Being a landlord is a challenging process, and there is a lot to consider. You need to focus on what you offer and how you comply with regulations. There are so many aspects landlords need to consider that it would be easy to overlook the needs of the tenant, but of course, that would be foolish. It is vital landlords focus on what they can influence, but they should also pay close attention to the level of demand for rental properties.
According to the Q3 2019 PRS Trends Report, based on information provided by landlords speaking to Paragon Mortgages, it appears tenant demand is “growing” or “booming”.
Rising tenant demand isn’t a surprise for many in the letting industry
Close to one-third of landlords said they believe tenant demand is on the rise. In the past 12 months, this is the highest proportion of landlords who have stated this opinion.
John Heron is a director of mortgages at Paragon, and he spoke to the Mortgage Introducer, saying; “A clearer picture is starting to emerge of the impact that multiple government and regulatory interventions are having on the PRS. In broad terms, landlords have been buying fewer properties and selling more at a time when there has been a resurgence in tenant demand. RICS reported a similar trend in their August residential survey and it is widely anticipated that this will lead to reduced choice and higher rents for tenants. This is probably not the outcome that policy makers were looking for.”
Another indicator investors are confident about the market comes in the increase in size and value of ownings of portfolio landlords. These are people who own more than investment property, and the average portfolio now holds 13 properties and carries a worth of £1.82m. These findings suggest there is optimism from landlords about the market, but there is a need to remain cautious about being a landlord.
New landlords must research the market carefully
If you have studied the demand for rental property, and are considering entering the market, make sure you do your research. Many people struggle to obtain a buy-to-let mortgage, as the application process is stricter than the one used in determining who qualifies for a standard mortgage. Landlords also carry greater costs in the application process, buy-to-let mortgages have a larger deposit and the landlord must project expected profits from the let.
With all this work to be carried out before you buy property or think about vetting a tenant, it is easy to see why many potential landlords get cold feet about the process. It isn’t easy to become a landlord, and it shouldn’t be. However, many people find the role to be rewarding, in many senses of the word.
If you are keen to enter the letting industry in North Devon or North Cornwall, contact Bond Oxborough Phillips, and we’ll be pleased to help. We assist many local landlords, and no matter what your overall aims or ambitions are, please contact us today and we will guide you through the process.