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Monthly Archives: April 2020

Doncaster Property News

7.5% of Doncaster Workers Worked From Home Before Covid-19 – Wonder How Many More Do Now?

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Before the Covid-19 pandemic hit, 3,728 Doncaster people worked mainly from home, or about 7.5% of Doncaster’s 49,541 workforce (compared to the national average of 14.9%). Yet over the last few weeks, many hundreds, even thousands more Doncaster workers have joined them in their spare rooms or at their kitchen or dining room tables.

Amongst warnings from the Government that some lockdown constraints could stay in place into 2021, businesses are dealing with an unexpected cultural shift in how many of us do our work. Talking to many Doncaster people who have been asked to work from home, for many it has been a pleasant success.

Working from home does have some negatives though. I have found myself still working at 8pm/9pm and beyond as I have forgotten to clock out and whilst many people might think working from home means doing less work, more often than not, the reverse is true for industrious and hardworking employees. When you don’t have that break of the commute the office, the workday can blend into the home life. Talking of commuting, the average British worker has a daily commute of 11.9 miles, whilst locally…

The average daily commute for a Doncaster worker is 9.3 miles

A least working from home, the commute is only to the dining room table or spare bedroom. Speaking to some friends of mine that are new to working from home, they said to me that they can feel out of the office-loop as they miss the ‘water-cooler’ moments or spur-of-the-moment brainstorming session over a brew, it’s tough to reproduce that from home.

Don’t forget to get into your garden (if you have one), stretch those legs. Ensure you are taking advantage of the daily exercise allowance. I see so many people walking around our neighbourhood daily who I haven’t seen before. Let’s hope they keep up the habit once lockdown is removed. You have to admit, it’s quite nice especially as there are far less cars on the road.

Doncaster workers commute 387,497 miles a day to work

That’s all the way to the moon and over half of the way home

 again – every day!

Some feel guilty if they don’t reply to co-worker’s emails or phone calls straight away. My friends stated that they didn’t want their team-mates to wonder if they were taking it easy rather than pulling their weight. The best advice I can give from working with my team is to overcommunicate, and I suggested (as I do to you) to tell their bosses and colleagues what you are doing and share their accomplishments using those video conferencing software packages.

The really hard part is having a dedicated space in your home. Attempt to set up a workspace and make it out of bounds to the rest of your household while you are working (although that is very difficult when you have children, or your partner is having to work from home as well). Is there anything worse than being on an important call to your boss or a client, only to have a delivery driver knocking on the door or having your kids and dogs yelling and barking in the background? It’s a balancing act!

Interestingly, looking at the stats and this internment in Doncaster people’s homes could be a catalyst for people wanting to move home later in the year be it for rent or for sale, thus giving a vital boost to the Doncaster property market. Would it surprise you that…

9,782 Doncaster households are either at full capacity

or officially overcrowded?

The definition of full capacity is when the household has enough bedrooms for the occupants. The definition is set out in ‘The Allocations Code of Guidance’, which recommends that the ‘bedroom standard‘ is adopted as a minimum measure of overcrowding.

This means one bedroom should be provided for

  • each adult couple.
  • any other adult aged 21 or over.
  • two adolescents of the same sex aged 10 to 20.
  • two children regardless of sex under the age of 10

That means 21.16% of Doncaster households do not have

a spare bedroom for their occupants to work from

(compared to the national average of 16.64% of household)

Even worse, I suspect there are many Doncaster families with two teenage boys or two teenage girls, and guidance is suggesting they can share a bedroom – do they live in the real world? This means there are probably even more Doncaster households that are at full capacity or even more overcrowded than the stats suggest, meaning plenty of people will be working from dining room tables (if they have a dining room that is) and quite probably the kitchen table … a recipe for even more people wanting to move home later in the year.

So, I don’t know how many Doncaster people are working from home, yet looking at the newspapers the consensus is that it has at least doubled. For all the reasons mentioned in this article, this looks like we could have a pressure cooker scenario of demand for Doncaster property once the restrictions have been fully lifted.

Meanwhile, a message to all you new homeworkers in Doncaster. Working from home is a tough one. The best advice I can give is to change your way of thinking. I know many friends who are missing their offices right now, yet is office-working really so great? Consider the relentless risk of disturbance when you are trying to finish that important project, the recirculated air conditioning with its germs, the shortage of quiet meeting rooms and as I have already mentioned before, the drawn-out and expensive commute.

Try breaking the cycle that being at work – time is productive and not being at work – time is only leisure. The new way of thinking that accepts the concessions of home-working and discards the traditional 20th Century conventions of office working. Yes, the downside is that as humans we are very sociable creatures and we acutely feel the need to be in face to face contact with each other often, meaning lockdown is quite tough for many of us. Yet, if we are able to connect the positive prospects for the future working and the situation that Covid-19 offers us, then together as a society we should be able to find the right balance between working from home and coming together. In the meantime, be considerate of each other and keep safe we are all in this together and we will all overcome this together.

Doncaster Property News

New Electrical Safety Regulations could cost each Doncaster Landlord £350+ in the next 13 months

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Doncaster Electricians are going to very busy in the next 13 months as they will have to test the electrics of every private rented property in Doncaster and potentially may have to install new fuse boards and wiring in some circumstances.

New regulations set out in the Housing and Planning Act 2016 gave the Secretary of State of Ministry of Housing, Communities and Local Government the authority to compel private landlords to test their fixed electrical systems.  Currently, these responsibilities only apply to licensable Houses of Multiple Occupancy (where a house is split into individual rooms) yet these new rules will come into force for any new tenancy or renewal of any private rented home from the 1st July this year (2020).

All new tenancies from the 1st July 2020 will need

to have had their electrics tested

The new IET electrical regulations enforce a duty on all private landlords to ensure that their electrical installation complies with the 18th edition (from 2018) of the IET wiring regulations.  Therefore, any property built before the middle of 2018 will have electrics to 17th edition regulations (or a previous edition).  It might not sound a lot, but the 18th edition regulations were a substantial update over the 17th edition which were published in 2008.  Now, just because a rental property was built with its electrics up to the prevailing 15th, 16th or 17th regulations at the time of building, it doesn’t necessarily mean it will automatically fail this test.

A qualified electrician will need to test your rental property against the new 18th Regulations (as that is standard practice in the industry), which will cost in the region of £150 plus VAT for a small one bed flat through to £250/£350 plus VAT for a large 4 or 5 bed house (again these are ballpark figures).  The Electrician won’t fail a property who complies with a previous regulation (e.g. 16th or 17th) unless there is a good reason to do so.  No doubt there will be further clarification notes issued before the implementation date to sort this out – and I will keep you informed in this blog.

Electricians are telling me any property built after 16th Regulations came into force in 1991 (and they deem it to have failed the test) will probably require a new fuse board and other minor works at an average cost of around £355 per property, although it could be as low as £300 and up to £500 per property to upgrade, meaning…

The potential cost of upgrading every Doncaster buy to let

Home to 18th edition regulations (if they all failed) could total £2,988,745

Some Doncaster landlords might think they can circumnavigate the regulations by renewing the fixed term every 6 months, yet the Government have  protected against that by stating,  irrespective of what tenancy is in place, all rental properties by the 1st April 2021 must have been tested against  the 18th Regulations standard.

My concern is all 8,419 rental properties in Doncaster will need

their electrics testing before the Spring of 2021 and that there are only 60 qualified electrician firms within a 3-mile radius of Doncaster to do all these tests and work

Doncaster landlords must give any new Doncaster tenant a copy of the inspection report before they start the tenancy.  Also, Doncaster landlords must give a copy of the report to any prospective tenant who asks for it in writing within 28 days of a request during the tenancy itself.  In practicable terms, from the 1st April 2020, this means that the Electrical Report will need to be ready and work done when the property is placed onto the market for rent.

The local authorities are tasked with policing this – and they too have the right to request to see copies of any Electrical Report and works done.  They can force a landlord to comply with the legislation and also may issue a civil penalty up to a maximum of £30,000.

Remarkably, if the letting/managing agent doesn’t organise the Electrical reports, there is nothing in the legislation which allows a landlord to pass the blame onto their letting/managing agent.  That means Doncaster landlords could be at significant risk from dishonest or badly organised letting agents who won’t/don’t sort the electrics out, so my advice to all Doncaster landlords is to speak to your letting/managing agent right now and plan ahead.  Rest assured, we have had plans well in hand for our Doncaster landlords since last year, because I knew this legislation was on its way.

The regulations are obviously important for the safety of tenants and, in essence, these new laws and regulations will mean new accountabilities for the private rented landlords with not much time in which to get prepared and be compliant.  If you are worried about these new rules or don’t have ultimate confidence in your current agent, then please do pick up the phone and let’s have an informal chat about how we can help you with this issue, you don’t want to fall the wrong side of the law do you?

Doncaster Property News

What Will Be the Effect of Covid-19 on the Doncaster Property Market?

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So now we are only a matter of a couple of weeks into lockdown, yet can you believe it I am still speaking with agents from all over the UK, and I do not jest, properties are still being sold and let even in these unprecedented times. Yet I would like to address the question I have been asked many times recently “What will be the effect of Covid-19 on the Doncaster property market in the short, medium and long term?”

These are obviously unchartered times, yet we can look back in history to give us clues and more recently, the bounce back that is happening in China (and their property market). The Covid-19 situation will touch all parts of the Doncaster and UK property market, and so in this article, I will be considering its impact on Doncaster property prices, transaction numbers (i.e. the number of people that move home), Doncaster buy-to-let landlords and finally tenants and the rents they pay.

The Three Issues with the Virus and the Property Market

The first issue has to be the lockdown itself. Limitations on society’s capability to go about their normal working life will hinder the house buying/selling process. The practical difficulties of moving home and expediting the property sale; from the viewing itself, the Energy Performance Certificate being carried out, the surveyor checking the property for the lender etc., are all issues. Yet the estate agency and legal industries are coming up with some innovative solutions, from virtual viewings to legally watertight delayed completions, where the old owners stay in the house under licence during the lockdown, and the move will take place after the lockdown period.

Secondly, the UK housing market has never liked ambiguity or uncertainty and this virus will play a part on people’s feelings and sentiment towards moving home (or not).

Thirdly and finally, there is the issue with the money people have, be that wages, whether they have a job (or not) and their overall affluence, on the back of the of 29.4% stock market decrease in the last two months (correct at the time of writing this article).

The Background Economics

The economy drives everything including the housing market – and the overall measure of the economy is the Gross Domestic Product figure or the GDP (the GDP is basically the total value of all the goods and services created by the whole UK economy in one year and it currently stands at £2.15 trillion).

Looking at what has happened in China, most economists believe the UK will experience a short, yet sharp economic shrinkage in Q2 2020 with GDP set drop by 4% to 7% in the one quarter depending on the extent of the lockdown. Then GDP is expected to level out in Q3 2020, and then a significant ricochet (how significant depends who you listen to) in Q4 2020/Q1 2021.

Now putting politics aside, I have been impressed with Boris Johnson’s response with wide-ranging support for the UK economy and businesses, and whilst it’s far from perfect, help has been in the guise of the Bank of England reactivating its Contingent Term Repo Facility increasing liquidity and keeping the money markets going (important as that was what the issue was with the Credit Crunch), business grants and Government backed loans, together with telling lenders to take a compassionate line to those unable to make mortgage holidays and finally the furloughing of staff, thus allowing a quicker recovery in the economy.

What Will Happen to Doncaster Property Values?

There are a few doom-monger economists predicting Armageddon, yet I feel a lot of that is to get column inches in the newspapers. The Doncaster property market is less exposed than it was in the previous four historical property crashes in 1972, 1979, 1988 and 2008. This is because of the following reasons…

  1. Before each of the four crashes, there had been a significant upward spike in property values prior to the crash. We have not experienced that over the last 12 months.
  2. Mortgage interest as a percentage of household income (nationally) was a massive 32% in 1988, 18% in 2008 – yet now it stands at just under 8% (because interest rates are so low).

This is all assuming we don’t have high unemployment. Yet historically, it has been proved house price falls are not caused by high unemployment. It is in fact, that it happens the other way around, that a housing downturn can (not always) create unemployment – yet with the Government furloughing people – this shouldn’t be such so much of an issue.

The value of an average Doncaster home currently stands at £164,900

As I will explain in the next section, the biggest effect will be on transaction numbers, not on property values. I suspect in the summer there will be some Doncaster homeowners who will want to sell at all costs, and not care what price they achieve. Savvy property buyers will swoop on those properties and drive a hard bargain, meaning there will be some short-term localised reductions in what properties sell in the summer for those that want to sell at any cost.

Yet, these reductions will artificially amplify the property value indexes in a downward direction in the autumn (the ones the newspapers mention when they talk about property value changes) because they will be based on the very low levels of property transactions that will take place in the summer (because there is always a lag). Interestingly we have seen this many times over the years because just about every spring for the last 20 years, we have often seen negative or very subdued figures in the House Price Indexes in the months of January/February. This is because of the lack of property sales on the run up to Christmas a few months before. To give this all some context, property values in Doncaster are 26.9% higher than 10 years ago – and nobody was complaining about those. To give you an idea what that is in pound notes…

The average Doncaster home has risen in value by £35,000 in the last 10 years

The swiftness of recovery in the autumn/winter from that point will depend on the state of the wider economy. With the measures (mentioned above) implemented by the Government, household incomes should continue to remain steady, and whilst holidays and luxuries may be shelved for a year, those Doncaster people who have been locked up in their Doncaster homes for weeks on end, might just consider making that move later in 2020, taking advantage of the ultra-low interest rates. This in turn ought to encourage a return to sturdier levels of house-price growth in the medium term (2021/2 onwards).

The Number of People Moving Home in Doncaster Will Significantly Drop in 2020

I foresee the number of people moving home (i.e. the number of household transactions) in Doncaster will significantly drop in 2020. This will only really affect the pockets of Estate Agents (as they charge their fee when people move – so if less people are moving, they will earn less) and the people associated with house moving.

Even with virtual viewings and creative legal work, the number of property transactions will be considerably obstructed over the next couple of months. Interestingly, in the Chinese cities that removed the lockdown first (in the middle of March) I have read in the press the number of property transactions has already bounced back to around the half of the medium-term average after only three weeks!

Interestingly, there was already a good level of pent-up demand in the property market before we went into lockdown. This was caused by people delaying their move because of the ‘B’ word (Brexit) over the last 12/18 months, which interestingly saw a massive upsurge with the Boris Bounce in December/January and February.

Worse case scenarios suggested by economists state transactions will drop to 20% of the normal 10 year average number of transactions until the end of Q3 2020, return to 65% by Q1 2021, increase to 100% by the end of Q2 2021 and then 120% in 2022, yet most sensible economists (and often those that stay out of the limelight and don’t go chasing headlines), believe transactions will reduce to 45% to 50% of the 10 year average until the end of Q3 2020, improve to 80% in Q4 2020 and 100% by Q2 2021 with potential for higher transactions numbers in the order of 110% to 130% in 2022.

It all sounds rather grim doesn’t it, until you dig deeper…

Remarkably, it must be stated the number of property transactions over the last 12 months in Doncaster are only at 80.1% of the 10-year Doncaster average … and this was before Covid-19

In the last 12 months, there have been 2,990 property transactions in Doncaster, compared to a 10-year average of 3,730 per year

Yet, let’s not forget, these predictions are from the 10-year long term average, and as it can quite clearly be seen, transaction levels are already at a low, even without Covid-19 and nobody was complaining about that apart from estate agents and removal vans!

With the number of Doncaster people moving being held back, I would anticipate seeing a build-up of supressed demand for Doncaster property from Covid-19, on top of the pent-up demand from Brexit, especially with many Doncaster families realising their Doncaster homes aren’t large enough to contain them as the lockdown experience will push many Doncaster households to move in late 2020 or possibly 2021 … and as every economics student knows, when demand outstrips supply (because we can’t all of a sudden build more houses), prices go up.

How Will This Affect Doncaster First Time Buyers, Those Trading up, Downsizers and Landlords & Tenants?

FIRST TIME BUYERS – I believe the banks will be a little more wary when lending money to first buyers with their need for large percentage mortgages. The demand for the Help-to-Buy Scheme has been increasing year-on-year, yet its pace of growth has been declining in the last couple years – I foresee demand accelerating in the later parts of 2020. There could be some good deals to be had from new homes builders looking to release cash in Q3 and Q4 later in the year? Maybe the Bank of Mum and Dad might be able to help, yet they too will be stretched, although they might be able to release equity down the generations to their children and grandchildren (see the downsizers section).

TRADING UP – Many Doncaster homeowners in their starter homes will be going stir-crazy in their smaller homes, and with interest rates at ultralow levels, some Doncaster homeowners might forgo holidays and entertaining, and consider putting their weight and finances into moving up market in Doncaster. That might also be easier, if the Doncaster downsizers start to move as well.

DOWNSIZERS – There are many Doncaster retired people, rattling around their large Doncaster home, with their children having flown the nest and possibly moved away years ago. These Doncaster people don’t need to move, and so are considered ‘optional home-movers’ – yet the Covid-19 crisis could be the catalyst to make them finally move to be nearer their family around the UK – releasing good sized Doncaster family homes onto the property market for the ‘Trading Uppers’ to buy.

LANDLORDS & TENANTS – I suspect there won’t be many Doncaster tenants moving in the next three to four months. Tenants have the peace of mind with a cessation on evictions until the summer and buy-to-let mortgage payment holidays for buy-to-let landlords whose tenants are in financial difficulty (note the tenants have to give proof to their landlord that they are unable to pay with their applications to Universal Credit etc., etc.,). There might be small reductions in average rents, as some Doncaster landlords undertake to help their tenants in these chastened financial times, yet for most people, rents will continue to be paid, making no major impression on rental prices in 2020.

Let’s not forget, the level of average rents is directly related to tenants wages and I can’t see why this relationship between rents and tenants wages should break after Covid-19, so as wages are held back in the latter parts of 2020 the growth rents over the next year will be subdued. Finally, those Doncaster buy-to-let landlords sitting on cash might be able to bag a bargain in the summer from a desperate seller, before normality returns in Q3 and Q4 2020.

Conclusion

We are in unchartered territory, yet for the reasons explained in this article and, assuming there are no other seismic shocks in the coming weeks and months – in a few years’ time – this will be seen as a bump (albeit a rather big bump) – another part of the roller coaster ride of the UK and Doncaster property market.

Doncaster Property News

The Rights, Obligations & Responsibilities of the 3,409 Doncaster Landlords & 8,419 Tenants During the Virus Outbreak

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The last three or four weeks, unquestionably, have been one of the most life-changing times we have seen since WW2. The imminent threat of the Coronavirus has taken over the world, the UK and Doncaster and will challenge you, our families, our relationships and test us all.

The drive of this worldwide action of social distancing is not just to stop you from getting ill with the virus; the bigger drive is to slow down the development of this virus so the NHS will not become overwhelmed with those who are most likely to need hospital care. Yet the issue of social distancing has certainly raised many questions around the landlord/tenant/agent relationship, so in this article I wanted to share with all the 3,409 Doncaster landlords their rights, obligations and responsibilities to their Doncaster tenants. I also wanted to highlight the rights, obligations and responsibilities of the 8,419 Doncaster tenants in return.

These will be trying times for Doncaster landlords and Doncaster tenants alike, so let’s start…

A landlord has the responsibility to ensure the property is fit for habitation, so what if the Doncaster landlord/agent is incapable of undertaking an emergency repair (or say the annual gas safety check) because the tenant is self-isolating or actually has the virus? The answer is the landlord should use their best efforts to fix the problem if it’s an urgent repair, yet if the landlord/agent are unable to do so they should record this fact and that it is related to the Coronavirus epidemic. One should then re-try as soon as is possible and appropriate, having full respect for information on self-isolation, personal-safety and social-distancing and ensure that you make a written note for future issue. My advice is that you or your agent (as we are with our Doncaster tenants) need to uphold good lines of communication with the tenants touched by these current circumstances, so they are clear on what action you are taking and the timescales for this.

Yet at the same time, there will be very few situations in the coming weeks when the contractors who the landlord/agent use will also be in self-isolation, meaning a handful of the 8,419 Doncaster tenants might have to wait for repairs to be sorted. We have some excellent Doncaster contractors with their own backup plans and so together we will use our best endeavours to find an alternative contractor to fix any issues. If your agent has issues, then maybe we can help – do call me. Yet whatever you do, if this occurs, document everything and that it is related to the Coronavirus epidemic.

The total rent paid by Doncaster tenants

each month is £4,041,100

It’s true the UK government has demanded that building societies and banks give a three-month mortgage holiday to those landlords that are unable to make mortgage payments. This is not free cash, the mortgage payments are basically postponed with interest to be collected at the end of this crisis, meaning your obligation as a Doncaster tenant to pay the rent still exists. HM Government is offering employers an 80% wage support with the furloughing to avoid having to make people redundant and the rent for your Doncaster rental home will be treated in the same way as the landlord’s mortgage.

The average Doncaster rental payment currently

stands at £480 per month

Therefore, if you are incapable of being able to pay your rent, it will still build up and accumulate during this virus predicament and you will need to start a payment plan to pay it back on top of your normal monthly rent.  So if your rent is £480pm and you have already been living there for 2 months into a 12 month tenancy, there is still £4,800 to be paid over the next 10 months, so should you not pay anything for 3 months your rent would increase by 43% a month for the last seven months or you face eviction due to arrears (remember arrears have been put on hold – not removed during the virus outbreak). One option, subject to status and agreement by all parties, could be to renegotiate a new longer lease to pay off the arrears over a longer period. Again, the point here is communication from all sides – making sure there are no nasty surprises.

So, if you are in this predicament, there is a lot of help accessible from the HM Government including Universal Credit or Employment Support as soon as possible to escape any interruptions to your payments. Remember, your Doncaster landlord will need proof of your Universal Credit or Employment Support claims to give to their mortgage company to be able to start the mortgage holiday, so my advice to all the 8,419 Doncaster tenants is keep in contact with your agent to ensure your Doncaster landlord doesn’t suffer any avoidable hardship (which ultimately may end up with your home being repossessed because the mortgage payments were missed because you were unable to furnish the landlord with your own claim documents).

Communication is the #1 priority here. Whilst most agent’s premises are closed including our own, all are open for telephone and email enquiries, with staff working from home. This is a fast-changing time for everybody, for the 3,409 Doncaster landlords and 8,419 Doncaster tenants correspondingly and we will be ever vigilant to oversee the financial and monetary backdrop in the coming months.

These are going to be tough times for the people of Doncaster (and the world), financially and mentally; yet together we will come out of this stronger. By working together, working in partnership, again keeping lines of communication open with regards to your finances and your housing, by keeping safe and protecting our families and most of all by being kind to each other … we will get through this, a little battered and bruised – yet hopefully better human beings for it?