The vast majority of the 2 million landlords in the U.K. – 97% – are determined to be “small” landlords. These are landlords with 3 or less rental properties, who typically work in full time employment and have many commitments in their everyday lives which keeps them very busy.
Their properties are often mentally put on the back burner, as they are a pension hedge, or a legacy for children.
This profile of landlord does not have the time or the interest to become an expert on the private rented sector. They typically want security and to be able to “let and forget”.
Our M.D. Eric Walker, shares some insights into the challenges facing the sector which could cause uncertainty:
In view of this, we have put together a few ways for small landlords to create certainty in an uncertain world:
1. Consider a fixed rate mortgage
If you have concerns over interest rates rising, it makes sense to opt for a fixed rate mortgage. Most landlords are looking at 5 year fixed rates, due to the costs involved in taking out a new mortgage. There are many competitive deals out there at the moment, so it pays to shop around and use a “whole of market” broker, rather than just looking at products offered by your bank or current lender.
The benefit of fixing is knowing how much your mortgage payment is going to be for the next 5 years, enabling you to budget accordingly.
This option works well for landlords who want to budget a long way ahead, and know their financial commitments for planning purposes.
2. Build a team of professionals around you
Knowing that you are receiving bespoke advice to your personal situation is another way to achieve peace of mind.
Typically, you should look to build a team of the following professionals:
1. Mortgage broker
2. Specialist property tax advisor
3. Lettings agent
These professionals will be keeping up with legislation, news, and trends, even if you are unable to, and be able to advise you accordingly.
With upcoming changes to tax relief, it is vital that landlords look at their own position and do some homework to see what it means for you. You may need to de-leverage, sell some of your lesser performing properties, or you may need to consider raising rents. Your team of professionals will help you understand which levers you can pull to ensure your properties are set up correctly for the market conditions and tax landscape ahead.
We were recently delighted to win a major lettings award, which should give you confidence in working with us:
3. Consider our Guaranteed Rent Service
Forgive us for sneaking this one in, but it is guaranteed, and we have been giving our landlords peace of mind for 20 years now.
Our Guaranteed Rent service does what it says on the tin – your rent is guaranteed whether the tenant pays or not, or the property is empty.
Just this month it was announced that the number of households living in the private rented sector in England evicted by bailiffs has gone up 88% in the past five years.
According to another report released by Shelter this month, an estimated 3 million working families in England are one pay cheque away from not being able to pay their rent or mortgage. Shelter and market research firm YouGov reached this conclusion after interviewing 8,381 adults in the UK and found 37% said they would be able to cover their housing costs for more than a month if they or their partner lost their job. They calculated the 3m figure using information from the 2011 Census published by the Office for National Statistics, which showed there were 8.4m working families in England.
The Shelter/ YouGov report also found 23% of working families said they would be unable to pay their housing costs at all if they or their partner lost their job.
These statistics make a compelling case for our Guaranteed Rent service for landlords who simply want to “let and forget”. It most definitely gives certainty in uncertain times, and some of our landlords have been on this service for as long as 14 years!
As Eric mentioned in his video, all our offices around the U.K. are committed to advising landlords throughout their property journey, bringing expert knowledge, contacts, and property management.
To find your local Northwood office, please click >>> here.
Northwood is one of the largest and most recognised estate agents in the U.K. and the leading supplier of Guaranteed Rent to give landlords complete peace of mind.
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