As the conference of the decade gets into full swing this week in Glasgow, what does it mean for anyone owning a residential property investment in London? At Chambré, as you would expect with our track record of being professional, ethical and trusted advisors – we have had a few ideas which we hope you will find useful.
Please let us know how we can help you with any of these suggestions or any aspect of letting, buying, selling, or refurbishment of residential property in Central London.
Be ready
Whatever gets agreed at Glasgow green issues are going to be the filter through which we live our lives for the next 50-100 years. The world will truly never be the same again as we can no longer look the other way and ignore the evidence of climate change. The day of reckoning has arrived, and the climate emergency will be the backbone of all political decisions for the remainder of our lives and also for those of our children.
As a result, it is important to think about how we respond to this. The property industry is often subject to a slew of legislation and given deadlines to meet at very short notice. We cannot help feeling that landlords will be very easy targets/wins for any government. ‘In the course of business’ i.e., making money out of the property has always meant that any new safety initiative – be it fire safety, electrical checks, gas safety, money laundering, etc – you name it, have always been imposed on the property industry without much notice and quite often too clumsily.
So be prepared. The first idea is to embrace rather than resist this. Let’s not rely on things being too big or too hard to change. The government will trial schemes on rented properties over the next twenty years. Compulsory insulation, boiler switches away from fossil fuels, etc could involve property investors before homeowners.
Talk to us as professional agents, so that you are in the right frame of mind to be proactive, not reactive. Use our industry knowledge so you know what is coming down the track.
Plan
Now we are mentally prepared for what is coming, we should consider how best to plan for it. There are always costs for all new rules and regulations. The change in the fire and furnishing regulations in the 1980s had a huge impact on rented properties. No longer able to put tatty old furniture into rental properties, a whole industry grew up around tasteful, good-quality furnishings that tenants – aware of their rights came to expect. At the time the costs were very unwelcome to landlords.
We know that to ‘green’ a property is going to take cash, so make sure prior to any interest rate rise that your finances are sound. At Chambré we can advise on the suitability of investment property. Have you the right kind of property for its target market? Is the presentation, right? Make sure that your rental yield is giving you a cushion for financing improvements over the next 5-10 years when the impact of green improvements will ramp up.
Do a green audit of your portfolio
The next stage will be to consider what will need to be done and this again can be viewed in a positive way as an opportunity, not just an expensive programme of improvements.
For instance, start on the most basic ideas first. Is the lighting in the property as cost-efficient as possible? Have all the bulbs been switched to LEDs? Have you insulated the loft, lagged the pipes and installed a smart meter for electricity? Is there a timer for the heating? Do the tenants know how to use it? This is simple work for good property managers and at Chambré you could ask us to undertake a survey of your property and make the recommendations, appoint contractors and supervise the work.
At the other end of the scale, there are going to be major projects which need a green eye on them now. So for instance when are you going to replace that gas boiler with a greener alternative? How does that cost fit into the tenant and refurbishment plans you should have for your rental investment? Too many landlords wait for a void period between tenancies and then throw a load of cash in a tight deadline to get the property improved. Talk to Chambré and we can plan years in advance as to when to manage any upgrades, and how best to phase them in without having too much of a void between tenancies and too much expense. This is a good asset management and what we do for our clients.
The transfer to green technologies will be a very unwelcome surprise if not planned for and the old model of doing it at the end of a tenancy will be very tricky in terms of cost and if there are continued supply shortages. If a hydrogen boiler suddenly must be financed, sourced and fitted in a short window, I think most of us would agree that it is unlikely under those circumstances to be a stress-free, affordable exercise.
Market in a green way
Thinking green not only means about the property itself but also how it fits into the environment. Is the property near a cycle route? Is there a car club at the development? Are the grounds and the property doing all they can to offset carbon? Are the block managers making sure that the communal costs – lighting and heating, and recycling are all as effective as possible?
People are going to expect everything to be as green as possible. It will be important to make your property attractive in this new world. Advertise and market green features. Stand out from the crowd. Lead the change, don’t wait for everyone else to start doing this.
Mention anything green in the property, in the block, on the street or in the neighbourhood that will show that you are responding to the challenge that after COP 26 we will realise is not going away. To do this – check you have the right kind of letting agent fulfil your property’s potential. Are you using the best agent or just the one that you have always used because it feels like too much work to change? Talking to us at Chambré you may be surprised by fresh new angles and advice. Experience counts, not a global brand name.
The ‘Greta’ generation is here to stay
When all is said and done the tenants of the future are going to demand greener properties. We operate in a market of demand and supply and younger, environmentally aware tenants – starting out in their professional lives will not accept excuses or inaction on climate change. The anger of the Greta generation is palpable and quite rightly they have ensured that green issues are now front and centre of everything. We all need to walk the talk about the environment, and nothing is more important than our homes. Younger people will not be fobbed off with excuses and inaction on any level – including you as their landlord.
Conclusion
So as COP 26 starts, let’s understand that everything will be different from now on. Do not be afraid of the change, plan, prepare and accept what opportunities it will produce. Have help from a partner and do not hesitate – the time is now.
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