A Fascinating New Year?
I love everything about the festive season leading up to our family highlight, Christmas Dinner. With twenty guests expected and parents who have spent a lifetime in the restaurant business, no pressure? Around the 23rd my wife and I go into military mode as we plan the hundred and one finer details. Last year we dressed the children as our favourite military heroes so they could get into the spirit of things. The kids loved it but we still get strange looks from some neighbours’ so maybe not this year?
After the meal it is time to reflect upon the year gone and talk about our hopes for the year to come. On a personal level, the year gone consists of “Where did it go?” As for the future, I keep it simple. Good health and a degree of happiness for friends and family. In terms of our business I feel we met the many challenges of 2018 and are in good shape to face those presented in 2019. Just as well since challenges there will be.
The Tenant Fee Ban is expected to come into force in Spring 2019. Met with glee by many tenant associations this legislation will introduce a ban on fees charged by letting agents and landlords to their tenants. Charging for costs like pre-tenancy administration, credit checks and inventory check out reports are just some of the services it will no longer be possible to charge a tenant for.
These services will still need to be provided and paid for so the net result of this legislation is fairly obvious. Increased rents. For the property management sector there is grim news following a survey by property maintenance specialist Fixflo. The survey indicates that half of all letting agents will lose between 10 – 30% of turnover because of the ban. An estimated 48% are considering not trading beyond early next year.
Alarming statistics but nothing to disturb my festive rest. We have been preparing for this for two years. Streamlining systems, introducing an online tenant interface and generally preparing for change. It helps that the vast majority of our business comes from residential property and block management so very little of our turnover will be impacted by the ban.
As if times ahead were not looking interesting enough, Newcastle City Council is currently consulting to expand the licensing scheme for private rental properties in the city. This will cost landlords around £900 per property and there are some 14,000 properties. That is an estimated £12.5 million in Council revenue.
The stated objective is to push up standards and beat anti-social behaviour. This worthy objective fails on two counts. There is not a shred of evidence that current licensed areas have seen a drop in anti-social behaviour. The local burglar is unlikely to desist because he has a functioning smoke alarm. And second, our cash strapped Council does not have the resources to police the scheme. So rogue landlords will continue to ignore the legislation.
And finally, the elephant in the room. Just who is going to pay that extra £900? Take a wild guess? So, if 2018 was living through interesting times, in the property management sector 2019 looks set to be absolutely fascinating.
So, as we head for a fascinating new year, may I take this opportunity to wish you all a happy Christmas and a prosperous new year from everyone at Heaton Property? I shall leave you with my wife’s favourite festive poem from Wendy Cope OBE. “Christmas here again. Let us raise a loving cup; Peace on earth, goodwill to men, and make them do the washing up.”