The ‘grey pound’: why older tenants should be a target

Landlords, who is your target tenant? While traditional focus has always been on Generation Z, Millennials and young families, there is growing evidence that those over the age of 55 are increasingly turning to rented property in their later years.

In 2020, AgeUK reported that 750,000 people over 60 live in private rented housing in England, with the number of households inhabited by older renters doubling in the last 15 years.

That figure isn’t static either – an aspect landlords shouldn’t ignore. A report published in the same year revealed that renters of retirement age and those in the upper-middle age category are the fastest growing tenant groups.

Privately rented properties where the tenants were aged between 55 and 64 years old had risen 118% between 2010 and 2020, while rented properties where the tenants were aged over 65 had grown by 93% over the same period.

While you may assume older tenants have been forced into renting due to unfavourable circumstances, the New Generation Rent article published by Property Reporter suggests that comfortable baby boomers are actively choosing tenant status, earning their spending power the nickname of ‘the grey pound’.

With both the Halifax and the Nationwide’s November house price indexes showing that average property values are at record highs, many over 55s are selling now to free capital to fund their retirement, and are choosing to move into rented accommodation in order to watch what the market does next.

Among this age group is hope that house prices will decline, making their next purchase cheaper, while other older renters like the advantage renting gives them in being chain-free when it comes to buying again.

The article also suggests that many mature tenants will stick with private renting for the rest of their lives, whether it’s for the flexibility, the lower maintenance aspect or as part of  an estate planning exercise.

Older tenants often prove to be very reliable tenants, so landlords should go the extra mile to appeal to this group. Over 55s are likely to be asset rich and less likely to default on rental payments, for low or zero arrears. In addition, they’re unlikely to be involved in anti-social behaviour, can deal with running repairs and basic maintenance without troubling the landlord, and will want tenure security for consistent occupancy.

If you’d like to chase the ‘grey pound’ and appeal to more mature tenants, there are a number of considerations that may improve your chances of success:-

  • Opt for access-friendly flats and houses: consider ground floor apartments, those on upper floors that are serviced by a lift and houses without steps to the front door
  •  Choose locations carefully: town centre living where everything is within walking distance is ideal, as is a property close to a bus stop
  • Offer long-term tenancies: foster a sense of security with tenancy agreements of at least 12 months
  • Buy new build: brand new properties will present lower running and maintenance costs for both landlord and tenant
  • Consider added extra: on-site facilities, such as a concierge, video entry or gym
  • Think reduced responsibility: developments where communal gardens are tended to and maintenance is taken care of will rent out quickly

Talk to us today about letting a property you own or purchasing a buy-to-let.

Winter warmers: staying safe and snug this winter

As the temperature drops, we have a tried and tested routine: dig out hats and scarves, revert to warming soups and casseroles, and start speculating about snow days, but what about our homes?

Preparing our properties for inclement weather is more important than ever this year, with many of us mindful about the amount of gas we are using and how low the temperature may drop, thanks to climate change. Now is a good time for a reminder of the basics that may save your boiler breaking down or a pipe bursting.

The age-old debate still rumbles on – keep your heating on a low setting all the time or only turn it on intermittently? Current thinking revolves around insulation. If your home is well insulated, leaving your heating on is a good option as it may not kick in very often. For those in older, poorly insulated properties, using a timer so the heating only comes on when it’s needed is a more cost-effective approach.

There’s no harm in trying both methods if you have a smart energy meter, as you can compare costs. You can reduce energy consumption further by using radiator or underfloor heating thermostats to only heat the rooms you occupy, as well as by avoiding plug-in heaters (the Energy Saving Trust says using an electric heater is more than twice as expensive as using central heating), ensuring you have good insulation and keeping draughts out.

Pipework and central heating go hand-in-hand, and the real danger is when temperatures drop below freezing. If your property is left vacant – whether it’s overnight, for a week or for an extended period – leaving the central heating on and set to a minimum of 13 degrees will ensure any standing water in the pipes doesn’t freeze. Frozen water expands and creates pressure, which can rupture a pipe. Any crack or hole will start leaking water as soon as the temperature rises, which will result in a sudden flood or a slow drip – both highly damaging.

You can also protect pipes from freezing by lagging – the process of wrapping them in insulation material, such as foam sleeves. Pay particular attention to pipes in lofts, garages, basements and those that sit against external walls. It’s also sensible to insulate any outside tap and an older-style hot water cylinder.

If a property is going to be uninhabited for a long spell over winter, it’s wise to play it safe and turn off the water supply at the mains stopcock. Don’t forget, most modern central heating systems still work even if the water supply is turned off.

There is another pipe that’s often overlooked and when it freezes, it’s one of the most common reasons gas engineers are called out. The condensate pipe is what removes steam and condensation from a condensing boiler. If the temperature drops below zero, the condensate pipe can freeze solid and cause the boiler to shut down.

As well as insulating this pipe, you can reduce the chances of it freezing by shortening the amount of pipe that sits outside, making the condensate waste pipe as large as possible with a vertical fall and opting for a boiler with a syphon trap type of water release, rather than a continual drip.

There’s one final leak that property owners should be mindful of during winter and that’s carbon monoxide – a poisonous gas that can emanate from cookers, blocked flues and chimneys. As well as getting your central heating boiler serviced on an annual basis and installing a carbon monoxide detector, it’s wise to get a health check for other gas-fired appliances and book a chimney sweep before the first fire is lit.

If you have any questions about looking after a property during the winter months, feel free to get in contact with our team.

Storage sells: buyers will pay more for space

What sellers assume adds value and what buyers don’t mind paying over the asking price for may not match, if the results of a new survey are to be believed.

While it’s common to think purchasers will stretch their budget for a property with a newly-installed bathroom, an all-singing, all-dancing garden room or perhaps off-street parking, lots of storage is actually one of a home’s most valuable aspects.

When Hammonds Furniture conducted a survey to establish what Brits valued most when buying their next home, 84% said adequate storage space was a must. In fact, those that took part in the survey said they would be willing to pay an average of £12,574 more for a home with lots of storage space to put their possessions.

In some cases, storage was such a priority that buyers would be willing to exceed a property’s asking price for the luxury of space and storage facilities, with 7% of survey participants willing to offer £55,000 more that the advertised price.

The survey results also found the appeal of storage does wane with age. Those below the age of 44 were most likely to increase their offer to secure a new home with good storage, while those over the age of 45 would pay the smallest amount over the asking price to be successful.

Storage is such a broad term that the survey wanted to establish what specific storage options would be most likely to prompt buyers into increasing their offer. A garage was the top storage option, with 42% of buyers willing to pay more for a property with this facility.

A utility room was also well ranked by many purchasers, with 40% saying they’d up their offer if a home had this small but useful room. Another top-performing storage asset was a kitchen with plenty of cupboards and drawers – with 34% saying they’d pay more for this benefit.

While the survey results have highlighted that storage is a winning factor when it comes to encouraging buyers to make attractive offers and even bid over the asking price, good storage can also help sellers during the viewing process.

It’s no secret that people will be put off if your worldly goods are scattered about the house, and a neatly organised home will impress potential buyers and add value too. Even how you utilise what storage you have can impact the interest in and offers on your property – chaotic scenes may suggest there isn’t enough storage for the size of the property.

In most cases it’s not the amount of storage that’s the issue but the way the items are folded, stashed and stowed. When you’re getting your property ready for viewings, it’s worth spot checking your storage beforehand

  • Prioritise small rooms that can feel cluttered: Ideal Home’s storage solutions for small spaces is a brilliant place to start.
  • Reinvent the everyday: if your storage is from the big Swedish warehouse, why not upgrade it with one of House Beautiful’s amazing Ikea hacks?
  • Make sure drawers and doors close fully: first impressions will be improved if the contents are not spilling out.
  • Reorganise chaotic shelves: pay attention to places that potential buyers may investigate, such as the airing cupboard.

If you’d like more advice on getting your property ready to sell on the open market, talk to our team today.

Eco follow-up: Information for Landlords

Unless you’ve been living under a stone for the last month, you’ll know green issues are the number one topic of conversation. While world leaders have debated coal mining and deforestation, there are a number of take-aways from recent weeks for landlords and tenants.

Boilers: in the biggest shake up of how we heat domestic homes in living memory, the Government’s Heat & Building Strategy sets out the end of gas boiler installation. Property investors who develop their own portfolio will be the first to be affected, as the fitting of conventional gas boilers in new properties is to be prohibited from 2025.

All landlords need to take note of the second deadline. From 2035, the sale of conventional gas boilers will be banned, meaning that if a gas boiler breaks or is condemned in a buy-to-let property from 2035, it cannot be replaced with another gas boiler. Existing gas boilers that work, however, won’t have to be removed.

There is financial assistance available to landlords who would like to make a move away from gas fired central heating sooner than the 2035 deadline. The Clean Heat Grant is launching in April 2022 and landlords can apply for up to £5,000 of financial help to install a heat pump system – the Government’s preferred method of heating rental properties moving forwards.

The £450 million fund will cover around 90,000 heat pump installations (which currently cost an average of £10,000) but it will be offered on a ‘first come, first served’ basis. We advise those hoping to take advantage of the grant to apply as soon as the initiative is open for applications.

Funding: a fund worth £4.3 million is going to be shared by local councils in a bid to raise energy standards in the private rental sector.  Some 100,000 extra engagements with landlords will encourage them to comply with current eco regulations and make energy saving improvements – not only to save the environment but also to lower the fuel bills of tenants amid growing fears of fuel poverty. Part of the initiative is to offer landlords free property surveys that will identify where alterations can be made.

Green mortgages: eco-based lending is gaining traction and landlords with the highest EPC ratings now have access to the most favourable interest rate repayments and priority products. It is already reported that the number of ‘green’ buy-to-let mortgages has quadrupled in the past six months, with landlords encouraged to trade energy-saving improvements for advantageous lending conditions.

MEES may get stricter: MEES (Minimum Energy Efficiency Standards) for private rented properties may get tougher in the near future. Landlords need to watch the deadline of 2028, when the Government has proposed that all new, renewing and extending tenancies will need to have an EPC rating of C as a minimum. There’s also an ambitious plan for the eco bar to be raised even further, with the Government’s energy white paper aiming to outlaw new, renewing and extending tenancies that fall below a B from 2030.

If you would like to discuss energy efficiency in a rental property, please don’t hesitate to get in touch.

Gas boiler ban: 6-step action plan for Landlords

The flame on conventional gas boilers is set to be snuffed out after the Prime Minister fleshed out his Net Zero agenda ahead of the COP26 climate change conference. His address reiterated two deadlines that the rental sector needs to keep an eye on.

In 2025, house builders and property developers will be banned from installing conventional gas boilers in the new properties they build. In 2035, the sale of conventional gas boilers will also be banned.

The new rulings will prompt more landlords to explore alternative heating options in their buy-to-let properties. Although existing gas boilers can stay in rented houses and flats, a like-for-like gas boiler will not be a viable replacement should the model be condemned or fail beyond repair.

While 2035 may feel too far in the future for it to be an immediate concern, landlords may need to make heating changes sooner than this, as the Government is on course to further improve energy efficiency in rented properties. By 2028, the Prime Minister wants all new, renewing and extending lets where the EPC is below a C to be made illegal, with this standard rising to a B rating from 2030.

Currently all let properties need an EPC rating of at least an E to be legally compliant, so a steep jump in minimum energy efficiency standards may be ahead. Improving the energy efficiency of a buy-to-let with greener heating systems will go a long way to achieving a higher EPC rating, so what should landlords do next? Here’s our recommended plan of action:-

  1. Check your buy-to-let’s current EPC rating: if your rating is an E, you’re in the danger zone and risk slipping into unlawful territory. An EPC is valid for 10 years so if yours is close to expiring, be aware that your let may be reclassified when a new EPC is issued.
  2. Get a boiler health check: a landlord’s gas safety responsibility involves an annual gas safety check and required maintenance, so why not book a boiler health check at the same time? You’ll find out the predicted lifespan of your boiler, and where you stand in terms of parts and performance.
  3. Think about heating alternatives: the Government would like gas boilers replaced with air, ground or water heat pumps. They are currently more expensive to purchase and fit than most gas boilers – around £10,000 – but this cost is set to reduce as more people switch. Other options open to landlords include all-electric heating – such as storage heaters and hardwired underfloor heating.
  4. Apply for a heat pump grant: to help finance a quick switch to heat pump systems, the Government is making £450 million available to property owners – including landlords. The Clean Heat Grant launches in April 2022 and successful applicants will receive up to £5,000 to put towards the cost of a heat pump installation. There are limited funds available, however, so those considering the switch should apply as soon as the grant launches.
  5. Keep your current boiler serviced: there is no indication that existing gas boilers in good working condition need to be removed now or in the future. If your EPC is already above an E and you’d like to avoid installing a heat pump system for now, look after the existing  gas boiler in your buy-to-let with annual servicing.
  6. Replace any old gas boilers soon: there’s a window of opportunity to replace ageing gas boiler models before the ban on public sales comes into effect in 2035. New gas boilers offer greater energy efficiency, will reduce the fuel bills of tenants and, if serviced, may keep heating your let beyond 2035.

If you’d like to discuss your buy-to-let’s current EPC rating or are considering energy saving improvements, get in touch with our team.

Extinguishing the gas boiler flame: home heating latest

While most of the country was glued to October’s Budget, hoping for news of a cheaper pint or a public sector pay rise (yes to both), there was very little in Rishi Sunak’s address that directly affected property buyers and sellers.

Although there were notes for the housebuilding sector and welcomed funds for those caught up in the cladding scandal, it was actually an announcement the previous week that will have the biggest impact on everyday property owners and future home movers.

Prime Minister Boris Johnson unveiled more details of his Net Zero green agenda in October, with a focus on the future of domestic heating. Responding to the statistic that residential property is currently responsible for 16% of the UK’s total carbon emissions, gas boilers will eventually be replaced with greener ways of heating our homes.

The news is important for purchasers and sellers of property as the age of a boiler installed in a property and the fuel it runs on will become a big part of the decision-making process in the future – and it may even affect a buyer’s ability to get a mortgage. So, what are the top take-aways from the Prime Minister’s latest eco address?

The good news is there are no imminent changes and it’s fine to keep heating your home with a gas boiler. The key dates are 2025 and 2035, depending on who you are. The first adjustment applies to house builders and developers, who will be banned from fitting conventional gas boilers in new properties they construct from 2025.

The second change won’t happen until 2035, when the sale of gas boilers will be prohibited. What does this actually mean? If your current gas boiler is condemned, is beyond repair or needs upgrading due to inefficiency, you won’t be able to replace it with another gas boiler after 2035.

There is no suggestion that perfectly fine, working gas boilers fitted to UK homes will need ripping out in 2035. If it’s annually serviced and safe, homeowners can continue with their current gas boiler until it irretrievably breaks down or is deemed unsafe to use.

Many homeowners are beginning to question what the alternatives to gas boilers are. The Government is hoping we’ll all convert to heat pumps – either water, ground or air types. And the cost? Currently the average supply and installation of an air heat pump will set you back approximately £10,000.

Encouragement to make the switch to heat pumps sooner rather than later is coming in the form of a boiler upgrade scheme. Some £450 million is being made available, with households able to apply for a grant worth up to £5,000 to help fund a new heating system. The scheme, to be called the Clean Heat Grant, will launch in April 2022, and the current plan is for energy regulator Ofgem to become the scheme’s administrator.

Experts have, however, sounded a note of caution. Calculations show the £450 million fund will only cover around 90,000 heat pump installations and those interested will be processed on a ‘first come, first served’ basis.

So are there alternatives to heat pumps? There is nothing stopping homeowners looking after their current gas boiler until it reaches the natural end of its lifecycle, which could take them beyond the 2035 deadline. An ambitious and not totally reliable alternative would be to bank on hydrogen technology being made widely available in the future. It is hoped ‘dual fuel’ boilers that start by running on gas but can switch to hydrogen power will advance to such a state that they can be installed in domestic settings, but the jury is out on whether this will be possible.

There is also the option to go all-electric with storage heaters, electric radiators and hard-wired underfloor heating, with additional options including wood-burning stoves, solar panels and oil-powered central heating. The future of oil-fired boilers is unclear at this stage, although we do know they will also be banned from new builds from 2025.

A word of warning when considering future sources of domestic heating. Boris Johnson has also underlined his intention to make it harder to mortgage homes with the worst energy ratings in the future.

Banks and building societies will be encouraged to offer the best mortgage deals to the properties with the highest EPC ratings, and the danger is that properties with poor eco standards will face higher-than-average arrangement fees and interest charges – or they may even become unmortgage-able.

The Government is also considering introducing a date for all homes to meet minimum energy standards, ahead of its 2050 net zero target. What exactly does that mean? The Prime Minister wants all owner-occupier homes to be of a certain ‘green’ standard, achieved through eco-improvements and energy assessments. Heating your home in the most energy efficient way will help homeowners reach any new targets and it’s quite possible, but not confirmed, that homes with a poor EPC may become more challenging to sell in the future, forcing the owner to make eco alterations.

If you would like to chat about your current central heating or EPC rating, get in touch today.