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TODAY'S OTHER NEWS

Buy To Let exodus underway? Rise in landlord numbers selling units

New data from letting agents suggests that there’s been a substantial rise in the number of landlords selling buy to let units.

The Association of Residential Letting Agent’s latest market snapshot - which relates to September - says that ARLA-member agents have reported an average of five landlord clients selling units that month. 

This has risen from the average of four which was the monthly norm for well over two years: the new average of five is the highest recorded by ARLA.

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Meanwhile the rest of the ARLA report shows that far from landlords being uncaring during the pandemic, many appear to be resisting putting up rents as the crisis continues.

Some 40 per cent of agents witnessed landlords increasing rent in September compared to 48 per cent in August. 

This is 18 per cent lower than in September last year when the figure stood at 58 per cent.

The number of new prospective tenants also fell for the first time in September since the housing market reopened after the spring lockdown in May. 

The average letting agent branch registered 82 new tenants in September, a decrease from 101 in August. 

The number of new tenants per branch in September is the lowest since February this year, when there were also 82 tenants registered ahead of the market temporarily closing due to the Covid-19 pandemic.

And the number of rental properties available per letting agent branch fell from 208 in August to 193 in September. Year-on-year this is the same figure as in September 2019.

 

 

“Our latest figures show agents are continuing to support landlords and tenants during the ongoing pandemic with rent increases down by almost a fifth year on year and renters staying in their tenancies for longer” explains ARLA president Angela Davey.

“As we head towards winter and further uncertainty due to increasing lock down measures, it is vital that tenancies are maintained. To this end, with the furlough scheme finishing in October, Westminster must follow the Scottish and Welsh authorities in providing a package of support to tenants to keep the rent flowing” she adds. 

“This is absolutely vital in keeping people with Covid-related arrears in their homes and ensuring that landlords continue to have funds to make mortgage payments.”

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    Those of us that remain will have a larger group of tenants to choose from, tenants with poor histories and those on benefits will be finding it very hard to secure a roof over their heads.

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    I recently had a house come empty after 10 years continuous rental to a tenant who loved the place and didn’t want to leave but her work was relocating.

    In the first 2 days after she had gone I had 22 viewings and three people competing for it in that 48 hour window. Most saying they were ‘desperate’, absolutely nothing available, and the unsuccessful applicants extremely disappointed not to have got it.

     
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    I can concur that this is 100% accurate, with Landlords leaving the sector in their droves.
    Generation Rent, Shelter and other short sighted tenant support groups attacking Landlords have blood on their hands for turning a housing shortage into the national disaster that is on the way.


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    They wanted this. They’ve got it.

    When we hear them whining about rents/homelessness/the inability to find a rental, we should all remind them of this. Repeatedly.

     
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    I never thought I would leave the sector but I’m thinking of it. These kick the landlords in the teeth policy’s will resort in government shooting itself in the foot.

     
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    • 02 November 2020 10:34 AM

    There are still too many letting properties.
    The rental stock needs to substantially reduce before it starts to have a noticeable effect.
    We need to see empty LA windows before we can say there is a shortage of stock.

    Unfortunately there is still a surplus of stock now that fewer legal migrants are arriving and AirBnB has effectively finished.

    Plus many tenants are returning to parental homes it being pointless renting with no jobs to be had.
    The hospitality sector generated millions of tenants.
    Well those jobs will be gone or much reduced.

    There needs to be a massive shrinkage of rental stock as currently tenants have too much choice and rents can't be increased.

    LL should sell off and deleverage with higher rents being achievable when they have.

    I say to LL sell off and become more financially resilient with higher rents being achievable if you all sell off stock.

    LL need a far smaller and higher rent charging PRS which is also more financially resilient due to lower leveraging.

    LL get selling.

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    I disagree if their are too many rental properties surely those with the best value rents with well maintained properties will have no void periods at all, being greedy leads to the sector being disliked and governments intervening

     
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    Depends where in GB your are, still strong demand in and around Norwich

     
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    The different views show that the situation differs from region to region.

    I think in general, if you stick to fairly decent areas, demand will continue to be strong. Awful areas will always be difficult to rent, unless you're willing to put up with tenants on benefits and a strong possibility of problems galore.

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    • 02 November 2020 15:35 PM

    @daveedmunds

    Please define the point at which you consider a LL becomes greedy.

    Surely if a LL cannot achieve market rent then he may need to reduce rent required.

    At what point do you consider market rents become greedy.
    I'd like to know so that I may price my rent £1 below what you consider is greedy

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    No rocket science here frankly.
    With S24, increased legislation and then Covid debts, of course the PRS is shrinking!!
    Since when did people invest money to loose it?
    Wait till 2021, it will be known as the year of the housing crisis and councils flooded with homeless families as landlords desert the PRS under financial pressure

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    • 03 November 2020 13:13 PM

    I actually believe that many LL will be far more pragmatic.

    They won't abandon the PRS completely.
    For those that determine to remain letting on a long term letting basis they will make themselves far more financially resilient to the point of selling all but one letting property which will invariably be mortgage free courtesy of a LL selling off other mortgaged properties.
    A resilient LL could then better cope with rent defaulting etc.
    Such LL will be extra diligent on whom they allow to become their tenants.

    So I believe the numbers of LL will remain roughly the same as now but owning far fewer rental properties.
    The PRS will tend to become far more financially resilient.

    LL have seen how terribly exposed they are to feckless rent defaulting tenants.
    As such LL will take steps to ensure their businesses won't in future be compromised by feckless rent defaulting tenants


    Inevitably this means massive deleveraging which means a massive reduction in BTL lending.

    I suppose conversely it could result in more BTL lending but at far lower LTV as LL seek to bolster their financial resilience by having far more 'skin in the game' than currently.

    It is clear from the current circumstances that being on the ragged edge of viability doesn't make much business sense being a leveraged LL above about 35% LTV.

    A rent defaulting tenant could easily result in a lender repossession.

    Not much business sense in being too highly leveraged.

    I consider many LL will become far wiser as to how they invest.

    What has happened to the PRS will have been a wake up call for many LL.

    The sector is due for a radical downward adjustment.

    Tenants should be very concerned at this most likely prospect.

     
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    I guess I was one of the resilient ones with no mortgage. I still got out. The loss of LR was my stimulus. The capital was reinvested and so far I've made twice as much from 20% invested in tax shielded stocks and shares than I grossed in a year by locking 100% away. Now I help landlords negotiate with their tenants. Far better from the outside looking in.

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