Lettings expert, Jason Bunning offers his take on why there was such an uplift in rentals in the last half of 2019. Will this year be the same? Are Buy-to-Lets still a good investment for landlords? Watch our video to learn more...
At a glance:
• New Instruction levels increased by 7% for us in 2019.
• There was a huge uplift across all regions in tenant activity last year.
• Rents have started to rise after a small drop in the first half of the year.
• Renting now costs very little in terms of start-up costs.
Jason Bunning - Managing Director of Lettings
"It’s fair to say that there will never be a time when the supply of available properties-to-let will meet demand. But the second half of 2019 saw a huge uplift across all regions in tenant activity, with a 22% increase on the same period last year.
Some of the traditional barriers to renting a home have been removed which has enabled more potential renters to enter the market place. With no fees payable to Lettings Agents and widely-available deposit replacement schemes, renting now costs very little in terms of start-up costs.
As you would expect, with increased demand and the increased pressures on landlords, rents have started to rise after a small drop in the first half of the year. While most landlords want a fair return on their investment and are in many cases reluctant to increase rents, preferring to retain good tenants, they are now having their hand forced where their investment yield has become marginal.
Renting has also been a sensible choice for buyers not willing to commit to purchasing their own home until Brexit is sorted and there’s more stability in the market. It remains to be seen whether there will be a sustained ‘Boris Bounce’ in the sales market and this influences rental demand. It will be interesting to see how this trend increases across the next six months.
Despite the continuing pressures on landlords, our New Instruction levels increased by 7% year-on-year, which was spread evenly across the company. Our levels of let property were up a very pleasing 15%. All this continued to feed into the biggest surprise of 2019 – continued portfolio growth for Arun, which accelerated across Quarters 3 and 4, growing by 6% in those six months and over 11% for the year.
Expectations for 2020 remain positive. Our portfolio will likely continue to grow at a similar rate. Our continuing strategy of maximising potential yields means that we’ll retain our existing landlords while attracting potential new ones.
New landlords looking for a long-term investment and wanting to take advantage of some very attractive Buy-to-Let mortgage deals on offer can benefit from our help and advice.
Further changes in legislation
2020 is once again a year jam-packed with potential legislation for the Lettings Market. This underlines the need for landlords to employ a professional Letting Agent; one that can provide them with help and advice while proactively keeping them on the right side of the law.
Coming up, the court of appeal will be reviewing Right to Rent checks. In March, all periodic tenancies will be covered by the Fitness for Human Habitation Act 2018, which gives tenants the power to sue their landlord for providing homes deemed not fit for human habitation. In April, there will be a further expansion of the EPC minimum standards. From this date, all existing tenancies will be included in the requirement to have an energy rating of E or higher.
Landlords of properties below this level must carry out work (up to £3,500) to improve the rating and register an exemption if it still does not meet the minimum level.
Also this year, the Renters Reform Bill is likely to be passed now that the Government has a majority. This will stop the so-called, non-fault eviction (Section 21). This and Lifetime Deposits, access to the Rogue Landlords register being expanded and potentially mandatory electrical testing, present a huge amount on the agenda in 2020 for landlords and agents alike."
As you can see there’s lots of change over the last period and it’s likely to continue throughout the year.
Get in touch and see how we can help you move forwards.
Want to learn more about the current state of the housing market? You can download the full report below: