PROPERTY MARKET OUTLOOK FOR LANDLORDS

Following the passing of the Renters Rights Act and the confirmation of a 2% rise in income tax on Landlords property income in the budget, many Landlords are asking what impact will there be on the Property Market ?  Steve McCullough, Director at Clarkes Properties Limited and a Landlord himself for more than 20 years has provided the following outlook.

SHORT TERM

  • Continued — and potentially accelerated — landlord disposal of highly leveraged properties, properties with significant maintenance liabilities, or those held outside of limited company structures.
  • Landlords will increasingly invest more of their own time or utilise more lettings agency services and landlord insurance products to navigate new regulatory requirements and mitigate rent arrears risk.
  • Securing high-quality tenants will take priority over maximising headline rents.
  • Sales instructions will continue to exceed buyer demand. First-time buyer activity is expected to remain strong or grow; however, with reduced appetite from landlords and second-home purchasers, only 50–65% of sellers are likely to achieve a sale.

MEDIUM TERM

  • A contraction in private rented sector supply, combined with improving property standards, is expected to drive rent increases as demand begins to outpace availability.
  • As real-term property values reduce against wage inflation, buyer demand is anticipated to gradually strengthen.
  • This maybe a good time for landlords to strategically re-enter the market

LONG TERM

  • Growth in new-build rental supply across both the private and social housing sectors.
  • Increased delivery of new-build homes for sale.
  • Higher levels of rental and sales supply, accompanied by rising buyer demand and a rising rental population, should realise market stabilisation for both rentals and sales
  • Amenity space, transport links, school catchments, and overall property condition and specification will play an increasingly significant role in rental and resale valuations in the private rental sector.