Further Pressure on Rental Market Means the Time May Be Right to Sell
Demand for rental properties in the UK fell 19% month on month to a two year low at the end of 2016, the latest figures show.
The data from the Association of Residential Letting Agents reveals that in December 2016 there were 26 prospective tenants registered per member branch, the lowest level since records began in January 2015.
This downward pressure on the residential letting market is not unexpected after a raft of changes which affect landlords’ profitability.
Following last year’s increases in taxes for landlords, including stamp duty and capital gains, many in the industry believe supply will decrease this year.
This is because fewer investors regard the buy-to-let market with as much optimism as in the past.
And while it could be argued that those landlords who stay put will benefit from higher rental income, due to scarcity, there is ample evidence to suggest that many tenants are already financially stretched to the limit and cannot cope with any rent increase.
There are many reasons why rents may be forced higher in the coming year.
The introduction by the Government of a ban on letting agents fees is just one example.
Industry experts claim tenants will need to pay extra rent to cover the work done by agents.
All of this makes grim reading if you are a private landlord with a small portfolio, many of whom are actively considering cashing in their chips and finding a less stressful investment vehicle.
If you’re one of these residential landlords who is thinking now is the right time to get out of the property business then we would like to hear from you.
R&T Properties is a division within a long established, family owned, private property company who have been successfully doing business in Glasgow for over 60 years.
We buy and sell residential and commercial property right across Scotland, from Edinburgh in the east to Greenock in the west and from Dumfries in the south to Aberdeen and Inverness in the north.
And all points in between.
We are well known for agreeing on a quick sale. We are happy to pay cash and if you use one of the firms of solicitors on our panel we may also be able to pay your legal costs.
And don’t worry if your property, whether it consists of a single flat or a portfolio which includes several homes, is structurally defective, un-mortgageable or of non-traditional construction. We are experts in these types of properties.
Of course, we welcome approaches from owners who do not face these extra challenges.
And speaking of challenges, up till now buy-to-let investors have enjoyed rock bottom interest rates on their loans. But is this about to change?
Inflation recently jumped up to 1.6%, due mainly to the uncertainties after the Brexit votes which weakened the value of the pound. Imports have become more expensive and so the cost of living has risen.
Some experts predict the rate will be 2% by spring and 3% by next Christmas.
One of the most common methods of combating rising inflation is to put up interest rates. One reason why this remedy is chosen is that higher interest rates will attract cash-rich foreign organisations who will save their money in UK bank accounts.
To do so they must buy pounds with their own currency and this makes our currency stronger. A stronger pound means cheaper imports, thus lower inflation.
The Bank of England have been extremely reluctant to raise interest rates recently in case doing so halts the expansion of the economy.
However, at some stage higher interest rates become a necessity and it looks like we might get to that position in 2017.
This development, on top of the other financial pressures on landlords could tip the balance for many and force them to sell up and move on.
If you are in that situation, don’t worry if your property is the subject of a regulated tenancy.
As specialists in the acquisition of regulated tenancies, we act as direct purchasers of properties with sitting tenants in the Glasgow area. We aim to provide you with a hassle-free transaction and minimal disruption to your tenants.
We will always pay a fair and competitive market price. Properties with regulated tenants are typically sold at a discount to vacant possession value.
We aim to fully complete the transaction between 7-14 days, but we can structure a transaction to suit your requirements.
We will do our utmost to minimise any impact on your tenants through exercising our code of practice which guarantees:
We will not disturb tenants.
- We do not require internal access.
- We do not require to conduct internal surveys.
- We will always act ethically and be reasonable to existing tenants assuring them minimal disruption.
- We exercise strict client confidentiality for vendors.
So don’t delay, contact us today and a member of staff will provide you with impartial advice regardless of your situation.