The Residential Expert - August 2022

The Residential Expert - August 2022

What a hot summer it has been. Forget the word heatwave; it was like living in a microwave two weeks ago. Who needs to holiday in Portugal when we’ve got the English Riviera and the Costa del Clacton on our doorstep? There are a number of hot topics in the property news to discuss, too. So here’s the August edition of our Residential Expert with Just Move In ambassador Mark Hayward. 

JMI: The climate is obviously changing and we’re going to experience a lot more heatwaves. How is this going to impact the property sector?

Mark: The recent temperatures have exacerbated an existing problem, especially when it comes to new builds. Modern homes are very thermally efficient but they’re built to keep houses warm rather than cool. The windows in some flats don’t even open. Therefore, the government desperately needs to look at how new homes are designed and constructed.

As for our existing housing stock, air conditioning isn’t the long-term answer because it’s not energy-efficient or eco-friendly. So we’ll need to look at things like reversible heat pumps (although they’re expensive) and the thermal dynamics of properties. The sector is used to looking north for solutions, to see how Scandinavian homes keep warm, but now we should start looking south to see how hot countries stay cool. 

JMI: Planning regulations will obviously need to evolve in the future but what can residents do to keep cool now? 

Mark: They keep shutters closed all day in southern Europe, don’t open windows until evening, and try to keep interiors dark and shady. But other than that, there’s not much we can do. Fans help but they simply recirculate warm air. Air conditioning isn’t particularly effective in our older draughty houses either, although older houses tend to keep naturally cooler than modern ones. 

JMI: This is obviously a serious problem as heatwaves pose a threat to life. But the heat can also cause structural problems…

Mark: That’s right. You can get subsidence, especially if nearby trees and bushes are drawing moisture from the earth. We’ll probably see insurance premiums go up as a result. It will be interesting to see what the new prime minister does in September. Neither of the two candidates has announced anything particularly original so far though.

JMI: A hypothetical idea we discussed on the blog last month was the introduction of auction-style sales packs for all properties. Would you support this? 

Mark: Definitely. If you buy at auction, all the essential information you need is already available, even if you haven’t even seen the property in person. The legal pack and everything is pre-prepared in a standardised form. Yes, this preparation takes time, and this is one of the arguments against it, but it would speed up sales significantly once an offer has been accepted. 

Obviously we’ve had attempts to do similar things in the past - Home Information Packs (HIPs) being the prime example - but they didn’t do enough. If we had something where a home inspector goes out, takes down crucial details, and compiles a condition report (similar to what they do in Scotland), then it would really help the sector. 

These packs should be mandatory by the way. And they shouldn’t be watered down like HIPs where the condition report, for example, was taken out. Sellers might not like it but most sellers are buyers, too. 

JMI: With the cost of living crisis showing no sign of abating, and energy bills set to rise again, is it time for rent caps? 

Mark: Ah, this old chestnut. Well, we know that the Mayor of London is in favour. European countries like Germany have caps as well. The problem, of course, is that it can inhibit investment in housing unless you can cap the rate at a fixed level for a long time.

My fear is that rent caps would have unintended consequences. For example, landlords might decide to sell up. And that will mean less available housing stock at a time when we desperately need more. Consequently, I’d be more in favour of introducing ‘affordable increases’ over fixed terms rather than an all-out cap. 

JMI: Rent caps would be difficult to implement too, no? 

Mark: Agreed. It’s also a problem that landlords are, in effect, unregulated and unidentifiable, so you’d have to register them all before any rent cap could be implemented effectively. There’s also a risk of landlords feeling under siege again. Many need to improve their EPCs, amongst other challenges, so capping rents at this time doesn’t seem to add up financially. Capital growth would be the only incentive to become a landlord. And even that’s not guaranteed.

However, it’s a difficult area because many tenants desperately need help, too - especially with bills going up. Some are paying as much as 50% of their income in rent. 

JMI: It seems that everyone has it tough at the moment. Do you think the recent political changes might derail the Renters Reform Bill?

Mark: It would be a real shame if this happens. We’ll have to see what impact the departure of Michael Gove, who’d really pushed for this, has overall. At least Eddie Hughes, the Housing Minister who’s very involved in the rental sector, is still in situ. And I’m told that officials are still working towards it at the same pace behind the scenes. 

Consequently, at the moment, it’s still very much proceeding. But we know from experience that bills can proceed for a long time without actually coming into legal enforcement. Fortunately, however, at least those who work in the sector are used to all the constant changes at Westminster. 

JMI: With all these changes, do you think there’s too much short-term thinking about? I’ve heard you talk about ‘property soup’ in the past. Can you explain this concept?

Mark: When I talk about ‘property soup’, I’m referring to all the ingredients that will impact the market moving forward. And this includes broader things like mortality rates, birth rates and life expectancy. For example, the number of households is going to increase by 1.6 million by the end of the decade so we need to take this into account when determining how many new homes should be built.

I do fear that there’s too much short-termism around. We think six months ahead, or two years ahead, but in reality we need to think ten, twenty, or even thirty years ahead. What’s going to happen, for example, toof older people currently living in rented accommodation when they retire? They won’t have the capital they need. 

JMI: So ‘property soup’ is about thinking broadly and thinking long-term? 

Mark: That’s right. It’s about throwing everything in when we’re determining how to provide enough accessible and affordable housing for all. It’s not just about mortgage rates, or how many new builds are planned; we need to consider the full picture. 

Do we need, perhaps, to look at other countries and try to encourage more multi-generational living to solve the housing crisis? Or maybe modular housing might help? If we look at everything, and consider all options, then we stand a much better chance of making the soup palatable for all. 

JMI: That sounds like a sensible recipe to us. Thanks again for your time, Mark. Enjoy your summer. See you in September. 

You can watch the full conversation on YouTube here:

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