The previous year was a roller coaster for the commercial property sector, with both landlords and tenants facing unique challenges. It looks like 2023 is also going to be a challenging year for landlords – with the higher increased rates and Section 21 changes, for instance – and for tenants as well, who are finding it to keep up with rental demands owing to the inflation and the current cost-of-living crisis.
Most likely the biggest challenge UK landlords are facing at the moment is rising mortgage rates. Since the controversial Liz Truss September budget in 2022, interest rates have skyrocketed, leading to higher mortgage costs for both residential and commercial landlords.
The average 2-year fixed rate for a buy-to-let mortgage in November 2022 was 6.5%, which was just 2.89% in January 2021. Increased interest rates will pose a problem for landlords looking to buy new commercial properties and those refinancing existing ones in their portfolios.
Furthermore, there’s been a decrease in the number of BTL mortgage products currently available, giving fewer financing or re-financing options to landlords.
As per the Autumn statement 2022 announcement, changes to property capital gains tax (CGT) means that landlords will likely pay more in CGT if they wish to sell any of their properties in 2023.
The CGT allowance is £12,300, as of January 2023, meaning that any amount up to this made in a sale will not be taxed. However, in April 2023, this amount will be cut down to £6,000, and then £3,000 in 2024.
At the moment, landlords are allowed to serve a Section 21 notice to their tenants if they wish to evict them from their property, without having to go through court. Landlords also need not give any reason for regaining possession of their property, which is why it was referred to as ‘no-fault evictions’.
However, the Renters Reform Bill will effectively abolish Section 21, which means landlords much use a Section 8 notice instead, which does require landlords to give a reason for regaining possession of their property – such as antisocial behaviour or rent arrears, where possession of the property is not guaranteed, as it was with Section 21.
Section 21 has not been abolished yet although it’s fair to say that it will be sometime this year.
It has been estimated that the total number of rent arrears in 2023 will increase compared to the previous years, owing to the ongoing cost-of-living crisis mainly.
Commercial tenants are most worried about rising rents in 2023. With the nation already batting high inflation and the current cost-of-living crisis, the biggest fear for tenants has been keeping up with rental demands.
The average rent being paid in England, for example, is £1,071 on average, which is an 8.7% rise compared to last year.
Among the high cost of living and uncertain economy, it pays to use a digital tool for property inspections and reports, effectively cutting down the administration for housing associations as well as property & facilities managers by 50% in time.
For more information visit www.theinspectionmanager.co.uk
Data standardisation refers to using consistent methods for collecting data, although this is a very basic and somewhat generic description of what it truly is. If we delve in deeper, data standardisation is the process used for transforming data to fit a constrained and predefined set of values – ultimately, relying on uniformity to improve efficiencies.
Data standardisation refers to using consistent methods for collecting data, although this is a very basic and somewhat generic description of what it truly is. If we delve in deeper, data standardisation is the process used for transforming data to fit a constrained and predefined set of values – ultimately, relying on uniformity to improve efficiencies.
When an economic shock or recession hits, all properties are impacted. However, commercial properties must bear most of the brunt because a lower demand in the building, sale, and letting of commercial properties means that businesses cannot function as effectively and contribute to the economy as they normally would.
There’s no escaping technology and the impact it has had on our lives, making everything from ordering something online to power up our home appliances from several miles away really easy. Technology has also fundamentally changed how landlords and letting agencies, for example, buy, manage, and operate spaces – making lives easier for tech-savvy homeowners and demanding tenants alike.
The public at large believes that housing inspections should be in the hands of local councils – at least, according to this survey. Conducted by the APSE (Association for Public Service Excellence) reported that 59% of the public are in favour of Building Inspections by local councils, while 23.4% support private inspections.
In 2021, UK commercial properties contributed on average, 20% of carbon emissions, according to a report published by the Committee on Climate Change. Furthermore, in larger cities, including London, commercial buildings were responsible for more than 70% of the city’s emissions on a whole.
The UK happens to be the most influential property technology or ‘PropTech’ hub in the world, despite Brexit-related problems and uncertainty. As well as the global pandemic, which hit the UK just as hard as some of the worst-hit countries.
The commercial property sector has an important role to play in the UK economy, not only in terms of a direct and indirect output generator, but also in terms of helping retailers, financial services and other businesses boost production.
Technology can transform facilities management (FM), helping you save on costs and drive efficiencies. For many businesses and organisations, their three main expenses are: Employees, Technology, Facilities. However, in the rush to recruit talent and keep up with new technology, organisations can end up overlooking their facilities.
Facilities managers must adapt to changing recommendations, regulations and legislation. There has been Government consultation for the Future Buildings Standard, on proposed changes to fuel and power conservation and ventilation in building regulations.
