well, I’ve written, oh sorry.
Kate: No, you go for it Vanessa.
Vanessa: Is that ok? Well I’ve put a post on property tribes with the questions that tenants can ask of a landlord to ensure that they’re an ethical landlord, and ditto working with a letting agents as well there’s quite a few questions that renters can ask so I’d be quite happy to drop those links to you after the event.
Logan: Ok, perfect. We’ll include them in the show notes.
Kate: We’ve also got on propertychecklists a quick how to rent guide (here), which we make freely available, and all our checklists are freely available all you have to do is sign up by email. But also, we’ve got things like, with Shelter have supported our ‘ How to avoid a rogue landlord’ (here) tenancy deposit scheme (here) they’ve supported…you know usually everybody is quite happy to start off, it’s towards the end of the tenancy it gets a little bit dodgy, so they’ve supported the deposit side of things, and then how to leave a tenancy as well. So any questions you’ve got should be answered on there, and then we have a free Q&A service as well so we’re happy to help anybody who needs it.
Logan: Ok, fantastic. Just a question from my end, do you see, is there anything specifically that renters can do then, are landlords looking for high earnings, are they looking for good credit, are they looking for great references, a combination of all the above? What kind of makes renters stand out from other renters?
Kate: I think if they’re organized actually as well, so you’ve got to make sure that you reference ok. And for crying out loud, be honest. So I’ve come across situations whereby somebody badmouthed what is an excellent agent, and the reason they badmouthed them was because they failed to put any reference, which they didn’t tell anybody and as a result they didn’t get their money back, the deposit money back. And what had actually happened is that they hadn’t declared a CCJ. And, it’s like be honest! Don’t lie to the landlord or the letting agent, because that will cost you, so be organized, have all your stuff there for referencing etc. But be honest, this isn’t somewhere where you shouldn’t tell the truth. That’s what you want, is an honest tenant.
Logan: I think its, landlords aren’t out there to get you, I think its, they want to work with you and good renters want to work with landlords as well.
Vanessa: But we do, and the tenant who stays for 5 or 10 years is wonderful from a landlords point of view, we want to build strong relationships with our tenants and keep them in the property as long as possible, and help them put down roots. It’s in our interests that they have an enjoyable experience in our property, so it’s a bit of a fallacy because if we didn’t create an enjoyable experience for tenants then we’d have a massive tenant turnover and our business would probably fail so, for ethical landlords it makes perfect sense that we want to provide a high standard of accommodation and we want tenants to enjoy their times in our properties and to stay longer, as long as possible.
Logan: Absolutely yeah.
Kate: And just the other thing as well, as I know from a renting side that is a great way to go, but a lot of people don’t realize they can part buy part rent, I always say if you think you’re going to have to rent for the next 10 years, and you have no choice to buy, do have a look at the part buy part rent option. It might be a little more expensive actually the way it works out, but you cant put deposits even in London down like £5000-£10,000, and you get the whole of the house, it’s called shared ownership, you don’t share it with anybody, its your property, partly owned by the Housing Association for example, and the other thing to watch out for is that this Government, I guess that when they get in next year, are looking at a rent to buy scheme, and it might be worth looking out for what’s in your area. These things are promoted really badly, so talk to your local authority and find out what’s happening and where, because you might in 18 months time, or a years time, something might be coming available and if you knew about it know then you could plan ahead.
Logan: We’ve probably got time for one last question, and if there are any others we’re sorry, we’ll get these answered by Vanessa and Kate and we’ll post them in the show notes, because our light lunch is not so light anymore, we’ve only got a couple of minutes. So we have a question here from Jamie, it says ‘There are enough brownfield sites in the UK to solve the housing issue, discuss’
Vanessa: Lovely.
Logan: I actually read something this morning that said there are brownfield sites that had not far off a million plots for redevelopment, which is substantial.
Kate: Yeah, there are huge numbers of brownfield sites, and if think about it if you look over the past 15 years, we built on tremendous amounts of them, look at all the city center flats outside of London, Vanessa quite rightly recognized that not all offices are being used now with the economic change and some of those are being redeveloped into residential properties, there is an issue building on brownfield sites and that is that it’s quite expensive, so there is a problem with that. Also the issue we have with our housing crisis that it is so vast, it goes back, we need to do what we did back in the 60’s, what we did then was we built Milton Keynes, we built Telford and you can only get London to stretch so far and you can only get Birmingham to stretch so far. And as a result of that, not everybody wants to commute an hour and a half into Birmingham, you can go into Telford and it’s a lot shorter commute. So I think we need new towns, I think we need brownfield sites, we really have to rack up self-build, it should be far easier in this country than it actually is, and there are some great schemes locally as well, anybody in London though who thinks they will never be able to do it, go to Peterborough, they have sites readymade for you to self-build and you’re 45 minutes from Kings Cross, probably shorter commute than most of you are doing now. That is really ramping up and we need everything, I kind of describe our crisis in the areas like London, it’s ‘cobra stage’, you know when they have those cobra meetings, it’s that serious they’ve got to move. So brownfield won’t solve everything, we need new towns, and we need self-build outside of London. And institutional investors.
Logan: Vanessa, anything to add to that?
Vanessa: Yeah, just really as Kate said, to redevelop brownfield is very expensive, there’s often issues about decontamination of the land if it’s been used for a previous purpose like an old petrol station there will be tanks in there that have to be removed, it can be very expensive. And I think Government could help encourage redevelopment with perhaps helping on the tax side of things, tax incentives, we need lenders to come through with innovative products that help people self-build. It’s the whole property community that can work together, but you know it’s just not joined up thinking, it’s not really being led by, as we said, policy makers. But it’s interesting what Kate said about institutional investors because I think it’s just today actually it’s been announced that there’s a new buy to let fund being launched, which is an institutional investment and it’s the first one in the UK, so perhaps the tide is turning and we will encourage institutional investment into the private rented sector, and as Kate said these are very high quality landlords who have very high standards and that’s across the board in their offerings, so I think that’s a positive way forwards as well. The more competition that we have as well the healthier it is. The market is able to find it’s own level and tenants should vote with their wallet, if they don’t like the standard of a property they should move on and that will also help weed out the more poor quality of accommodation.
Logan: Absolutely. Lets end on a positive note then, thank you to Vanessa and Kate for coming. I knew we would go over half an hour it’s always too ambitious, I hope to keep it short and snappy but low and behold we’re about 50 minutes in. But, no-ones dropped out so thank you to all of our audience who have listened today. If you’ve got any additional questions feel free to throw them on either on Twitter or PropertyTribes and we’ll get round to answering those for you. We will make the show notes available and we’ll send them to everybody as well. So, once again, Vanessa and Kate thank you very much. Enjoy the rest of your 8 minutes of lunch.
Vanessa: Well I’d just like to say thank you to Kate for her efforts on behalf of consumer awareness. She does an amazing job, she is talking on so many platforms to so many influencers and her property checklists is fantastic for consumers and it’s a easy way for them to find out stuff that they need to know that’s going to help them make wise choices when they come to rent, so I’d just like to say thank you to Kate and keep up the good work that you are doing Kate.
Kate: Thank you, I’m going red. I don’t do that very often. You are very kind Vanessa, thanks.
Logan: I think as well Vanessa, you deserve a pat on the back for creating a community of landlords that talk to one another and engage and share insights and resources. So again it’s great to have you both on board, I really appreciate it.
Vanessa: Well thanks for asking.
Logan: No worries! So yeah, I’m not sure what the next episode will be, but we shall keep everybody in the Movebubble Me loop.
Relevant show links.
How to rent a property
How to avoid rogue landlords
Tenancy Deposit Scheme
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