Time for landlords to reflect and move forward
01 December 2020 549 Views
When 2020 began one of the biggest issues most landlords faced was the ending of tax relief introduced over four years ago by George Osborne. Given the year that we have had I think most landlords would view that as a somewhat trivial area of concern compared to the issues most people have faced in the last eight months.
This has been the most challenging year any of us will have faced in our entire lives and the impact of Covid 19 will continue long into next year. But there have been pluses and minuses along the way. While this may have been a year that many landlords would rather forget there are some lessons which can be learned from the impact of the pandemic.
What may surprise many people is that I have found that these last few months have proved more, rather than less, stable for landlords and tenants. We have had fewer landlords giving notice to tenants and fewer tenants giving notice to landlords. The importance of stability and having a home has never been more important and has been emphasized and reinforced by the pandemic and, I believe, this will continue.
The relationship between landlord and tenant has also changed. The pandemic has accelerated this process and encouraged, through necessity, the need for greater communication because there have been so many major issues to resolve in a short space of time. This is a good thing, is a positive action in a time of negativity, and should continue in the coming years. Better communication means better relations for all.
This has also been a time to take stock and to assess where individuals are with their business. Many landlords and investors may not have had a chance to reflect on the structure of their investment for some time but this year circumstances have allowed many to pause, take note, and see where they are and, more importantly, where they would like to be in five or ten years’ time.
It is a time to look at your property, your investment, and how it is structured. It has never been more important to have your finances properly structured, your insurances in place, your certification and compliance with regulations up to date, and your property professionally managed.
It is also a time to reflect on the profitability and viability of your investment. Getting a good return as a landlord or property investor has become harder in recent years but is possible. It does require more organisation of your finances, and the way you operate but the returns are there.
The last year has also told us that landlords and investors need to be more professional than ever. The days of the amateur landlord are long gone and many will struggle with the changing legislation and regulations along with the tighter financial rewards from letting so it is not a market for someone who does not have the time or the inclination to be totally committed.
But this remains a strong market. The private rented sector (PRS) is the second largest provider of homes in the UK. It has grown enormously over the last 30 years and there is room for more growth. You only need to look at the enormous amount of institutional investment being put into the sector to highlight the confidence in the strength of this market in the coming decade.
Therefore, I would urge all landlords and property investors from those with a single property to those with an expanding portfolio to use the festive period as a time of reflection. The coming year, like its predecessor, will be unlike any other. But amid the gloom and doom there can be optimism and opportunity. This is a time when the old way of doing things probably won’t work ever again and we must all adopt new systems, new methods of delivery, and build new relationships in the coming year.
There won’t be another year like 2020, thank goodness, but there could be an exceptionally good 2021 ahead and beyond with the right planning, organisation, and forethought. The market changes all the time and coronavirus has simply accelerated this change. The best landlords and property investors will recognise and understand this and respond accordingly. The private rented sector is here to stay and for those willing to adapt and be flexible there are opportunities in the years ahead.