This week I held a livestream with our lettings manager, Nicola Wilkes, to inform you on how we’ve adapted our lettings service. The video is still available on our Facebook page and also our YouTube channel, but here are the key parts of the interview, which will let you know how we at The Apartment Company have adapted our lettings service during the coronavirus pandemic.
Peter: The question that everyone wants to know at the moment is: how has it been? Have properties been letting? And what are enquiry levels like at the moment?
Nicola: The enquiry levels are actually surprisingly high. People have obviously got time on their hands, but people are still looking at moving, whether their own tenancies are coming to an end, they’ve got new jobs starting, or they’re moving into the area. The level of enquires is certainly higher than I would have anticipated it to be, and people are definitely motivated to move.
Peter: Can you give our viewers an idea of the types of properties that we’ve let, and how we’ve gone about it?
Nicola: What we’ve basically been doing is, obviously we have good photographs, brochures and floorplans on our website and on the portals, but we’ve also had video viewings. Some video viewings we were able to do prior to the lockdown, and we’ve also had video viewings provided to us by tenants and by landlords. We have recently let properties using these video viewings, and answering any questions that arise from those viewings. But I think because the video viewings – certainly the ones you’ve done, Peter – have got commentary, coupled with our photographs and floorplans, they give potential tenants a very good feel for what the property is like. These videos have seen tenants happy to say, “Yes, I’d like to let that property.” We’ve agreed move dates and we’ve started referencing. It’s been obviously a very different way of working, but people have been receiving the video viewings very positively. Some people have been quite honest and said, “Look, it’s not the right property for me,” but we have secured lets using video viewings. During this strange time of working differently, it’s been really successful.
Peter: I agree. It’s been the same on the sales side of the business. We have conducted video viewings and actually, sharing them via WhatsApp seems to be the preferred method of communication, doesn’t it?
Nicola: Yes, it is. Most people have got WhatsApp. We’ve communicated via phone, email, and followed up questions raised from the video viewings. It’s quite strange, because I think some people have been surprised that we are actually still available to talk to, that we’re taking calls, that we’re responding to the enquiries that are coming in. But it has been very, very positive, and obviously our landlords, where they’ve got vacant properties, have been really pleased that we’ve managed to secure tenants and do the sort of work that we are doing at the moment.
Peter: Yes, ‘avoid the void’, as they say.
Nicola: Absolutely, yes, definitely.
Peter: Can you give examples of the types of places that we’ve let?
Nicola: Yes, we had a two-bed in Southgate, and we’ve had a three-bedroom across on Riverside.
Peter: What sort of rents are they going at?
Nicola: The two-bedroom Southgate property achieved £1200, the three-bed on Oliver Court, £1600. We’ve got a one-bedroom that has a couple of interested parties – it’s not a big one-bed, so we’re hoping to achieve somewhere in the very high £700s. We’ve got a couple of offers in on that property too. We’ve interest in a similar property also in Southgate, which has attracted a lot of interest, it’s just finalising getting the video viewings out there.
The rents are holding up, albeit what I would say to landlords is, just be realistic with your expectations. If the market does start to open again now – and it’s early days, the government announced late yesterday evening that they were opening the property market back up – we’re going to be looking at doing viewings, but again, we obviously have to put measures in place to make sure that we’re protecting those who do the viewings.
We have to make sure that everybody still stays safe.
Peter: How is the market? How many apartments are available in the Bath market?
Nicola: I’ve done an analysis. We’ve currently got around 125 one-bedrooms available across the market, and about 50% of those are unfurnished, so the other half are furnished. We’ve got a similar number of two-bedrooms, and again with a similar percentage of furnished and unfurnished, about 50:50.
Peter: That surprises me actually, I always felt that there were more unfurnished properties available. Do you think that might be because some people who have been doing holiday lets have switched and thought, “Well, actually people aren’t visiting Bath at the moment”?
Nicola: Yes, looking at the market and the furnished properties, some of those look like they are in the ‘build-to-rent’ sector – they are larger, possibly corporate landlords and some of them were definitely being offered as fully serviced with additional things to go with them. For instance, they’ve got leisure facilities, or gym facilities, so they are a slightly different part of the market. Your standard one-bedroom, unfurnished, you’re looking at achieving from £750 up to over £1000 a month, but the market ranges and it depends on what the property has and where it’s situated.
Likewise, two-beds, there are still those build-to-rent, largely corporate landlords out there, and that tends to be more of the furnished ones. Straightforward unfurnished two-beds, you will be looking at around £1200 as a benchmark, £1100 possibly. Again, it depends on where the property is and the facilities it has.
Peter: Obviously things are changing day by day at the moment, so this is a question I had listed: how are tenants actually managing their moves, from a logistical point of view? Because we’ve got a few people buying through us at the moment, and they’re saying, “Well, can tenants actually move in?” Are they generally doing it themselves, or are there removal companies out there now?
Nicola: There are. We had a two-bedroom property with a delayed move because they couldn’t get removals. The moment the government announced that logistics was on the list of sectors going back to work, they managed to secure a removals slot. So we’ve got a few properties where moves were delayed but we can now firm up move dates.
Likewise, we have had tenants who have been moving out; it’s easier, in that respect, and some have gone during the lockdown period. In terms of the logistics of what they’ve arranged, that’s not something that we get involved in, but what we are able to do is make sure that keys are returned, that our inventories and checkout inspections have been done once the property is empty, and we’ve still followed the normal processes. We’ve made sure that the tenancy is completed properly and professional cleaning, if it’s not been arranged by the tenant, is done. So everything still goes on as normal, but just slightly differently.
Peter: The contractors we use – inventory clerks, gas engineers, cleaners – have been excellent. In terms of maintenance, how have we managed that? Have we had any maintenance issues?
Nicola: No issues at all. Most of our contractors are still working – our gas engineers, electricians, cleaners, even general maintenance. We still have access to all of our contractors. If they’re having to go into properties that are tenanted, then they’re liaising with the tenants; whether tenants are out at work or not, they’re observing social distancing. Our contractors are taking their own precautions with regards to gloves and masks, making sure that tenants stay in a different room while they’re working. It’s really just being sensible and observing the precautions. In fact, they’re probably more cautious than if you were going to, say, the supermarket. Our contractors want to keep themselves safe, and they want to make sure they keep our tenants safe as well.
Peter: There was a little bit of concern at the beginning amongst our landlords in terms of how people were going to be paying their rents. The furlough scheme was put in place fairly quickly, but have we had many issues with tenants paying rent? Or making those requests? And what steps have we taken to advise them on what they need to do, or need to consider, if there is an issue in terms of payment?
Nicola: We have had requests; we’ve not had the high volume that we might have initially expected. To every request we’ve responded with a letter that asks the tenant for evidence of reduction in income, proof from their employer that they have been, for instance, furloughed, or that they’ve lost their employment.
We’ve had to negotiate between tenants and landlords to reduce rents, but I think we’ve had less than 5% of our portfolio where rent reductions have been requested, and probably half of that again where we’ve actually put rent reductions in place. We’ve had a couple of landlords who have been very generous and said that those rent payments don’t have to be made up at the end; they’ve said, “We want to help.”
Peter: That’s generally in circumstances where there’s a clear issue.
Nicola: Absolutely. It’s been done on a case by case basis. We’ve asked for evidence because if our landlords need any changes to their own mortgage payments then their provider will also ask them for evidence that they’re not going to be able to meet their payments. Overall, the requests have been very few. Our landlords have been surprised that they haven’t had that contact to say, “Your tenant is not going to be able to pay their rent.” So it’s been a lot more positive than we would have anticipated, certainly right at the very beginning.
Peter: I know on a usual day to day basis that’s a key role that you play – watching the rents coming in, monitoring it closely and nipping things in the bud very quickly – so I think that’s a credit to you, Nicola, because you do a very good job of ensuring that rents are paid on time. I think tenants need to understand that in many cases our landlords have mortgages on the properties and any payment holidays, it literally is a deferred payment, it’s not free money that they’re getting.
Nicola: Absolutely, and actually – and more importantly – we have some landlords who, the rental income is their normal income. Some have taken retirement, or early retirement, and the rent that is paid is their actual income that they have to live on. The key thing right across the board has always been negotiation, and top of the list has been communication and ensuring that any requests that come in are dealt with promptly, that we’ve established what circumstances tenants are finding themselves in, the same for our landlords, and reach a solution that both sides are happy with, so that it causes the least hardship for both parties.
Peter: But as you say, the issue of non-payment of rent is pretty much a non-issue, as far as we’re concerned. We’ve been very quick on making sure of that.
Nicola: Any enquiries that we have had with regards to that, we’ve dealt with very quickly and reached a solution that all parties have been happy with.
Nicola: Lettings is a compliance minefield. We’ve got to keep up with so many bits of legislation and ensure that our landlords are compliant, in every aspect. Is there anything new on the horizon that any would-be or current landlords need to be aware of? Anything that’s coming up?
Nicola: There’s been a couple of things, the first is the Energy Performance Certificates – all properties for rent must now have energy ratings of E and above. The final transition period has passed, that was the beginning of April this year. What’s now looming and very imminent is electrical insulation condition reports, known as an EICR, carried out by a qualified electrician. Properties that are coming to the market and with new tenancies that will be starting from 1st July of this year, have to have inspections and certificates in place – these last for five years.
Tenancy renewals and any current tenancies running through on a periodic basis, have to have this in place by 1st April next year. We have a good electrical company on board, and we’re getting a lot of these put in place and making sure that, at the end of the day, we are compliant. It’s probably been a long time coming with the electrical insulation condition reports becoming mandatory; Gas Safety has been mandatory since the late 1990s.
Peter: It makes sense, really, doesn’t it?
Nicola: It was about time that the electrical side moved to a mandatory basis as well.
Peter: Going forward, we are going to do regular compliance catch-ups with Nicola. People might not realise the role of a letting agent in ensuring that compliance is kept up to date, so we will be doing live broadcasts and letting you know about compliance checks and that side of things.
Finally, Nicola, have you got any top tips for a landlord at the moment? Current climate, or just at all.
Nicola: I think the key message for our landlords has been: don’t panic. We’ve put in place new ways of working, we are still open for business, and we are making sure that we’re communicating with tenants and landlords. We have secured new instructions, even during the lockdown period, and had new properties coming to the market. So it’s a case of, there are tenants out there, the market is actually probably as strong as it was pre-lockdown.