Here at Just Landlords, we update our website on a constant basis with news stories discussing the changes happening in the private rental sector.
The rental and property markets are currently under scrutiny from a number of professional bodies, MPs, charities and financial groups, and what happens in the next six months could change millions of people’s lives.
This is why all landlords need to start protecting their property portfolios now and make sure they know what to expect in the future.
Avoid rent hikes
A few years ago, the private rental sector started booming, as more people started to struggle to save money for a deposit on a property.
At first, renting seemed like a cheaper option. However, as so many people now have to rent instead of buy, the demand has increased so much that it has outstripped the amount of private rental homes available.
Naturally, this has led to rent prices increasing, however, this has also led to many people now being priced out of the market when it comes to good quality accommodation.
Furthermore, landlords are having to rely more heavily on their rent guarantee insurance as the percentage of tenants falling into rent arrears is rising considerably.
In reaction to this, opposition leader Ed Miliband has announced his plans to put a cap on the amount of rent private landlords can ask for their properties.
The London Assembly also supported this plan. However, at the same time, critics have claimed that it will lead to the market crashing.
In order to protect your business in the future, it is advisable to make sure that you don’t increase rent prices above market prices, and if you can afford to be slightly lower this would be best. That way you will know your rents won’t have to take a cut in the future and you won’t be accused of pricing your properties unfairly.
As there is so much demand for private rental properties, a large number of people have decided to enter the private rental sector in order to create some extra money.
At the moment, letting a property is seen as one of the most secure ways to create an income, which is why many people are choosing to let properties in order to create a nest egg for the future.
However, at the same time, many of these people are not experienced when it comes to being a landlord and so can fall short when it comes to fulfilling their responsibilities.
The housing charity Shelter has recently been trying to raise awareness of this issue, especially as many tenants are currently living in unsuitable properties. It believes that introducing mandatory registration for all landlords will help to combat the problem of rogue landlords, as it will mean that no one will be allowed to let a property unless it adheres to certain standards.
It looks extremely likely that this proposal will be passed in the near future, which is why it is important to keep all your properties to high standards before it is too late.
Furthermore, you could voluntarily join a landlord registration scheme now so that you are already certified if mandatory regulation is introduced in the future.
Be cautious with investments
Even though the private rental sector is currently booming, that doesn’t mean it will stay that way forever, especially if plans such as mandatory registration and rent caps are introduced.
Additionally, the Government has introduced a number of schemes recently, such as Help to Buy, which have increased the amount of people who can now afford to buy a property instead of rent.
Don’t forget that while renting is currently the only option for many people, if they had a choice, a large proportion would probably choose to buy, and so you need to keep this in mind if the ability to buy becomes easier in the future.
At the same time, more private rental housing is currently needed in the UK, so it’s a good time to invest in new buy-to-let properties. The key here is to make sure that you invest wisely – think about whether the property would be desirable if there was a large amount of choice, and never overestimate a property’s value.
What is considered an acceptable property today will probably be substandard in the next few years, so make sure you keep this in mind when considering new investments.