In Conversation With… John Grimes

John Grimes, Managing Director, Drummond House Developments Ltd

John Grimes, Managing Director, Drummond House Developments Ltd

We are regularly in conversation with a plethora of leading figures in the property, investment, finance and charity sectors, many of whom are guest authors for PRSupdate. The purpose of this feature is to get them to discuss the topics and issues that are currently affecting the Private Rented Sector.

If you would like to take part in an In Conversation piece then please do get in touch with us.

Today we are in conversation with John Grimes, Managing Director at Drummond House Developments Ltd.

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Changes to Capital Gains Tax target non-resident sellers

Peter Sarney, Director, Felton Pumphrey

Peter Sarney, Director, Felton Pumphrey

The imposition of Capital Gains Tax (CGT) on the disposal of UK residential property for non-residents came as a surprise to many people as the UK government seeks to level the playing field between those who are tax residents in the UK and those who are not.

Unlike many other countries, that tax gains on the disposal of residential property situated in their jurisdiction, the UK has not generally charged CGT on gains made by non-residents. The result of this is that a gain would either be fully taxable in the country of residence or escape taxation entirely.

The UK government considers this to be unfair and has proposed legislation to tax the gains on residential property of those who are non-resident in the same way as gains made by those who are resident.

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Number of amateur landlords on the increase

Rajiv Mehta, Asset Manager – Investment, Young Group

Rajiv Mehta, Asset Manager – Investment, Young Group

According to a new report the level of amateur (part time) landlords, those who use their investment property to supplement their other income, have reached the highest ever levels.

The National Landlords Association (NLA) claims that amateur landlords now make up more than 70% of the Private Rented Sector and that they typically own around four properties.

Due to the current strength of returns seen in the rental market 25% of these amateur landlords are intending to add to their property portfolio with 40% planning to use buy-to-let financing to fund their lettings portfolio.

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8 Simple Rules for providing Amazing Customer Service

Samantha Richardson, Head of Service Delivery & Training, Young London

Samantha Richardson, Head of Service Delivery & Training, Young London

Good customer service should be the lifeblood of any business as getting it right is what will keep people coming back to you time and again.

At Young London we have taken this to heart and customer service is central to everything we do. Feedback from our residents and landlords forms the basis of how we measure our success and reward the team.

But how do you go about providing amazing customer service?

Well it might be surprising to hear but providing good customer service isn’t as difficult as many would think! At Young London we have our 8 simple rules for providing ‘Amazing Customer Service’:

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Spring/Summer 2014: Private Rented Sector Operations – Why Function When You Can Really Fly?

Neil Young

Neil Young, CEO Young Group & Young London

With its focus on operational aspects of the Private Rented Sector (PRS), the latest edition of our Biannual PRSupdate publication has gathered together a selection of articles that gives a flavour of the elements required in managing PRS assets on a day-to-day basis.

Undoubtedly clearly defined processes, supported by robust procedures are at the heart of successful PRS operations, as Kris Wadia explains. Kris was, until recently, a Managing Director with Accenture, a global consulting organisation.

He is now CEO of Humanized Leadership, which advises businesses on profit improvement. However, it is how those processes are brought to life within the business and delivered (both internally and externally), and the tools that are employed that have the potential to differentiate between a business that functions and a business that flies.

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Spring/Summer 2014: Processing The Profits

Kris Wadia

Kris Wadia

Businesses operating in the Private Rented Sector (PRS) can increase profitability through Process Improvements.

Let’s begin by understanding the state of the UK PRS in early 2014, using the limited, and sometimes conflicting, datasets available. The UK PRS demonstrates all the characteristics of an immature market in that:

  • 89% of landlords are private individuals and are responsible for 71% of all dwellings in the PRS (DCLG Private Landlord Survey 2010)
  • 78% of all landlords only own a single dwelling for rent (DCLG Private Landlords Survey 2010)
  • Only 8% of landlords stated they were full time landlords (DCLG Private Landlords Survey 2010)
  • There has been an increase, from 2,445,000 households in 2005 to 3,483,000 households in 2011-2012, within the PRS (DCLG Committee – First Report The Private Rented Sector).

The result? A cottage industry of individuals supplementing their income, or funding their retirement, through an investment vehicle that they manage on a part-time and ‘best efforts’ basis. This dysfunctional approach invites near daily newspaper headlines about rogue landlords, unsuitable tenants, dilapidated premises and increasingly stringent conditions on buy-to-let lending.

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Spring/Summer 2014: A Window On The World For The Private Rented Sector

Young Group Foreword

Having great homes, a superb service offering and the most efficient operation is all well and good, but if potential renters aren’t aware of your properties then they will stand empty and generate no income.

It may come as no surprise that around 90% of new home searches start online, so it’s vital that Private Rented Sector (PRS) operators capture the attention and imagination of surfing searchers.

Over the years many property portals have come and gone, and new entrants, such as Agents Mutual and NeedAProperty, continue to launch. However, Rightmove remains the market leader and is now the seventh most visited site in the UK, placing it firmly alongside sites such as Amazon, BBC and eBay.

I’m not suggesting that property portals are a marketing panacea but, as a direct channel to reach those who are actively looking for a new home, Rightmove can’t be beaten. So, here, Miles Shipside, Rightmove’s Commercial Director, provides advice on how the PRS can get the most out of this virtual shop window.

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Bank of England announce new mortgage affordability test

Mark Carney, Governor of the Bank of England

Mark Carney, Governor of the Bank of England

Mark Carney, Governor  of the Bank of England (BoE), has proposed a new mortgage affordability test to curb the proportion of home loans that can be lent  at more than 4.5 times their income. The measures are being touted as an attempt to prevent dangerous levels of household debt.

A consultation paper has been published today and will be open for comments until 31 August 2014 with the final rules will come into effect on 1 October 2014.

The key recommendations are:

  • Ensuring lenders check mortgage applicants can cope with a 3% rise in interest rates
  • Insuring against risky lending by putting a 15% cap on the number of mortgages that banks and building societies can give to people who want to borrow more than 4.5 times their income
  • A separate Treasury pledge that bans anyone applying for a loan through the Help to Buy scheme borrowing any more than 4.5 times their income

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Involving the Private Rented Sector in the development of official statistics

Gary Trent, PRS Stakeholder Lead, Valuation Office Agency

Gary Trent, PRS Stakeholder Lead, Valuation Office Agency

Wikipedia describes statistics as ‘the study of the collection, organization, analysis, interpretation and presentation of data’. Having worked closely with the Valuation Office Agency (VOA) statisticians for the past few years, I can appreciate the importance of each of these elements, no more so than in developing official statistics.

However, from my experience, there are two really important things missing from Wikipedia’s description; understanding what your audience want from your statistics, and then involving them in the ongoing development process.

As we aim for National Statistics accreditation they are the two aspects the VOA is now focussing on, starting with our Private Rental Market (PRM) official statistics.

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In Conversation With… John Coles

John Coles, Director, Evenbrook

John Coles, Director, Evenbrook

We are regularly in conversation with a plethora of leading figures in the property, investment, finance and charity sectors, many of whom are guest authors for PRSupdate. The purpose of this feature is to get them to discuss the topics and issues that are currently affecting the Private Rented Sector.

If you would like to take part in an In Conversation piece then please do get in touch with us.

Today we are in conversation with John Coles, Director at Evenbrook.

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Spring/Summer 2014: Sometimes It’s Not What You Know…

David Mackenzie, Director of Asset Management, Young Group

David Mackenzie, Director of Asset Management, Young Group

Currently, articles abound, enthusing about how companies, family offices and individuals are getting into the business of investing in the Private Rented Sector (PRS) in the UK.

Whilst there is usually a lot of excitement around the physical product and getting it to completion, it can sometimes seem that the huge piece of work and pre-thought that needs to happen in setting up the ‘operator’ side of the investment, in a nutshell the Asset Management of the PRS portfolio, is forgotten.

This encompasses everything from algorithmic based pricing, to marketing, release phasing and mix, through to lettings, property management and back office technical support.

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Time to cool off

Compliance Corner

Compliance Corner

As of today, The Consumer Contract (Information, Cancellation and Additional Charges) Regulations 2013  has extended the contract ‘cooling off’ period from 7 days to 14 days. The regulation will only apply to contracts entered into on or after today (13/06/2014).

The introduction of this new regulation means that the following have been superseded and thus do not apply from today:

  • The Consumer Protection (Distance Selling) Regulation 2000
  • The Cancellation of Contracts made in a Consumer’s Home or Place of Work etc Regulations 2008

Most importantly, for the Private Rented Sector, the regulation now states that the ‘cooling off’ period no longer applies to Tenancy Agreements or guarantor contracts.

The extended cooling off period is still relevant for Terms of Business for both sales and lettings, unless the contract is signed at the businesses office.

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Government releases “How to Rent” guide

How to Rent: The Checklist for Renting in England

How to Rent: The Checklist for Renting in England

The Government has released its guide, How to Rent: The checklist for renting in England, in a drive to educate the public about renting best practices.

The guide, in an attempt to inform and educate tenants and landlords, has all the important ‘need to know’ rental information in one place.

The Government hopes that, by making the public more aware of their rights, they can help the industry as it strives to stamp out bad practices.

Kris Hopkins, the Housing Minister,  said that “encouraging a new generation of well-informed tenants with easy access to useful and understandable information would help root out the small minority of rogues and raise the game of any landlords who don’t know what is expected of them.”

Young Group believes that educating tenants and landlords is an important step in helping to improve the sector. This guide is a step in the right direction in the fight to help improve the growing Private Rented Sector market.

Young London has produced its own series of information guides to help renters navigate through the process of renting in London. Young London has produced its own series of information guides to help renters navigate through the process of renting. A market of informed renters will demand positive renting experiences which will in turn raise standards and root out bad practice.

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Spring/Summer 2014: Making Customer Feedback Count

Howard Morgan, Managing Director, RealService

Howard Morgan, Managing Director, RealService

When RealService was founded 15 years ago the idea of measuring customer satisfaction within the UK lettings industry was virtually unheard of.

In 2014, customer satisfaction measurement has become a core operational skill for many of the leading owners and managers, looking for competitive advantage, in the Private Rented Sector (PRS).

For years the PRS in the US has been gathering feedback from residents, and measuring customer satisfaction, but this is a practice that has only just started in the UK, where the PRS is still a developing market.

So, what lessons can we learn from the USA and the UK commercial lettings sector? And why bother gathering and measuring customer satisfaction in the first place?

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Spring/Summer 2014: Turn Reputational Risk Into Magic

Michael Oakes, Director of Communications, Young Group

Michael Oakes, Director of Communications, Young Group

Reputational risk has often been quoted as one of the principal barriers to entry when it comes to institutional investment in the Private Rented Sector (PRS), and became an issue of mythical proportions following the publication of the Montague Review.

Happily though, two years on, we’re seeing active heavyweight investment in the industry, which proves that reputational risk should be no more of an issue in the PRS than in any other sector.

After all, every industry has its own risk factors, yet it doesn’t prevent hotels offering rooms for rent by the night, or airlines from taking to the skies or institutions managing pension funds; all potentially risky and brand damaging activities, but none so much so that they’d be considered to be wholly un-investable…

The key to mitigating business risk is twofold: minimising operational risk and maximising brand protection.

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