The buy-to-let sector has undergone significant changes in recent years, with much talk about Landlords 'selling up' and subsequent stock shortages in the rental market.
While it is true to say that the pandemic - coupled with recent legislative changes - have led to some Landlords choosing to switch or withdraw their property investments, the headlines do not always paint a wholly accurate picture of the still-relevant opportunites of buying-to-let.
The truth behind the headlines
The last few years have seen a significant number of landlords exiting the market, but the reasons for this trend are not necessarily as clean cut as the media would have us believe. Many Landlords, quite simply, have chosen to take their profits while the market is buoyant, such could happen in any average year.
The pandemic-born preference for a quieter pace of life - and the resultant mass exodus from cities to more rural locations - has also, inevitably, been a factor. On top of this, the loss of the mortgage interest tax-relief in 2020, the introduction of additional purchase tax and the increasing legislation on energy efficiency has also played a significant role.
In spite of these challenges, however, and the changing pace of regulation, the extraordinary growth of the rental market post-pandemic has actually created a unique opportunity for existing Landlords and budding property entrepreneurs...if approached correctly.
Private Landlords, after all, are currently playing a crucial role in providing much needed housing, and at a time when so many are being priced out of homeownership.
I’m a Landlord… what should I do?
Currently, there is a distinct mismatch between tenant demand (up 81%) and properties available to rent, which has significantly reduced the risk of vacant periods. Not only this, tenants are typically looking to sign longer leases, as long term renting looks set to become a lifestyle choice akin to that adopted by nations such as Germany, where nearly half of all homes are privately rented.
The result of less stock coming back onto the market, less often, means renters are also increasingly widening their seach areas from city to suburb, which bodes well for Private Landlords previously limited by the ‘local’ tenant pool.
Currently, privately rented properties account for a third of all homes across the nation, and it is the commonly held opinion of estate agents, that more support is needed to help maintain this stock of reasonably-priced rental property. This includes, but is not limited to, offering potential and existing landlords more of the advice and support they need to tap into this period of extraordinary tenant demand.
It’s an opinion mirrored by Nationwide, who recently launched The Landlord Works, a free-to-use platform designed to support landlords manage their properties and navigate the changing rules and regulations.
I’m thinking about becoming a Landlord… what should I do?
With evidence that approximately a quarter of landlords with more than 20 properties have recently reduced their portfolios, there is an opportunity for those considering buy-to-let investment, to buy a property with a tenant already in situ. These properties are typically priced more competitively than an equivalent empty property, which presents a unique potential first step on the ladder of this thriving sector.
In summary...
Essentially, the outlook for the buy-to-let sector is positive, but the caveat is that fulflling landlord obligations, might require a little more support than previously. As Maidenhead's leading estate agent, Braxton are poised to help guide new and existing landlords on these legalities, and ultimately restore confidence in buy-to-let investment.
For more details on renting your existing property, or for information on buying-to-let in the Maidenhead area, contact James Farrance at Braxton on 01628 674234.