Welcome to the Rentshield Rental Index, October 2019 edition. Here you can find our latest figured on rental amounts, variance levels and rent to income ratios throughout the UK.

Key headlines from the October 2019 Rental Index

  • Rents in the UK rose by 2.7% in October compared to the same month a year ago; the average monthly rent now stands at £953 a month
  • Rents in London increased by 2.8% in October this year compared to October 2018; the average monthly rent in the capital now stands at £1,665 a month
  • When London is excluded, the average UK rental value was £788 in October 2019, this is up 2.6% on last year
  • Rentshield’s October Rental Index reveals that rents rose in all 12 of the UK regions covered in the research

Click here for the full report


The October Rentshield Rental Index

 

Legislation update – Right to Rent and Brexit

 

When Brexit actually happens, if at all, is still up in the air, with the snap December general election (the third in five years) leaving a number of options on the table – from a clean break Brexit to leaving with Boris Johnson’s deal, a second referendum or no Brexit at all.

Despite this ongoing uncertainty, the government has for a long time been asking businesses and individuals – including letting agents and landlords – to prepare for life outside of the EU.

This has included updated guidance for the controversial Right to Rent policy in a post-Brexit world.

Here, we explore what that guidance said as well as analysing the latest goings-on with Brexit and the December poll.

New Right to Rent guidance provided

Back in in May, the UK government outlined new guidance on Right to Rent checks for EU citizens after Britain leaves the union. It stated that until January 1 2021 EU, EEA and Swiss citizens would continue to be able to prove their Right to Rent in England as they do now – by showing a passport or permitted identity documents either on their own or in combination.

When this guidance was issued, the government – then still led by Theresa May – made a cast-iron promise that this situation would remain the same regardless of whether the UK leaves the EU with or without a deal.

In addition, the guidance made clear that letting agents would not be required to check whether tenants who are EU nationals arrived before or after the UK left the EU, or if they have status under the EU Settlement Scheme or European Temporary Leave to Remain (Euro TLR).

Further to this, letting agents would not be required to retrospectively check the status of EU, EEA or Swiss tenants or their family members who entered into a tenancy agreement before January 1 2021. Irish citizens, meanwhile, would continue to have the right to rent in the UK and prove their right to rent as they do now, for example by using their passport.

Industry guidance

In September, ARLA Propertymark, urged its member agents and the industry to make to be up to speed with how Right to Rent is likely to work on November 1, the day after Britain was due to leave the EU until the recent extra extension.

The industry has now been given some more breathing space with the delay to January 31 2020, but there has been no updated guidance since May 2019 – and nothing from the Boris Johnson-led administration – which means that landlords and letting agents could lack clarity over what exactly their responsibilities are if and when Britain leaves the EU.

ARLA provided useful guidance on how to plan for Right to Rent for November 1 and beyond, which could still prove handy for those operating in the lettings sector, but a fresh update from the government would be welcome in the lead-up to the election. Otherwise letting agents and landlords – who some argue have been acting as de facto border police as a result of Right to Rent – will continue to battle confusion and uncertainty.

With the election campaign now in full swing, the Residential Landlords Association (RLA) recently released its six-point manifesto, with point three being: ‘End Right to Rent – ending the Right to Rent scheme would end the discrimination that has emerged as a result of the stringent checks’.

There have been regular calls for the controversial policy to be scrapped ever since it was rolled out across England from February 1 2016, and the new government will continue to face these calls after the election.

 How did we get to another election?

It’s a question weary voters may well be asking themselves as they are dragged to the polls for a fourth major vote since 2015, but Boris Johnson’s failure to get his Brexit deal through Parliament by his ‘do or die’ Halloween deadline meant he was forced to ask the EU for a further extension to January 31 2020.

He also, in an effort gain a majority and break the Brexit impasse, pushed hard for an election – which, at the third time of asking, he was successful in achieving when Labour (satisfied and reassured that no-deal was effectively off the table for a few more months) agreed to the poll on December 12.

Party members, activists and politicians are all now out on the campaign trail as they try to gain votes in the first pre-Christmas election since 1923. It’s set to be the most unpredictable election in recent times as long-held loyalties are tested, with Labour’s Leave-voting northern heartlands threatened by the Conservatives and the Brexit Party, the Tories facing wipeout in Scotland, and the Lib Dems hoping to build on its recent surge in support with ambitious plans to gain more than a hundred seats.

There has been much talk of tactical voting and Leave or Remain alliances, but there is every chance we could be back to where we are now – with a hung parliament and a deeply divided House of Commons reflecting a country that is effectively split in half on the biggest political issue of our times.

For now, the rules surrounding Right to Rent remain the same, but in a fast-changing political arena this could change fast so landlords and agents need to make sure they are sticking to the regulations when granting new tenancies – even if further guidance from those at the top would be very welcome.


Legislation update – Right to Rent and Brexit

 

Merger Of Leading Referencing Firms Announced

Barbon Insurance Group, trading as HomeLet and Rentshield Direct, and Let Alliance have today (6th November) announced a merger, creating a highly skilled and resilient strategic supply partner to professional letting agents.

Operating under the name of Barbon Holdings Limited, the combined businesses will offer the widest portfolio of protection solutions and ancillary services to letting agents and their landlords.

The businesses will continue to trade separately under their respective brands.

Martin Totty remains as group chief executive of Barbon Holdings Limited and Andy Halstead maintains his role as chief executive at Let Alliance. As part of the merger, Halstead will also assume an executive director position on the Barbon Group board, subject to regulatory approval.

The merger comes at a pivotal time within the rental sector, following the introduction of the Tenant Fees Act in June, which has challenged the traditional business model.

The merger means that the well-established Barbon Holdings will be able to re-invest a greater share from cash flows behind innovation, rather than into the running costs of the business or looking elsewhere for capital which has supported other recent startup ventures in the sector.

Martin Totty said: “Bringing the two organisations together will enable an increased investment into technology and product innovation, generating incremental income or lowering operating expenses. It is a prerequisite that we will constantly look for opportunities to develop our proposition and enhance our customers’ businesses.

“Our market is changing and the needs of customers will change as a result, he said. Customers need solutions that protect, help generate income and can be embedded into their own propositions.”

Martin added: “Letting agents and their landlords are looking for peace of mind that strategic supply partners deliver quality and value, are financially resilient, well capitalised and with balance sheet strength to meet future liabilities on products and services they sell today where customers may have use of them much later.

“We also recognise that customers can no longer afford the time or resources required in conducting risk assessments and due diligence on the viability of small firms with limited solutions.

“Combining the robust and longstanding Barbon business with the creativity and breadth of product portfolio of Let Alliance – both with deep experience in regulated financial services – creates a scale provider of lettings protection solutions that has the potential to invest and innovate better than if the brands remained independent.”

Founder and chief executive of Let Alliance Andy Halstead said: “We have built a very special business at Let Alliance. Customers are at the heart of everything we do. Our merger with HomeLet and Rentshield is consistent with our values; it’s all about our customers.

“Letting agents across the UK are working in a tough and challenging market. Letting agents are consolidating and local firms are merging in order to build scale and thrive in the future. Strategic partners and suppliers like us need to understand the needs and challenges that letting agents experience and consider how they provide support and solutions.

“The merger allows us to focus all our combined resources on further developing our proposition for customers. We are ‘fit for the future’ and have the financial strength to deliver exactly what our customers need. The world just got a whole lot better for letting agents: the next phase of our journey together will be exciting and seriously valuable for customers.

“The merger gives us access to resources that we could only dream of as an independent and it gives us the scope to carry on as Let Alliance and remain true to our values and customer commitments.”

Barbon Holdings Limited is majority owned by The Carlyle Group, an international alternative asset investor.

Michael Savage, director of The Carlyle Group said: “We have worked with the Barbon management team for more than four years now. During that period we have got to know the sector well and believe the prospects for the private rented segment are very positive.

“The opportunity here for us to invest further behind two great businesses, both with strong cultures and experience of managing in a regulated environment, where technical skills and a customer orientation are critical for success, was not one we were willing to pass up and are delighted to support the management teams as they take the combined business forward into the next phase.”


Merger of leading referencing firms announced