Regulated tenancies can be an attractive investment prospect with an additional bonus, says Chinneck Shaw Property Manager Joe Rocks.

While some may back away from owning properties where the tenant has the right to remain for life, Joe can see the benefits for landlords who take the long view.

What is a Regulated Tenancy?

So first things first, Regulated Tenancies date back to the Rent Act 1977. This Act applies to all residential tenancies created before 15 January 1989. 

Crucially Regulated Tenancies give the tenant the right and security to remain in their property for life. Tenants usually pay a ‘Fair Rent’ set by a Rent Officer at the Valuation Office Agency. This will usually be lower than a market rent for the equivalent property and can only be increased every two years through application to the Rent Officer by the landlord.

Succession rights mean a Regulated Tenant can pass on a tenancy to a close relative if that person has lived at the property for two years before the death of the original tenant. The new tenant would pay a market rent.

What makes a Regulated Tenancy attractive to investors?

Properties with a regulated tenancy in place can usually be bought for a lower price due to the lifetime security for the tenant and the restriction on rental increases. At the end of a Regulated Tenancy the property can be sold with both vacant possession and the potential to benefit from capital growth accrued since the purchase was made.

There are fewer than 75,000 Regulated Tenancies left in the UK and they are highly sought after. Regulated Tenancies have been seen to trade at more than 90% of vacant value – and in some cases even 100% of vacant value – with a rental yield of 7% gross or more.

Joe explained: “Regulated Tenancies offer peace of mind for the owner as they know their property is being looked after and treated like home by the tenants.

“And from the tenant’s point of view they are able to put down roots and feel they belong.”

Having been involved in property management since 1883 when the firm was formed, Chinneck Shaw is in the remarkable position of managing properties where generations of families have lived in Regulated Tenancies.

“We do manage many regulated tenancies. We currently have tenants in their 90’s that have lived in their properties all their lives, having succeeded to their parents’ tenancies. 

“Over the years we do get close to these elderly tenants and I have even popped in to help them at times as many of them still live independently. Recently an elderly tenant called to report her smoke alarms were beeping, so I changed the batteries for her. On another occasion at an inspection I bled the radiators and re-programmed the boiler to save the landlord having to pay for an engineer to visit.”

“If we go into our basement we can still see our archives of the properties we have been managing all these years. Some date back to when our firm started in 1883 and we all enjoy sharing stories about former tenants as the years go on, so they are never forgotten,” he said.

If recent times have taught us anything, it is that technology allows us to work with people quite literally all over the world at the click of a button.

Managing properties on behalf of owners is no exception and at Chinneck Shaw we have landlords based in some pretty far-flung places.

The furthest is New Zealand, with others based in Canada, Ireland, France, Spain, Malta, Switzerland, United Arab Emirates, Hong Kong and Singapore.

Accounts Manager Shelley Morris-Green, explained: “Obviously the modern world we live in helps with the way we can communicate with them, it doesn’t matter with time zones as we can pick up their emails the next day.”

While technology is key, it comes down to relationships and trust.

“Our overseas landlords are content for us to make emergency decisions, if we ever have to, and trust that we will always do what’s right.

“This means we have happy tenants living in properties for longer and happy landlords who are being very well looked after, despite sometimes being on the other side of the world,” added Shelley.

Lifestyle has become a key consideration for people considering moving to our beautiful island city.

We want to share what is great about the place we love so dearly and we are inviting people making a difference in our city to tell us why they think Portsmouth and Southsea is so special.

Today we speak to the team who have just launched The Beach Club.

“Just look at that view. There’s something exciting happening on the water all the time whether it’s the Aircraft Carrier coming in or the latest cruise ship – there’s always something to see,” said Toby Woodfine.

Speaking from the terrace of their latest venture, The Beach Club, it is clear why Toby Woodfine Ian Clarke and Adam Glyde chose to transform the sadly neglected Mozzarella Joes and turn it into a new beachside destination.

The building itself on Clarence Esplanade has a funky maritime look and feel thanks to Neil Williams, the creative force behind The Bureau of Change. Work by local artists including Kevin Dean, Sadie Tierney and Pete Codling bring the walls to life.

And with a late licence until 2am, the aim is to create a relaxed beach vibe.

“We’ve created the sort of place that we would like to go with good wines, cocktails, beer, food and music.” said Toby.

They have a good track record so far with the popular Southsea Beach Cafe near Canoe Lake, Fisherman’s Kitchen and Broadway Coffee Roasters under their belt. 

“No other city has this space so close to the seafront,” said Adam.

“We love our location,” said Ian. “Whether it’s on the water or on Southsea Common there’s so much happening. Victorious Festival, the Great South Run will all be happening on our doorstep.”

Summing up what they think makes Southsea such a great place to live, Toby said: “Southsea is a really cool place – it’s like Brighton was 30 years ago. We’ve got so many artistic and creative people living here.”

“And we do seem to have our own micro-climate – it can be raining just down the motorway but the sun always seems to be shining here,” added Ian.

One of the many joys of living in Portsmouth is our proximity to the Isle of Wight and our rental team is lucky enough to look after a substantial number of properties there.

With a car hire scheme they can book in advance, the team hop on the hovercraft (the only public service like it in the world) and 10 minutes later they are in Ryde – the gateway to the Island.

Technology means they can manage much of the day to day activity without leaving their desk.

Properties can be marketed at the click of a button and thanks to our virtual tours, it is easier for prospective tenants to view virtually before visiting in person.

Existing tenants can pay rent online, report issues and speak to the team knowing there will always be a quick response.

Property Manager Joe Rocks explained: “With the easy links to the Island we can get over there quickly and at relatively short notice.”

We recently did an interview with Benny Read for the Chinneck Shaw newsletter about joining the team as an assistant property manager on the lettings team and visiting the Island to inspect properties has been a highlight so far.

“I’ve been involved in everything from inspections to inventories and I even got to visit the Isle of Wight recently to check out the property we manage over there,” he said.

Summing up Chinneck’s property management work on the Isle of Wight, Joe added: “It is no different to managing the properties we have in Portsmouth and Southsea, the distance is not a problem, we have a good team of contractors over there and we have been managing Island properties for over 20 years.”

Almost a year ago we hit the headlines in the Portsmouth News with an article showing we had enjoyed our best month ever in our 138 year history.

As soon as the first lockdown came to an end in 2020, we saw a sharp rise in interest fuelled by pent-up demand and the Stamp Duty holiday.

At the time, Manager Lizzie Burt commented: “Many people were working from home and now they are looking for new homes with office space and more outdoor space too.

“When the announcement was made about the stamp duty holiday, that was when we really saw a sharp rise in interest leading to the most sales ever being agreed in the history of our firm.”

Twelve months on the records keep coming – even with the end of the Stamp Duty holiday in sight.

“It has been a phenomenal year – the best in our long history – and who would have thought it would be so good,” said Lizzie.

“We’ve just beaten our busiest month on record and we’ve seen a 50% increase in sales for June compared to last year.”

For example this week, we had a house go on the market on Monday. When we held the viewing day on Wednesday, it sold for the asking price to the first person who came through the door.

The unusual times we are living in are still affecting the market, said Lizzie but she can see it remaining buoyant for some time to come.

“The current heat in the housing market is all down to supply and demand. We understand people have felt cautious about putting their house on the market because they are worried there won’t be anything available for them to buy.

“All I can say is, we are finding buyers for every property that we put on the market.”

From today (June 30) European Union, European Economic Area and Swiss citizens will need to use the government’s new ‘View and Prove’ online service to demonstrate their right to rent.

Landlords need to be aware of the changes and anyone who is from an EU country, the EEA or Switzerland and has successfully applied to the EU settlement scheme or for a UK visa will need to prove their right to rent.

Property Manager Joe Rocks, explained: “Tenants affected by the legislation need to login to the View and Prove service and follow the online advice to generate a share code.

“They need to share this along with their date of birth with their letting agent. We can then take this information and input into the government portal to confirm the tenant has the right to rent.”

The government’s guidance notes state that in future everyone will be able to register for a UK Visas and Immigration account (UKVI)  which will allow them to access the View and Prove service.

https://www.gov.uk/view-prove-immigration-status 

Staying up to date with the latest news from Chinneck Shaw and the local rental market is so much easier if you subscribe to our newsletter.

The Letter has undergone a refresh as part of our rebranding and we hope you will agree, it looks pretty smart and is a really great read.

The quarterly publication gets sent out to our landlords and property portfolio holders and Property Manager Joe Rocks explained there is a real mix of stories.

“We include the latest insights on everything from rental yields to rental property demands and show how Portsmouth and Southsea is compared to the rest of the country.

“And we share the latest news from the Chinneck Shaw team,” he said.

Assistant Property Manager Benny Read features in the current edition talking about how he is enjoying the best of both worlds – developing his property management skills, while progressing his career in football.

Benny explained:”I play for Havant in the National League South but during the pandemic we haven’t been playing so it has worked out very well that I have my role as an assistant property manager on the letting team.”

You can see the latest edition here on our website. If you would like to subscribe please contact shelley@chinneckshaw.co.uk and state whether you would prefer a digital copy or we can pop one in the post to you if you give her your address.

News that compulsory mediation before eviction is being introduced by the government for the commercial sector only has raised some eyebrows.

Many thought the measure would be introduced for the residential rental market too – especially as up to one million tenants are likely to be evicted after not paying their rent through the pandemic.

At Chinneck Shaw we are firm believers in the power of talking through any challenges to find a mutually agreeable solution – and our informal mediation has led to many positive outcomes over the years.

Maintaining good communication with tenants means they are quicker to let us know if there could be a problem on the horizon and during the recent lockdowns, this proved to be invaluable.

Property Manager Joe Rocks explained: “Mediation is already used by many judges in an attempt to reduce the amount of cases of evictions in the residential market. 

“We naturally do this throughout the management of the tenancy to try and reduce tenants arrears .If tenants start to fall behind on their payments, we will talk to them to agree a payment plan to pay a set amount every month to reduce the arrears until they are in a position to get back to normal.”

There’s never been a better time to sell your property …

You’ve probably heard that before but the latest figures show there’s no question about the positive nature of the current housing market.

Dataloft, the property market intelligence company, has reported a 26% increase in buyer demand since the beginning of the year and as soon as properties are going on the books, they are being snapped up.

Nationally statistics show 21.7 % of properties are selling within one week from coming to the market.

And we’ve seen 83.3% of the properties we marketed this month, resulting in sales agreed in just six days.

Manager Lizzie Burt, said: “Typically this time of year is always the selling season but the effects of the Stamp Duty holiday and the desire to create work spaces in the home, have led to even greater demand.

“If you are thinking about selling, now really is the time – and we would love to hear from you.”

From today (June 1) the minimum notice period for tenants facing possession notices has reduced from six months to four.

Further changes to so called section 8 notice periods (on the grounds of rent arrears) come into force on August 1 2021.

Property Manager Joe Rocks, said the change comes as the ban on evictions ends and experts are forecasting as many as one million people may now face eviction due to rent arrears.

“Since the pandemic started, no evictions have taken place so there is bound to be a back-log of legal actions.

“We are in the fortunate position that the majority of our tenants were able to continue to pay their rent or come to a satisfactory arrangement.

“As a result of the change, the government has updated the notices online. Any notices issued from today need to use the new notices and landlords need to be very careful as using the incorrect form will result in an eviction case being thrown out of court,” he said.

There are concerns nationally over the impact on tenants facing eviction and growing calls for the government to offer assistance.

Ben Beadle, chief executive of the NRLA, said: “As the private rented sector moves out of lockdown measures, the chancellor has failed to provide tenants with the support they need. This is especially the case for the majority of those in rent arrears who do not qualify for benefit support.

“Without urgent assistance, many tenants face the prospect of losing their home needlessly as landlords struggle to shoulder the cost of arrears. Affected tenants also potentially face the negative impact of damage to their credit scores.

“The government needs to develop a financial package which ensures that benefits cover the rents of those in receipt of them. For those who do not qualify for benefit support, an interest free, government guaranteed tenant hardship loan should be established, similar to those in Wales and Scotland.”