The belief that property market values in London and the UK will continue to rise has led many property investors into troubled waters of late. Since the financial crash of 2008, the market recovery in London has come as somewhat of a surprise, but the rest of the country remains at a low point, with house, flat and apartment prices well below the peak.
The government’s help-to- buy program certainly appears to be leading to improved market conditions and concerns are already being raised warning of the dangers of overheating, particularly in the London area.
However, the rental market in London and the South East has proved resilient in the face of the economic downturn. Among other factors, I see this as a product of foreign investors and real estate investing on a commercial basis as a hedge against falling currency values as a result of quantitative easing.
With the average property price-to-income ratio still dangerously high, particularly in London and the South East, there’s a warning to property investors out there who may think the worst is over. Along with the extension of the UK Government’s Mortgage Guarantee Scheme at the end of the year, all the warning signs are in place.
Apartment management commentators can be Block Management London influenced in their views. Reports from real estate agents and property managers for condos and leasehold rentals will no doubt accompany the boom as long as it lasts.
Tenant utility activity is a good indicator of the cash that property owners have at their disposal, and frankly many are not in good financial shape.
Real estate agents are learning firsthand how many tenants are struggling to make payments. Service fees and landlord arrears are certainly an issue in some locations. Areas of concern for London property management include areas near Croydon and Lewisham, and other inner London boroughs such as Lambeth also appear to have been affected. The credit crunch may be a distant memory for bankers, but others aren’t so lucky and are still struggling to cash flow.
Some simply cannot afford to pay, and many end up leaving it to the courts, where they defend their plight.
In my experience, homeowners or tenants who are under financial pressure are more likely to default on utility bills than on their mortgages. The perception is that the risks of default on utility debt initially appear less onerous.
But all those renters who are currently feeling the financial pressure are vulnerable to economic pressures and remain sensitive to even the smallest interest rate movements. A half-percent rate hike can mean a significant percentage increase in the net monthly mortgage payment.
All of this calls into question the future growth prospects of the UK property market in the short to medium term.
There are other factors to consider such as B. Government incentives in the form of purchase aids, which could also keep prices artificially high in the short term. Demand may well outstrip supply, but when housing is simply unaffordable for most, this is the fundamental long-term move for all to see,
I certainly think some of the more cautious entrepreneurs might reconsider their approach with the benefit of further careful consideration. Who knows what will happen and when, but if one day we are faced with rate hikes, the effect will not be pretty .
Never say never, but recent talk of a market recovery could well be a false dawn for UK property growth.
Having established that statutory tenant rights are vital to the process of block management, they are also an important consideration for all tenants concerned. Some of these rights are now briefly summarized below .
Renters have certain rights to receive certain information from their landlord or real estate agent, including the following:
Name and address of the landlord.
- Incidental charges and the right to contest them
- a statement of costs for the last ancillary cost accounting year
- a summary of the rights and obligations of the renter
- Management Fees for Freeholder or Block Property Management Agents
- Receive notice of assignment of real estate.
- a written summary of ongoing building insurance costs, which must be reasonable
Other tenant rights include various entitlements
- set up a recognized tenant association
- contest their liability for any portion of the Service Fee that they deem unreasonable
- change a rental agreement for certain reasons
- Advice on specific qualifying work and long-term agreements
- initiate a management audit of all management functions
- view the insurance policy and receive information about it
- Appointment of a manager by an LVT when tenants feel the block is poorly managed or the landlord cannot be found
- take over the property management of the apartment building yourself
- Right to Manage or RTM – subject to eligibility criteria
- Tenants may appoint block management agents under the RTM (Right to Manage) regulations
- apply to the district court to acquire the landlord’s interests – only applicable in extreme circumstances where the landlord breaches his obligations
- renew or renew their lease
- Advance refusal to sell an apartment building or property
- Rent security at the end of a long tenancy
As you would expect, the above list is subject to conditions, exclusions, eligibility criteria and exceptions, but we hope this serves as a good reference point for further reading.
The key to dealing with the above legislation properly is to use the services of a good property management agent.
The RICS Service Charge Residential Block Management London Code sets out what is considered best practice for property management agents in the private residential rental sector. It also highlights any legal requirements that block managers must comply with and adequately covers requirements to comply with the above legal rights.
The services of all practicing administrative agents should therefore meet the standards set out in this Code. If not, questions should be raised, and tenants, landlords, RTMs and ownership companies may well be concerned.
Of course, there are always those administrators or owners who simply refuse to take effective action or responsibility for quality standards and are happy to muddle through. Wherever possible, you should avoid these companies.
Employees are often poorly trained, not fully aware of codes of conduct and standards, and are not always sufficiently qualified or experienced to meet customer needs.
In cases where tenants intend to assert their rights and pursue some of their claims, it is important that the property manager is experienced and well informed. If these rights are not properly respected, problems and costly liabilities can quickly arise.