As we settle into the new year, it’s an ideal time to consider year ahead. In terms of the private rented sector, the impact of increased legislative demands and the appeal selling to benefit from the capital growth saw a number of landlords withdraw from the sector during 2021. However, for landlords who have remained in the market the coming year looks optimistic.
Demand for rental property continues at unprecedented levels. The private rented sector is no longer the second choice for many and renting has an appeal to many looking for long-term renting without the responsibility of home ownership. Shorter-term lets are also being sought by house sellers looking to free up their chain or from those relocating and wishing to get a feel for the area before committing to the purchase of property.
The competition for available stock may make the market challenging for renters, but offers benefits to landlords. Multiple applications are being received for available property, so landlords can be confident that they can secure the best possible tenant for their rental property.
And as demand outweighs supply, rents continue to increase. This obviously applies to newly available property as it comes onto the market, but landlords with long-term tenants should also consider requesting reasonable rent increases on an annual basis to ensure that their property continues to achieve market value for the best return on their investment.
Although covid remains an uncertainty, the measures initially implemented to support tenants to remain in their homes, such as longer repossession notice periods and court closures have been reverted back to pre-covid requirements. This offers greater reassurance to landlords that they can gain possession of their property should they need to.
Although the coming year should be settled for landlords in terms of their legislative responsibilities, there are key pieces of legislation that will have a significant effect on the private rented sector in the coming years. The White Paper on the Renters’ Reform Bill will propose reform to repossession processes, the introduction of lifetime deposits and reform to eradicate rouge landlords, although this has been delayed and is only the initial step to new legislation. However, such reforms should be viewed as potentially beneficial for both landlords and tenants.
Minimum Energy Efficiency Standards (MEES) are also going to come under the spotlight with requirements set to be increased to a minimum EPC rating of C by 2025. Several industry bodies have argued the need for a more nuanced approach and this issue will be a hot topic throughout the coming year. Landlords looking to invest in rental property however would be wise to carefully consider the EPC rating and its potential when searching for their investment property.
For the coming 12 months the market looks robust for private landlords, although they should be mindful of challenges in the longer term and with these in mind make a conscious effort to achieve market value and effectively maintain property standards to keep their investment in the best shape. Using the services of a professional letting agent, such as those offered by us at Brittons, can help manage a property to its full potential. For a range of landlord services call us on 01553 692828 and let Brittons let for you