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TODAY'S OTHER NEWS

A fall in available rental stock would see ‘increased competition and higher rents’

Greater confidence and more certainty in the housing market following last month’s Tory election victory looks set to boost the housing market and unleash pent-up buyer demand from property buyers, including buy-to-let investors, in the early part of 2020, analysts predict. 

But Anton Frost, a partner at Carter Jonas letting agents, believes that continued political uncertainties, in particular, the deadline for Brexit rade talks at the end of the year, will keep a lid on activity levels in the housing market, including the buy-to-let sector.  

He said: “2020 may begin with a new government but the familiar uncertainty over our departure from the EU will remain, and there is no doubt that this year will see the lettings market continuing to navigate through what has been a turbulent period.” 

Frost, like many letting specialist, is concerned that tax and regulatory changes will dampen landlords’ appetites to invest and expand their property portfolios, with many consolidating their assets, or opting to flee the sector altogether.

The recent fall in the number of rental properties available to rent has restricted supply and left many tenants with less choice and prospect of paying higher rents.

Frost commented: “Policy changes and financial pressures on landlords has left many concerned that their investments are no longer viable. We’ve already seen the tenant fee ban and continuation of tax relief changes deter investors from the market in 2019, and this may well continue into 2020.

“With less stock comes increased competition and higher rents, and without legislative changes that can stabilise the landlord market, the tenant struggle for the right home at an affordable price may go unchanged.

“That said, no matter what picture the political landscape paints, people need to move and there has and always be a healthy level of activity in the rental market. Yield potential and tenant affordability are problems that remain paramount, but the market will always be transactional.

“Landlords are dubious about what 2020 holds, but clarity over if, how and when Britain leaves the EU should see an overall sense of stability return to the market, which can only be a positive thing.”

Poll: Have policy changes and financial pressures left you feeling concerned that your property investments are no longer viable?

PLACE YOUR VOTE BELOW

  • icon

    Glad to see these industry experts are providing insightful market analysis. Less supply means price will increase. Where would we be without this prescient market forecasting.

  • Paul Barrett

    Currently I see no lack of supply.
    ALL the local LA to me have pictures in their shopfront windows of available properties.

    Until there are no pictures then we will have sufficient supply.
    I believe from my own anecdotal information that these properties are available because LL are becoming far more choosey as to what tenants they take on...............and who can blame them!?

    I know few LL are prepared to let to anyone in receipt of HB.
    Endeavouring to source tenants who can qualify for RGI might be another reason properties are vacant.
    Holding out for a good RGI tenant is worth the risk of voids.
    Without RGI a LL is pretty much defenceless with the current dysfunctional eviction process which is scheduled to become even longer.
    So from my perspective there is still too much supply to have any real upward pressure on rents.
    Until we get to the stage of tenants having to submit sealed bids for rental properties then there will remain sufficient supply.
    Ideally LL want 20 prospective tenants viewing all with their own Tenant Referencing Passport all capable of RGI.
    This isn't the case currently.
    It will be ages before this situation ever occurs.
    Tenant demand seems to be the same.
    The problem for many aspirant tenants is they can't afford where they want to be.
    Very few of them are prepared to adjust their desires to what they can afford.
    Of course that is when you get the clarion calls for Rent Controls which everyone knows would simply make a bad situation even worse.
    Reducing demand is the only way to reduce rent costs.
    Building property can never cope with ever increasing demand.
    Border control is the key to this.
    But no Govt is prepared to restrict migration even of illegal immigrants.
    Apparently the new woke descriptor for these is undocumented migrants FFS!!
    Even with a massive social housing building strategy and enhancing planning permission for more private home development it will be decades to achieve the homes required and that is only if the borders are closed today!!!
    In the meantime there is a PRS that has proven able to house those that wanted housing.
    Unfortunately Govt seems hell-bent on eradication of the small LL who has been the major component of the PRS housing all these tenants in the absence of sufficient social and private housing.

    Govt has a really weird distorted ideology seeking the destruction of those who are doing and have done the most to supply the rental housing that has been in so much demand.




  • icon

    There seems to be no shortage of rental properties where I am and the rents are very low.
    It is difficult if not impossible to ask tenants to pay more, so our rents are more or less the same as they were 20 years ago.
    I am going to attempt a small rent rise across the board this year though, which (believe it or not) may result in some of my tenants giving notice.
    My costs are rising every year and I cannot go on leaving rents as they are, indefinitely.
    The property prices in Chepstow area has risen around 30% since the bridge tolls went.
    I tried to increase the rent on one of my properties in this area, by £50 per month after a tenant left.
    The property remained empty for three months so I lost quite a bit in rent and eventually had to accept just £25 per month more.
    I wonder whether it was worth doing after that and I am reluctant to mess with it, but it is just getting ridiculous now, so I am going to try anyway.

    Paul Barrett

    With your costs increasing and with control over your assets being reduced by Govt are you not at a tipping point where viability is questionable?
    I suppose if you choose to retain because of existing and hoped for future CG then perhaps worth retaining.
    But from what you have advised it seems doubtful that your property investments are worth continuing with.
    You surely are not the only LL in this potential predicament.
    Is it worthwhile continuing to provide what is clearly a very useful service but at now no discernible financial benefit to yourself?
    You ain't no charity!
    What is your take on these circumstances.
    Personally I'd consider selling and investing in fewer properties in areas where rent increases would be possible.
    Though there could be a myriad of business reasons why this wouldn't be possible for you.

     
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