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ARLA Conference 2013 update

Last week Rochelle Latham and myself, both Fellows of ARLA, attended the Annual Conference, held at the Hilton London Metropole Hotel in Edgware Road.  The conference is always a great opportunity to network with many of our industry colleagues, visit the stands to see all the new & exciting products coming onto the market, but mainly to hear about recent trends in the industry and update ourselves on new legislation coming into force.

ARLA President Jane Ingram SavillsThe initial session started with the president Jane Ingram addressing the delegates, around 600 of them, about her findings as she has been travelling around the UK meeting ARLA companies.  With the 61% increase in the Private Rental Sector over the last 10 years and the entrance of the ‘Rogue Landlord’ and more relevantly the ‘Rogue Letting Agent’ it was a surprise for Jane to discover that STILL some of the regulated agencies, who have taken the trouble to become members of the association (which is NOT easy) and to train their staff (which is NOT cheap) are still failing to display the ARLA LICENSED LOGO in their offices, on their literature and on their website!

Become an ARLA agentWhilst Sewell & Gardner are exceptionally proud of our ARLA licensed status and we have the most qualified agents in our area, we still feel that we need to do more to instill the ‘Only use a Regulated Agent’ message to our customers.  I am so amazed that time and again Landlords and Tenants do not realise the difference in using or NOT using a licensed agency:  I bet that the majority of them would not use a non-ABTA travel agent when booking their holiday, and yet in the Lettings world we are talking hundreds of thousands of pounds in jeopardy, not just the cost of a holiday!!

Jane Ingram mentioned that over 70% of applicants start their property search online and yet less than half of the ARLA agencies in the UK do not have the logo on their website and over 40% of them do not know that ARLA protect their client’s money; so we need to desperately try to get this message out to the customers.

The Managing Director of ARLAThe next speaker was Ian Potter, the ARLA Managing Director and a lovely gentleman whom I had recently had lunch with after he had presented me with my Level 4 Certificate!

Ian was giving us an overview of the past year and what was coming in the next…

During 2012 we had 2 sets of changes to EPC regulations; we had the introduction of the Green Deal; the Shelter & Which? reports on unfair consumer fees; the end of the Office of Fair Trading and the subsequent spotlight on Consumer Protection Regulations via the Trading Standards Authority; the Advertising Standards Authority & Committee on Advertising Practice’s ‘ruling’ on transparency of fees (with no definite regulations as yet but a lot of smoke and hot air to be going on with) and finally the increase, finally, in mortgage availability, especially relevant to landlord portfolio expansion as currently the sales market is 20-25% Buy-to-Let investors.

Ian also reported on the results of the ARLA mystery shop, which Jane had touched on during her speech:

98% of ARLA agents identified their company when answering the phone; 72% identified themselves by their name; 84% answered the phone within 3 rings; 84% of the staff who answered the telephone knew they were an ARLA agent but sadly only 64% knew that they had Client Money Protection (which is a certainty for ARLA agents); even worse only 38% knew that they were part of the Property Ombudsman Scheme (again a definite for ARLA agents).

Some green deal information from ARLAGREEN DEAL:  Tenants are the key applicants but they require the permission of the Landlord in order to apply for improvements to their rental property (like insulation or new heating system), the cost of which is paid back via the energy bills for the property.  The process works like this:  An Assessor gives impartial recommendations on what the customer needs; the Provider arranges quotes for the customer, provides the finance for the works and then arranges the installation;  The Installer carries out the works; the Customer enjoys the benefits of the works and pays the provider back over time through savings made in their energy bills.  Landlord are able to make energy efficient improvements without having to pay for them upfront and the Tenants will repay the cost of the measures through their energy bills, whilst enjoying a more energy efficient home.


Other morning session speakers included Campbell Robb, Chief Executive of Shelter; Jack Dromey, Labour Party MP & Laura Sandys, Conservative Party MP.  After the morning session we were treated to a lovely lunch and a chance to visit all of the stalls in the exhibition area, making sure that we entered all of the business card competitions!!

Lucien Cook Head of UK Residential Research SavillsFirst session of the afternoon was from Savills Head of UK Residential Research, Lucian Cook.  Having the worst slot to fill when everyone is feeling a little sleepy after lunch, and having a lot of spreadsheet statistics to portray, it was a huge delight to find that Lucian is, in fact, an incredibly funny man; he had the audience in stitches (thank you Lucian)!

So here are some of the stats for you (without the jokes, sadly):

The Housing Market in the UK is a growing sector currently worth £893 billion and is dominated by younger households:

The PRS (Private Rented Sector) has 52% under 35 years of age, 18% 35-44 years, 18% 45-64years and 11% 65 years+

Growth in PRS households from 2001 to 2011, mainly in urban areas:

Manchester 95% increase to 30% of the Manchester housing stock

Liverpool 79% increase to 25% of the Liverpool housing stock

Reading 67% increase to 27% of the Reading housing stock

Southampton 53% increase to 26% of the Southampton housing stock

And in London:

Newham 96% increase to 35% of the Newham housing stock

Enfield 116% increase to 24% of the Enfield housing stock

Greenwich 96% increase to 21% of the Greenwich housing stock

City of London 43% increase to 41% of the C.o.L. housing stock

Rental Levels for an average 2 bed property as a % of earnings in London are at 53% and 35% in the South East of England.

The prediction is that the PRS will rise by a further 1.1million (23%) over the next 5 years.

The amount of rent paid by private tenants is due to reach £70 billion over the next 5 years.

Tenants are caught in the ‘Rent Trap’, they feel that they are throwing money in the bin by remaining in rental accommodation but with average rents rising year on year, the average deposit on a FTB home is now £27,000 and 3/4 of us save less than £50 a month, so the likelihood of saving enough money for a deposit on a house is slim to none!

We need more investment in the PRS, we need more Landlords on BTL mortgages, we need more builders to build homes…

So where to invest?

London:  BTL Gross Income Yield 5.4%, Net 3.8%, 5 year price growth 21%, total annualised 5 year return 7.7%

South East London:  BTL Income Yield 5.7%, Net 4%, 5 year price growth 19.5%, total annualised 5 year return 7.7%

North East: BTL Income Yield 6.2%, Net 4.3%, 5 year price growth 4.5%, total annualised 5 year return 5.4%

If an investor is looking simply for rental yield then they may find better returns in the North of England, but the capital investment is in London and overall that is the place to invest, although most costly from a purchase point of view.

Before the final session of the afternoon, the prize draws were called and for the first year ever, both myself and Rochelle came away with winners Champagne.  Shame we had to carry it home on the train!Rochelle wins the champagne

The final session was a legal update from the best of the best:

Marveen Smith of Pain Smith Solicitors, David Barling of Dean Wilson LLP and Robert Bolwell of Dutton Gregory LLP.

Luckily this year there were no surprises for us, we seem to be on top of all the current and new legislation, we have just amended our Tenancy Agreement and Terms of Business to cover risk assessment under the Health & Safety Legislation relating to Legionella and Legionnaires Disease and due diligence defense for the Consumer Protection Regulations, which are certainly a hot topic in the industry at the moment.

All in all a great day out, quite exhausting but at least we had our bubbly to enjoy after a brain taxing conference.  Thank you to ARLA for putting on a tremendous conference yet again.  For more information on the speakers click here https://www.arlaconference.co.uk/index.php/2013-presentations.

Rickmansworth Letting Agent Jane Gardner





Jane Gardner, Letting Director