Tue, 17 Jan 2023 | Lettings market update
As one of our valued clients, we would like to share our property market views with you for 2022 and prepare ourselves for 2023.
Prior to the pandemic, we had seen relatively stable changes within the property market, for both capital values and rental returns. With more people opting to work from home than ever before, the London and major city tenants and buyers took a fresh look at possible moves to the suburbs and countryside. In addition to this geographical shift, there was a reduced number of new landlords entering the property market, helping catalyse a 23% surge in rental prices. The old cliché ‘supply and demand’ has certainly played a huge role in these increased prices within the rental markets.
With legislation changes and shifting tax policies on landlords, the lettings market had seen some landlord clients take advantage of the buoyant sales market and they decided to sell their assets. However, over the latter half of 2022, we have observed a significant drop off in rental properties being sold as landlords benefit from increased rental prices. This has promoted a more positive opportunity for landlords, particularly bearing in mind the increase in property values over the last ten years, and with the forecast remaining strong for the future.
Our view is that property values and rental levels are rebalancing. The past has shown us that any corrections are always positive, particularly following what has been a bullish market. Interestingly, in the first half of December 2022, which traditionally sees an understandable drop off in enquiry levels, Prospect registered as many buyers and tenants in that period as we did in the first half of November 2022. This is optimistic news as we enter 2023, showing signs of a resurgence in confidence in the future of the property market.
To help you evaluate your property choices for 2023, we would relish the opportunity to provide you with a free financial overview to include property value, rental potential and mortgage advice where needed. This will help provide you with all the options and an informed opinion, prior to making your property decision this year.
Lettings and Property Management – You’re in safe hands
With the landscape of the private rental sector constantly changing Prospect have been focusing on protecting our landlords’ clients by providing a world class Management Service. More landlords than ever before have been opting for our Management Service to ensure their investment properties are kept in prime condition. Our well-managed property portfolio encourages your tenants to stay in situ for longer, which provides you the Landlord, with more consistency and continuity with your investment property. In fact, over the course of 2022 we have seen our average tenancy length for our Fully Managed tenancies increase to 35 months and an average rent increase of 7%.
If your property is not already managed by Prospect Estate Agency and you would like to find out how to get the most from your investment, please contact your local office today.
Mortgages
With huge pressures on landlords from Regulatory, Taxation and in recent times Mortgage Finance, we have been receiving more and more enquiries for mortgage advice from landlords.
Due to this response, we are now working with a regional IFA (Independent Financial Advisory) practice who works with portfolio landlords giving advice that is geared to increase profitability and long-term succession planning.
If you would like to speak with one of our experts, please contact us today.
Smoke and Carbon Monoxide alarms
The Smoke and Carbon Monoxide Alarm (England) Regulations 2015 changed on the 1st of October, the new rules state that all rented properties in England must have a carbon monoxide alarm in rooms wholly or partially used as living accommodation where there is a fixed combustion appliance. This includes gas heaters and boilers but does not extend to gas cookers, if your property does have a gas supply and your property is under our full management service, you can be re-assured that we have already contacted your tenants to ensure a Carbon Monoxide detector is supplied where required. We are also checking smoke and carbon monoxide alarms at check in, mid tenancy inspection and check out to ensure the safety of your tenants.
Whilst it remains the tenant’s responsibility to replace batteries in the alarms if they are not sealed units’ mid tenancy, it is vital that where your tenant reports that their alarm is faulty, that you act immediately.
Levelling Up White Paper
In the summer of 2022, the government announced some radical proposals with the fairer private rental sector white paper, introducing ‘the decent home standard’ and the appetite for securing longer-term tenancies for tenants.
Changes include abolishment of the Section 21 notice and introduction of Periodic tenancies from the outset, we are however confident that changes have also been considered for landlords, with the introduction of new grounds under the Section 8 notice for breach of tenancy, such as non-payment of rent and anti-social behaviour. There will also be provisions to regain possession of your rental property should you need to sell or move back into your property.
Whilst we are advised that the bill will be passed in 2023, we have yet no confirmed date at this time, we expect further details to be released in Spring 2023.