The bounce back of the rental market following the Covid-19 crisis combined with incoming electrical checks legislation, is a perfect storm which could lead to a backlog of administration for letting agents and landlords, according to PropCert.
The national provider of property certificates says that with more moves expected to take place in the coming weeks, around the same time the new legislation is introduced, transactions could be delayed unless property professionals have the necessary processes in place to deal with increased demand for electrical safety checks.
Rental market performs strongly post-lockdown
Following the reopening of the property market on May 13 and the ongoing easing of lockdown measures, activity in the rental market has surged, the latest data shows.
According to Goodlord, both new and completed tenancy applications eclipsed 2019 levels in the first two weeks of June as pent-up rental demand continues to be released.
On June 2, new applications were 122% up on the volume recorded on the same day last year. Further research from Knight Frank reveals that the number of new prospective tenants in the week ending June 6 was 40% higher than the five-year average and the second highest figure recorded this year.
"It's pleasing to see the rental market bounce back so strongly post-lockdown. The next few months looks set be an extremely busy period for the rental market as tenants looking to move before lockdown make their move, while those who have decided they want to relocate in recent weeks also enter the market," says Tom Harrington, Managing Director of PropCert.
"However, with new legislation coming into force next month, the administrative burden on agents and landlords is set to increase further still," he says.
Demand for electrical checks will rise from July 1
The Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020 come into force on July 1.
The new regulations will require landlords to provide an EICR report before the start of all new tenancies. All fixed electrical installations must then be inspected and tested at least every five years by a qualified professional.
Landlords will also be required to obtain a copy of the test report and supply it to all tenants within 28 days, while also retaining a copy for themselves until the next inspection is due.
From April 1 2021, the rules will be extended to cover all existing tenancies.
"Agents and landlords will now need to process more electrical checks than ever before and this means that the electricians they usually work with may not be able to keep up with demand," Harrington explains.
"If electricians are unable to meet demand and checks are not carried out, this backlog could lead to tenancies being delayed or falling through, which would be highly counter-productive as the market continues to recover from the effects of Covid-19."
"Moreover, it's hugely important that electrical checks are carried out to a professional standard in order to ensure tenants' safety and comply with the regulations. Failure to do so could see agents or their landlords hit with significant financial penalties," he says.
Handling high volume of electrical checks will be crucial
According to PropCert, agents and landlords need to make sure they have the systems in place to effectively handle the introduction of the new regulations.
"Electrical safety checks will need to be turned around quickly and efficiently in order to meet demand and keep the rental market moving," says Harrington.
"This means having access to a higher number of electricians will be vital, while being able to manage checks electronically will save time, helping landlords and agents to keep on top of things."
Harrington adds that the compliance obligations for granting a new tenancy are higher than ever before and the requirement for mandatory electrical safety checks will add to the workload of letting agents and landlords who are still dealing with the consequences of the pandemic.
"That's why we provide property professionals with access to a database of over 250 electricians nationwide. Our portal also allows customers to place orders online, track with real time updates and store their certificates securely," Harrington explains.
"Our technology and fast turnaround times can help agents and landlords to get their heads around another new piece of legislation. We’re here to support property professionals so they can provide a seamless and efficient service, while also ensuring compliance," he concludes.