October 9

It’s a great time to be a buy-to-let landlord

The latest ARLA report is evidence of the UK’s positive PRS environment

The latest ARLA report into the private rented sector (PRS) shows that buy-to-let landlords are recovering well from the attempts by the government to make life tough for property investors. More landlords are raising rents, and the growth in the PRS has resulted in more competition from tenants for available properties.
In this article, we examine the ARLA report’s main findings, and what they mean for buy-to-let landlords.

More buy-to-let landlords are increasing rents

A trend has developed in the PRS. More landlords are raising rents every month. In November 2016, only 16% of letting agents reported that their landlords were increasing rents. In August 2017, this number had increased to 35%. It is the highest number since July 2015, when 37% of letting agents reported their landlords were increasing rents. A year ago, in August 2016, only 27% of agents witnessed rent increases.

Supply of rental properties is falling

ARLA’s member branches have seen a reduction in the number of properties they manage. In August 2017, each branch managed an average of 189 properties, down from 192 in July. The highest supply is in the West Midlands, where letting agents are managing an average of 264 properties per branch. In London, branches are managing just 107 properties on average.

Tenant demand is rising

While the number of managed properties per branch has decreased, the number of tenants-in-waiting has increased to 72 per branch in August. Demand is highest in Yorkshire & Humberside, where branches have reported an average of 127 prospective tenants on their books. In the North East, branches have only 27 prospective tenants.
Other regions where there are more than 100 prospective tenants per branch are London and the West Midlands. The East of England and Scotland join Yorkshire & Humberside to make the three regions with fewest prospective tenants per branch.

Length of tenancies remain stable

In August, the average length of tenancy across the UK was 18 months. It is down one month from August last year but masks a wide discrepancy between regions. In the West Midlands, tenants stayed in the same property for an average of 26 months, while in the North East the average tenure was 11 months.

Void periods are down to three weeks

The average void period between tenancies is now only three weeks. Despite the small fall in the length of tenancies, buy-to-let investment properties are being let faster – thus reducing any negative cash flow effects when a tenant leaves.

Buy-to-let landlords should be able to continue to raise rents

The ARLA report provides evidence that buy-to-let landlords should be able to raise rents consistently.
Fewer properties under management and more people searching for rented property looks likely to be the trend over the next few years. The number of rented households is expected to increase by 1.8 million by 2025 (PwC, 2015). Under these circumstances, it’s highly likely that buy-to-let landlords will continue to raise rents – a direct result of misguided government policies such as the change in mortgage tax relief, increase in stamp duty, and restriction of property maintenance allowance.

The Ezytrac experience is even more bullish

Our experience is even more bullish than the ARLA report concludes. We’re taking on more landlords and properties every week, and the number of prospective tenants on our waiting list is rising rapidly, too. We’ve grown our portfolio of properties managed by almost 20% over the last couple of years, making us one of the fastest-growing investment property management companies in the UK.
Our tenant finding and vetting procedures have helped us consistently re-let properties faster than the national average. Most properties on our books are tenanted within two weeks of becoming vacant. Additionally, many of our landlords’ properties have been rented by the same tenants for years, comfortably outperforming national averages for the length of tenancy.
The imbalance between demand and supply on our books is why we are constantly seeking new properties to manage to satisfy demand from the growing numbers of prospective tenants. Contact one of the Ezytrac team today on +44  01522  503  717, and discover how Ezytrac could help your property portfolio reach its maximum potential, while you live the lifestyle you desire.
Yours in effortless property management,
Brett Alegre-Wood MARLA MNAEA


but-to-let landlords

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