By Steve Roulstone
It looks as if the rent increases that we have seen on average are beginning to have the effect of allowing Mortgage brokers to have more confidence in the’ Buy to Let’ market as reports this weekend in The Daily Telegraph confirm. Such providers as Mortgage Works and Paragon are clearly confirming their stance and the fact that potential Landlords have more choice is an added benefit with the amount of choice that is available.
Differing options.
The report makes clear that buyers have options at the moment, with deals to be done both in the open market and of course with new build as Builders need to move on and complete sites as soon as possible and move to the next plot of land that has more than likely been purchased for some time and for builders where land lies without being broken, it is no different than an unsold completed house.
Landlords taking note.
In this case, the article was bought to my attention by an existing Landlord as it had raised a query in his head about the level of rent that was being achieved at his property rather than any advantage in buying further property at the moment. His call was all about the opportunity to achieve a higher rent than he was currently enjoying and of course that is a scenario that we look after for all properties and Landlords we are charged to look after.
Regular undertaking.
What we do every year is to look at rent levels in the spring, which is the time when most rents increase as the market achieves its natural seasonal high and the time when most people look to move. We do this by reviewing every rent where there has not been a change of Tenant in the last six months (ensuring we review in line with Landlords rights for every property at least once a year) But in this case whilst rents may be rising Nationally year on year, I had to advise the Landlord that the time was not yet right.
Market trends.
We are currently in one of those periods, where the amount of property coming on to the market is outstripping demand. Having ensured we are renting the number we would expect considering both the time of year and current popularity of renting, we know that the effect, which will exist throughout our area and therefore with our competitors as well, will be to encourage offers from tenants and mean some properties will stay void for longer than we would wish. Our answer is to attract as many Tenants to us as possible by reducing our Tenant fees for the spring.
Good advice.
So my advice had to be to hold on any rent increase until we see an increase in activity. (which will not be during the current cold spell) in the meantime, we will do everything we can to attract the Tenants and when the time is right acknowledge the increase in rents on behalf of all of our Landlords, but to encourage Tenants to look at the market when so many properties are available and when we know that Landlords will be encouraged to accept offers does not do the Landlord good service, which just goes to show, that not all reporting can be echoed in the market place and not all areas of the Country react in the same way at the same time! Perhaps it would be better if such reporting pointed out those areas can vary, because on the ground, we know that they do!
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